Today the Godfather of newsletter writers, 91-year-old legend Richard Russell, warned that the primary trend of the world has now turned negative.
1958 – 1980 – When Markets Were Still Free
September 4 (King World News) – One Last Job At The Age Of 91
Richard Russell: “I started writing Dow Theory Letters in Dec ’58, and since then I’ve never taken a vacation. DTL has always been me and my studies of the market. For many years ’58-’80 I was obsessed with the action of the market in that the stock market discounted future events when properly read.
1980 Onward – Fed Nightmare & The Avalanche Of Liquidity
Starting with the ‘80’s, the Federal Reserve literally took over the economy. The markets were no longer supply and demand, they were more about the demands of the Fed. The Fed’s mandate was to produce smooth and non-erratic markets and a favorable economy with jobs for all.
A bull market ended around January 1980, and since then we’ve had a flat and extended period of distribution, which I believe carved out an historic market top. This is the end of a long period of inflation, and the beginning of the correction that inevitably follows.
Since the undertone of America is inflation and leveraging, we are now in the period of deleveraging and deflation. This means recession, an economic situation that the Fed will not tolerate. The Fed has been attacking deflation with QE. Let’s hope that this avalanche of liquidity will somehow reach the middle class and inflame the economy again.
The Primary Trend Of The World Has Now Turned Negative
One thing I learned from Dow Theory is that once the primary trend starts its course, nothing will stop it. The primary trend of China and the world economy has turned negative, much to my disappointment. I believe the primary trend of the stock market and the economy has also turned down.
Where do I fit in with all of this? I’m attempting to have my subscribers survive the coming bear market which, if I’m not mistaken, will be a tremendous job on its own. My job will be to keep my subscribers centered and ready for anything.
One Last Job At The Age Of 91
I see my job as a sort of leader, leading my subscribers and perhaps a few others to a better and safer life in the coming years. God has already blessed America but I’ll be redundant and say God Bless America and my loyal subscribers.
I expect America to come up with some astounding inventions and discoveries and that will once again make America the hope of the world. In conclusion, I expect the next five years to be nothing short of astounding. Most importantly a new sense of spirituality has enveloped the globe.” I would urge all KWN readers around the world to subscribe to Richard Russell’s 91 years of wisdom and remarkable writings at Dow Theory Letters by CLICKING HERE TO SUBSCRIBE.
***ALSO JUST RELEASED: Marc Faber On The 1987 Stock Market Crash vs Today And Why Stocks Will See More Downside CLICK HERE.
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