In the end my survival vehicle will be gold

The gold price fell back under $1,700 per ounce Wednesday till Thursday morning. At $1,691, the price of gold has fallen over $100 from its November 7 closing price of $1,795. Weakness in global stock and commodity markets has weighed on gold as a wave of deleveraging has hit asset prices across the board. S&P 500 stock futures fell 10.30 to 1172.50 this morning while cyclically-sensitive copper and platinum prices dipped 2.7% and 1.1% to $3.25 per pound and $1,554 per ounce, respectively.

Russell went on to say that “My advice. We are moving closer and closer to what I call ‘survival period’ — the period where the magic of compounding turns into what will be the poison of compounding. This isn’t a time for timing. This is a time for action. Reduce your exposure to bonds and all items that provide fixed interest rates. Similarly, reduce your exposure to stocks except the gold miners. Look to expand your positions in inflation-protected assets, especially gold.”

“Those who are holding stocks in the hopes of the usual rebound are going to be terribly disappointed in the years ahead. This bear market is going to be unlike anything we’ve ever seen before. In the end my survival vehicle will be gold. I say again, timing is hopeless. Gold will have purchasing power and true wealth as almost everything else is destroyed by this unprecedented bear market.”

Lastly, Russell once again spared few punches in criticizing America’s policymakers. ”The US Government is now so loaded with ever-growing debt that it has become a mathematical freak. We return to different times, when rising interest rates will eat up the US government. With $55 trillion in assorted debts, the US is in no shape to deal with rising interest rates. We are in a state of reverse compounding, leading to inevitable bankruptcy on a massive scale.”

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