Richard Russell - Attempts To Defeat Deflation As Money Dies

"With gold and silver surging, the Godfather of newsletter writers, Richard Russell, warns about attempts to defeat deflation as money dies. Here are Russell’s thoughts, along with some charts, in a note to subscribers: “Help, I'm alone. Where are my fellow newsletter writers: Stan Weinstein, Garfield Drew, Sir Harry Schultz, Marty Zweig, Chuck Almon, Bob Farrell? They all flew the coop while poor old Richard Russell is still carrying on. Maybe it's because the stock market has become impossible or irrational. I think at any given time, the stock market seems increasingly difficult to figure out.”

 

Richard Russell continues:

“I think what's needed is a lot of patience. Sooner or later the stock market will show its hand. At this juncture, we have the pressure of world deflation weighing on ALL the markets. Against that, we have the various central banks trying to print us into prosperity and at the same time trying to defeat deflation.

How do you battle deflation? Easy, you print fiat money until deflation backs off and until signs of inflation appear. But what happens when you print to kingdom come, and inflation refuses to appear? Well, in that case your junk currency sinks to near-nothingness, and you leave the whole deflation problem to the next generation of devaluing geniuses.

I ask myself, why hold any dollars at all? What's the danger of holding everything in dollars? And my answer is -- when it comes to investing, nothing is certain. Sure, it looks as though Fed printing (now that Obama is in for another four years) will continue for the next four years or, at least, until Bernanke is convinced that he has defeated deflation.

Wait, what could cause Bernanke to halt flooding the system with his fiat notes? I think runaway inflation in tangible goods and political pressure could halt the Fed's wholesale manufacturing of Fed notes. Scandalous bubbles might appear. Bubbles in college costs, bubbles in medical, bubbles in collectibles, bubbles, in insurance costs, bubbles in food prices, bubbles in energy costs, bubbles in consumer optimism. Of course, none of this would appear in the Labor Department's phony CPI statistics. As we all know, figures don't lie, but liars can figure..."

 

at  http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/11/23_Richard_Russell_-_Attempts_To_Defeat_Deflation_As_Money_Dies.html