With global markets still tumbling, the Godfather of newsletter writers, 91-year-old Richard Russell, warned that the retail public is about to become frightened and panic will take hold.
September 24 (King World News) – Richard Russell: “The initial shock hasn’t dawned on the public yet, but it will. The reality is that the U.S. is sinking back into recession. I think we have reached the inflection point, and the bad news is coming out. This will obviously terrify the Fed, which has been trying with all its might to push up core inflation to the much desired 2%. Soon I think the newspapers will start breaking the disturbing news: the fact that the US has sunk back into recession after six years of pumping by the Fed. So what’s next?
The Feds raising rates is out of the question. What’s more likely is the return of QE, because the Fed is terrified of the current position in which deflation is taking over from the much desired inflation. It would not surprise me to see QE4 established as the Fed addresses the deflationary trend.
In bear markets the items tend to go from a big number to the next big number on the downside. The key here may be the Industrial Average, which is holding just above 16,000. It would not surprise me to see it move into the 15,000s tomorrow, and move down to test 15,000 even. We also have 4 distribution days on the S&P and the Nasdaq.
The Retail Public Will Be Frightened And Panic Will Take Hold
We have reached the point where I think the newspapers will have to carry news of the recession. This will frighten the retail public, to see the word “recession.” I think we’re moving into the area where panic will take hold. Bear markets ultimately end in panic, and the economy and the stock market tend to feed on themselves.
The markets have already sized up the situation. As I write the Dow is down almost 200 points and gold is up 22 dollars to 1154, while silver is pushing $16 an ounce. Gold in dollars is above its 50-day moving average and heading towards it 200-day moving average, which stands at 1180.
My subscribers are in good shape holding bullion silver and gold and being out of common stocks. What do we do next? We do nothing and await developments. Stay with your silver and gold and watch the market only as a source of amusement.
I just heard that Lloyd Blankfein, head of Goldman Sachs, has cancer. I also know that Jamie Dimon, president of JP Morgan, has cancer. And Warren Buffett has prostate cancer. Why is everyone getting cancer? Louis Hay says that cancer is a disease of resentment. It also may be due to people living longer than before. Another theory is that we’re eating processed food, insecticides, GMOs, dyes, and poisonous chemicals. Whatever it is, cancer is more prevalent in the U.S. than other nations. Here is a fantastic TedTalk my daughter suggests to watch, very informative.
Whatever the cause, cancer is striking many people. My heart goes out to those people who have developed cancer. Personally, I suspect cancer is an autoimmune disease. My own theory is that everything starts with the brain. My love to all my subscribers.” 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.
***ALSO JUST RELEASED: Is The Greatest Wealth Transfer In History Starting As Gold And Silver Shorts Run For Cover? CLICK HERE.
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