Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Veteran gold investment expert Richard Russell says that as a result of Bernanke’s knocking down of the US dollar “insane” bubbles are building up everywhere in the American economy.
According to King World News Russell says that the reassuring inflation measure touted by the Federal Reserve is defective, and that bubbles are building up in numerous areas including Wall Street, fine art, and choice collectibles.
Russell believes that the Federal Reserve under Bernanke is squarely to blame for a huge and looming bear market:
In short, we live in a multi-bubble world, a world that the Bernanke Fed has created. All this, as I see it, lays the slippery foundation for an absolutely massive primary bear market. It will be a bear market that I hope to help my subscribers survive through.
As per usual Russell advises prudent readers to extend their holdings of gold, which is impervious to bankruptcy and the manifold vulnerabilities of other investment options:
Gold has one great advantage — you never have to worry about gold going bankrupt. Thus, you can hold actual gold with impunity. The best way to handle actual gold in a bull market is to accumulate –never sell, but just continue to accumulate.
Russell also notes that gold rose into the 1700’s in yesterday’s trading, with slow stochastics also in the process of turning up.
Graph courtesy of StockCharts.com
2 Comments
Mark Harder
The bubbles that led to the ’08 near-disaster were created long before Bernanke and his quantitative-easing. It must have been a decade ago when I read news of public economists warning about the 10’s of trillions at risk in bubbles made of financial paper, such as re-packaged mortgages. Watch “The Flaw” for a more detailed analysis of this phenomenon, including the role of increasing income inequality in creating the financial/mortgage bubble and its collapse. QE may be keeping the bubble inflated, but it’s far from the only consideration.
Jackson
It is the absolute essence of the matter that we are living in an economy built upon bubbles. Every time the government injects easy money into a peculiar market such as home mortgages, education, healthcare, it necessarily creates an artificial boom in that arena – a bubble. Remember that the government does not have to inject money directly. All it has to do is provide for easy credit via regulation. In fractional reserve banking, credit is money. Confronted with the massive monetary deflation brought about by the toxic real estate assets, Bernanke has engaged in a grand experiment attempting to create an offsetting bubble in the stock market. It is simply an act of faith as to whether this will work.