Home » Gold, US Debt

Richard Russell On Gold

16 December 2009 35 views No CommentEmail This Post Email This Post
Buying and accumulating gold must be seen as a LONG-TERM proposition. I can tell you that gold is going much higher, but I can’t tell you when. I can tell you what to buy — gold bullion coins — but I can’t tell you when it’s going to go into its bubble phase. By the same token, I can tell you that the dollar will go into its “water fall phase,” but I can’t tell you when.
Don’t buy gold to “make a killing.” Buy gold as a permanent store of wealth, and one that can’t go bankrupt. Rich people understand that.
Bull markets eventually come to a boil, but the time of the boiling is never obvious. Apply that thinking to the gold bull market.
China is now the leading gold miner and producer in the world. China is actively encouraging its people to buy and accumulate gold. And I wonder how long it will be before the US government imitates China. Yes, I foresee the time when the US government (as stupid as it’s been, so far) will do a reverse and encourage the American people to buy and accumulate gold.
China, Russia and most of the Asian central banks still have only a small percentage of their reserves in gold. All of these nations want to increase the gold percentage of their reserves. There was an announcement over the weekend that the Russian central bank was adding to its gold reserves.
US mutual funds are now adding small quantities (percentages) of gold to their portfolios. In most cases, the funds are buying gold for insurance. They will hold small quantities of gold over the long term.
Leading spokesmen and oft-quoted men like Warren Buffett and Bill Gross will never mention investing in gold. This is because buying gold is seen as unpatriotic. After all, buying gold implies that you are abandoning the US dollar or at least hedging against dollars and all fiat currency.
The Fed and the Treasury must have some secret strategy for paying off America’s fantastic liabilities (debt) but nobody knows what it is. Many scenarios are now being bandied about and some advisories claim to know “Bernanke’s secret plan.” The unfunded liabilities are now so huge (far above $50 trillion) that rumors of an eventual reneging on our debts are being seriously talked about. After all, the US reneged on settling its debts in gold, much to France’s anger (France was calling in our gold as fast as it could), when President Nixon shut the gold window. The US will no longer part with any of its (our) gold.

Richard Russell, a highly regarded investment newsletter writer has the following to say about the recent gold action:

Buying and accumulating gold must be seen as a LONG-TERM proposition. I can tell you that gold is going much higher, but I can’t tell you when. I can tell you what to buy – gold bullion coins – but I can’t tell you when it’s going to go into its bubble phase. By the same token, I can tell you that the dollar will go into its “water fall phase,” but I can’t tell you when.

Don’t buy gold to “make a killing.” Buy gold as a permanent store of wealth, and one that can’t go bankrupt. Rich people understand that.

Bull markets eventually come to a boil, but the time of the boiling is never obvious. Apply that thinking to the gold bull market.

China is now the leading gold miner and producer in the world. China is actively encouraging its people to buy and accumulate gold. And I wonder how long it will be before the US government imitates China. Yes, I foresee the time when the US government (as stupid as it’s been, so far) will do a reverse and encourage the American people to buy and accumulate gold.

China, Russia and most of the Asian central banks still have only a small percentage of their reserves in gold. All of these nations want to increase the gold percentage of their reserves. There was an announcement over the weekend that the Russian central bank was adding to its gold reserves.

US mutual funds are now adding small quantities (percentages) of gold to their portfolios. In most cases, the funds are buying gold for insurance. They will hold small quantities of gold over the long term.

Leading spokesmen and oft-quoted men like Warren Buffett and Bill Gross will never mention investing in gold. This is because buying gold is seen as unpatriotic. After all, buying gold implies that you are abandoning the US dollar or at least hedging against dollars and all fiat currency.

The Fed and the Treasury must have some secret strategy for paying off America’s fantastic liabilities (debt) but nobody knows what it is. Many scenarios are now being bandied about and some advisories claim to know “Bernanke’s secret plan.” The unfunded liabilities are now so huge (around $100 trillion) that rumors of an eventual reneging on our debts are being seriously talked about. After all, the US reneged on settling its debts in gold, much to France’s anger (France was calling in our gold as fast as it could), when President Nixon shut the gold window. The US will no longer part with any of its (our) gold.

Related Posts
  • money-to-burnHyperInflation In The US: Possibility Or Reality? Here's an exceptionally well made video by the National Inflation Association. If you don't believe in hyperinflation (or even if you do) this eye-opening video will entertain and educate you regarding the historical currency devaluation that several other countries have faced and the total break down of economies like Zimbabwe.......
  • 10gm-silver-bar-credit-suisseRichard Russell on Silver In the last post, I mentioned Richard Russell's views on gold.  Recently, he declared that he was extremely bullish on silver as well: January 6, 2010. They call it "the poor man's gold." But don't turn your nose up at silver. The dollar was originally defined in terms of silver.......
  • great britain gold sovereign (0.234 ounces)Gold Selling At 40% Markup In Greece According to Coin Update News: The fear running through the Greek populace is that the nation’s government may default on some of its debts. Since 1965, the Greek government has imposed restrictions on trading British Sovereign gold coins (gold content .2354 oz). Despite those restrictions, the Bank of Greece reports......
  • Richard Russell On Gold's New Record Unless you're living under a rock, you've heard about the price of gold hitting a new record almost $1,200 per ounce.  A lot of people think gold is overvalued and is currently in a bubble. If anything, with the US government bailout taking on new debt at a record pace,......
  • China Lends Venezuela $20 Billion In exchange for a promise of 400,000 barrels of oil a day by 2015, China has agreed to lend Venezuela $20 Billion that it sorely needs. This will help offset China's dependence on Saudi Arabia for its oil needs. Venezuela produces extra-heavy oil that is high in sulphur and has......
Related Websites
  • brokenpigGetting Out of Debt 102 Debt Elimination Step #2 - Next, you have to be able to establish an emergency fund. The step of establishing an emergency fund is going to take as many as several months longer, but it is well worth it when you see how far your savings have come in the......
  • George Soros to Profit From Run on Dollar?George Soros Soon to Profit from Run on Dollar? WASHINGTON: George Soros is positioning himself to set a new record in profits, thanks to the Obama administration. Due to the profligate spending of congress the US is well on its way to defaulting on its current obligations, possibly within the next 12 months. How is that possible, you say?......
  • Anxiety About What Associates Think. Unlike traditional trades, as attorneys, doctors or financiers, traders are often characterized simply as the fans, trying to earn some extra dollars from the market. The majority of people think that any person is capable at it if he has time, money and a strong stomach. Habitually to hear, how......
  • cameracollectionFinding Collectibles Online Everybody has some kind of special item that has been in the family for as long as anyone can remember. It might be a vase, an antique jar or some other special collectible. As far as we can tell, its been handed down from one generation to the next, and......
  • Is Gold a Solid Investment Vehicle For Your Savings? If you happen to turn on CNBC, listen to a radio show about investing, or read any financial newsletter or magazine, it’s not going to be long before you see and advertisement about some company which will show you how you can invest in gold and other precious metals to......
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading ... Loading ...

Leave your response!

Add your comment below, or trackback from your own site. You can also subscribe to these comments via RSS.

Be nice. Keep it clean. Stay on topic. No spam.

You can use these tags:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

This is a Gravatar-enabled weblog. To get your own globally-recognized-avatar, please register at Gravatar.