Richard Russell - Silver Is The Greatest Buy In The World Today.
The Godfather of newsletter writers, Richard Russell, just purchased more physical gold and silver himself, and said that silver is the greatest buy in the world today. He also discussed stocks, China, inflation, and dared the U.S. Treasury to audit the United States’ gold reserves.
Russell: “Can markets be neurotic or hysterical? Markets are made by people, and currently I believe we have a lot of semi-hysterical people in this market. ...Stocks are not cheap. My feeling is that the only bargains around are silver and gold. I bought a batch of American Eagle one ounce silver bullion coins today, on the temporary weakness in silver. I believe silver is the single biggest bargain around, at today’s prices. I understand that physical silver is so scarce that the US government is buying silver in the open market in order to mint its coins. On the other hand, my local coin dealer says there’s plenty of silver available. But I wonder for how long.
Four things I dislike about this market. Heavy insider selling, margin debt near record highs, S&P financials are in a large, negative head and shoulder top, and the January barometer was negative. On top of this, it seems China is in trouble. Thus a major importer of commodities has turned feeble.
The world is caught betwixt and between. The betwixt is inflation and the between is deflation. By now Janet Yellen must know she is fighting the forces of deflation, and it's a question of how she will address this problem. My guess is that she will address it with additional QE.
The battle against deflation is very serious and the Fed knows that once deflation gains the upper hand, we are headed for a serious recession. While inflation can be halted easily with higher interest rates, deflation is another story; it tends to take on a life of its own. For holders of gold, ironically, deflation is a convoluted form of good news, since it will require massive infusions of liquidity in the fight against inflation.
My stance continues to be “gold, gold and more gold,” with just enough cash to handle the needs of the day. This may sound boring. But in this case, boring equates to peace of mind.