Richard Russell Warns We Will See Violent Action Ahead

Tuesday, November 4, 2014
By Paul Martin
November 4, 2014

Today the Godfather of newsletter writers, 90-year old Richard Russell, warned that we will see violent action ahead. The 60-year market veteran also covered the Great Recession, the Bank of Japan, the U.S. dollar, gold, silver, stocks, and a plethora of other topics as only Russell can at the age of 90.

The Russell opinion is that the world is still embedded in the Great Recession. Thus, I am arguing with the stock market. This is risky and perhaps stupid, but it is what I think, and what I think is what I write. Obviously the stock market has taken its lead from the bullish stance held by the Fed. If I am correct in my opinion, in disagreeing with the Fed’s optimism, we will see some violent action ahead.

One central bank giveth and another central bank taketh away. The Bank of Japan, smarting from years of deflation, decided to unveil some “shock and awe.” The Bank of Japan stunned the markets by saying that it would boost asset purchases. Barron’s brilliant editor, Randall Forsythe, put it this way:

This is truly a dazzling example of 21st century government finance. The government runs a deficit covered by IOUs, or bond borrowings. The Central Bank buys those bonds to fund the budget shortfall and also

purchases bonds sold by the pension plan, all reserves it creates out of thin air. The pension fund

uses the newly printed yen it receives from the BOJ for its bonds to buy claims against the future

earnings of private industry — that is, common stocks.

The Rest…HERE

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