Richard Russell – This Terrifying Financial Collapse & Gold
June 25, 2012
With global markets trading in a sea of red, the Godfather of newsletter writers, Richard Russell, issued an extraordinary warning. Russell stated, “… it is dawning on Bernanke that the Fed cannot defeat the powers of deflation and the primary bear trend … and Bernanke knows it, but cannot talk about it – it’s too frightening.” Russell also discussed gold at length, but first, this was Russell’s disturbing conclusion regarding Bernanke and the Fed: “The Russell view — The Fed and all central banks are fighting the implacable forces of global deflation. This is really the primary bear trend that I’ve been writing about. It’s the result of a fundamental change in the world markets. Suddenly, within the space of a few years, Asia has entered the global economy.”
Richard Russell continues:
“The world is now producing far more goods (and more competitively) than ever before. I think deep in his heart, Bernanke knows and understands this. As a result, he does not want to use all the possible anti-deflation ammunition that the Fed can muster. The reason — it is dawning on Bernanke that the Fed cannot defeat the powers of deflation and the primary bear trend.
The result is that the sinking economy is actually producing signals ahead of the Fed, and Bernanke knows it, but cannot talk about it – it’s too frightening. Now Bernanke is playing for time. He’s hoping that somehow, some way, the US economy will not get worse and that it might even improve slightly. Bernanke is worrying about the Fed’s bulging balance sheet. It’s so huge, how will he ever contract it?
In the meantime, the stock market is more puzzled than ever. With uncertainty looming large, the market backs off. It is giving up on QE3. In the absence of QE3 the market does what it always does to protect itself, it backs off.
Sadly, the whole world is searching for income and safety, and the fact is that there is no income and there is no ultimate safety. Then how does one build wealth? The Asians know the answer to that — YOU BUY and HOLD GOLD — and exercise a lot of patience.