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 the greatest and most destructive of all bear markets is coming, and he also discussed gold, the great unwind and a lesson from Genesis.
The Great Ron Paul Always Tells It Like It Is
Richard Russell: "Twelve-term congressman Ron Paul tells this story: "I once rode alongside President Reagan on his helicopter, and the subject of what was happening to our money came up. 'Ron,' the president told me, 'No great nation that abandoned the gold standard has remained a great nation.'"
Ron Paul also talked about a conversation with Alan Greenspan. "He told me he still stands by his original thesis, which was published decades ago. He wrote, 'In the absence of the gold standard, there is no way to protect savings, and confiscation through inflation. There is no safe store of value.'"
Today, with the US having left the gold standard, the Federal Reserve is attempting to print us back to prosperity. As trillions of new fiat dollars are created, the purchasing power of the dollar is being destroyed.
Important Lesson From The Book Of Genesis
For thousands and thousands of years, governments have sought to bring back prosperity by creating more money. This idea was even written about in the Bible. From Genesis 47:15, “So when the money failed in the land of Egypt and the land of Canaan, all the Egyptians came to Joseph and said, ‘Give us bread, for why should we die in your presence? For the money has failed.’”
After six years of creating an ocean of fiat money, it’s incredible, but now we learn that the US economy is again near recession. The Fed is intent on raising rates, but raising rates in a weak economy would almost guarantee trouble.
Thus the fed has backed itself into a corner. They misjudged the healthy instincts of the American people: the retail public has turned to saving and getting rid of debt. Meanwhile, stock valuations are part of the reality. What I’m afraid of, or what I foresee, is a huge crash followed by a relentless bear market.
The Fed, with its money machinations, has interfered or interrupted nature’s law. When a bull market runs to overvaluation, history tells us a primary bear market lurks just around the corner.
As I see it, the stock market is skating on thin ice. A rise in interest rates, set off by the Fed, could break the ice and send the stock market on its long-delayed bear market.
The Correction Of These Historic Excesses Could Take 40 Years
The bear market will arrive to correct the inflation and leveraging that has occurred since the end of WWII. This correcting process could easily endure for 40 years or longer. During that time, many people will become desperate and discouraged.
The greatest enemy of mankind is fear. To be forewarned is a great aid in fighting fear. This is the reason that I’m talking about the coming bear market. Identifying the beginning of the bear market is not the problem. The real problem is what to do when the bear market arrives. My future sites will address this problem.
The Mother Of All Bear Markets Is Coming
My first suggestion is to keep the concept of a bear market in mind. The only thing worse than fear is sudden and unexpected fear. “Hope for the best and be prepared for the worst,” is an ancient adage and one worth keeping in mind. My secret expected scenario for the market is for the averages to rise for a bit, turning everybody optimistic, followed by the mother of all bear markets.
Last week I was saddened to read in the New York Times that my high school buddy James Salter had died. Jimmy and I had both fought in the Army Air Force. By the grace of God, we both survived. James Salter was a superb writer. His obituary occupied a full half-page in the New York Times. Jimmy’s death left me with a strange feeling – why have I outlived all my best friends and buddies?
I have many subscribers who have been with me since 1958, and they have seen me change from atheist to agnostic to a believer. I believe in the gold standard and the American dream, and I will promote them for as long as I live." I would urge all KWN readers around the world to subscribe to Richard Russell's 90 years of wisdom and remarkable writings at Dow Theory Letters by CLICKING HERE TO SUBSCRIBE.
***KWN has now released the outstanding KWN audio interview with Rick Rule, where he discusses the gold and silver markets, commodity markets as well as the big picture for the world going forward, and much more, and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
***KWN has also now released the powerful KWN audio interview with Nomi Prins, where she discusses the gold market, the coming financial destruction that is in front of us, what investors can do to protect themselves and much more, and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
***ALSO JUST RELEASED: Greek Default To Create Devastating Financial Shocks In Europe And Across The World CLICK HERE.
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The audio interviews with Rick Rule, Nomi Prins, Gerald Celente, Bill Fleckenstein, Stephen Leeb, Andrew Maguire, Michael Pento, Dr. Paul Craig Roberts, Eric Sprott, Robert Arnott, David Stockman, Chris Powell, John Mauldin, Egon von Greyerz, Dr. Philippa Malmgren, Marc Faber, Felix Zulauf, John Embry and Rick Santelli are available now and you can listen to them by CLICKING HERE.