How does a long-term bear market in equities favor gold?
*Dow Theory Letters, by Richard Russell, August 9, 2012
“Now I’ll tell you a little secret. We’re now in an international
secular bear market. I think this secular bear market has years to go
— maybe even another five years. And nobody wants to talk about it —
or even mention it. If this bear market has years to go, then it will be
subject to multiple bull and bear market cycles, all falling within the
boundaries of the single big secular bear market.
Wall Street already suspects that what I’m saying is true. And that
means years of famine for the Street. Wall Street makes money on
commissions. To do that, the Street needs VOLUME. How do you get volume
when your business is suffering from a famine? Answer — talk, rumors,
B.S., endless hot stock picks, short covering rallies, promises that the
central banks will create gobs of MORE money, hopes, hype, and pure
baloney. And above all, cyclical bull and bear markets, all occurring
within the great secular bear market.
But the funds — what will they do? They’ll try to survive with hype and
talk and advertising. They will have to survive with lowered
expectations in an economy which, at best, has a Gross Domestic Product
that is increasing at 1% a year (and this mostly through Fed-created
There will be a huge desire on the part of every nation to export. To do
this, nations will need (want) a cheap, competitive currency. This will
be the beginning of the end for fiat currencies. And the ultimate
survivor and winner will be gold.”
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.