As people continue to digest breaking news out of Greece and around the world, the Godfather of newsletter writers, 90-year-old Richard Russell, warned that central banks are worried as investors around the world are frantically bidding up all tangible items.
Richard Russell: "Economically, the big picture is that the world has turned to correcting the inflation and leveraging that has taken place since the end of WWII. The politicians in power will not tolerate economic contraction; thus the pressure on the Fed to hold the corrective decline.
We Should Have Cleaned Out The Corruption – Instead We Have Fed Anguish
Personally, I would have preferred that the bear market that began in 2008 had continued to conclusion. This would have cleaned out the corruption and given us a clean slate. The following bull market might have given the world another 20 or 30 years of good times and improving business. But central banks, under pressure from the politicians, decided that they could halt the decline.
The Fed reasoned that the public would accumulate some of the new wealth and spend it as a way of continuing the good times. But to the Fed's anguish, the public has chosen to save and cut down on its debt. Thus the Fed has been frustrated in its attempt to keep the good times rolling.
Will The U.S. Try To End This With War Against China?
The Great Depression was ended by WWII. One situation which I worry about is a possibility that the government will seek to end the current disaster with a war against China. The Chinese are well aware of this possibility. I think they are eager to solve any US/China argument peacefully.
There is much talk of China wanting to eclipse the dollar as the world’s new reserve currency. My own thought is that China does not want to eclipse the US, but China wants an equal status and to be respected as a new world leader.
My hope is that civilization has passed the era of great nations “warring” against each other. My thought and my hope is that we will see no more such destruction.
Auction Prices Are Off The Charts Because Of Frantic Chinese Bidding
I’ve been reading reports from the Sotheby’s and Christie’s auction. Prices are off the charts and I mean off the top of the charts. Record prices are now commonplace. Obviously, investors all over the world are bidding for tangible items – anything from diamonds to classic cars to apartments in New York City.
Much of the sky-high prices are a result of frantic Chinese bidding. The Chinese know well the value of tangible wealth and for the first time, diamonds are welcomed in engagements and as visible statements of the owner’s wealth. India too has joined the craze to own tangible wealth. Over the centuries, India has been a huge buyer of gold as a statement of individual wealth. But more recently, China has led the world in accumulation of gold. China is now the world’s leading miner of gold and probably the planet’s leading accumulator of gold.
People Need To Own Physical Gold And Silver
In their frantic effort to hold back deflation, the central banks of the world are doing everything possible to stir inflation. Only two currencies resist devaluation. They resist it because they can’t be manufactured by printers. The two currencies I’m talking about are silver and gold.
Late Notes – As if beginning to discount some ugly future event, the stock market stepped back from its recent record highs. As I write at the close, the Dow is down 107 and under 18,000 again. Transports are down 40 and the Nasdaq is down 21. To wind it up, Utilities are down a point, which makes it a negative day.
Interestingly, margin account on the NYSE are at a record 507 billion. There are four distribution days on the Nasdaq and the S&P. For want of a better method, I’m placing emphasis on large numbers such as 18,000 on the Dow and 8,000 on the Transports. Hopefully, my subscribers are sitting with only physical silver and gold and are watching what may be a period to remember." ***KWN has now released the extraordinary audio interview with Gerald Celente, where he discusses the coming collapse, why gold is going to skyrocket as well as what the world will look like in the aftermath of the coming disaster what surprises, and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
***KWN has also now released the extraordinary audio interview with Bill Fleckenstein. This is one of his greatest interviews ever as he discusses why the stock market is going to collapse and why the coming financial unwind will be so brutal, the gold and silver takedown, what surprises to expect next and much more and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
***ALSO RELEASED: Full-Blown Panic Coming As This Historic Market Bubble Implodes CLICK HERE.
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The audio interviews with Gerald Celente, Bill Fleckenstein, Stephen Leeb, Andrew Maguire, Michael Pento, Dr. Paul Craig Roberts, Eric Sprott, Robert Arnott, David Stockman, Chris Powell, Rick Rule, John Mauldin, Egon von Greyerz, James Turk, Dr. Philippa Malmgren, Marc Faber, Felix Zulauf, John Embry and Rick Santelli are available now and you can listen to them by CLICKING HERE.