Richard Russell – Hyperinflation, Default, Bitcoin, Gold & China
December 16, 2013
With continued chaos around the world and uncertainty in global markets, today KWN is publishing an incredibly powerful piece that was written by a 60-year market veteran. The Godfather of newsletter writers, Richard Russell, discusses hyperinflation, default, Bitcoin, gold and China. Below is Russell’s tremendous piece.
Richard Russell: “Today the US debt is $16.7 trillion. The entire Gross Domestic Product of the US is $15.68 trillion. This means that the debt to GDP ratio is over 105%. History shows that a debt to GDP ratio of over 100% is dangerous. With the debt now growing exponentially, we face a situation of inflation, hyperinflation or bankruptcy.
On another subject, we hear that the hedge fund industry has not kept up with the markets. Hedge fund managers tend to be knowledgeable and professional. If professionals can’t keep up with the stock market, what are the odds that amateurs can? The current stock market has been erratic, volatile and very difficult to make money in.
As I see it, we are in the latter phase of perhaps the greatest debt bubble in history. A bubble can inflate just so far, and then it pops. When the current debt bubble bursts, it will prove to be an unmitigated disaster.
There are now 7 distribution days on the S&P and 7 on the NASDAQ (as of Friday). A collection of distribution days are enough to put the brakes on the market. I believe that the current excessive number of distribution days are acting as a brake on the stock market. The institutions are bailing while the retail public continues to pile in.