Why Richard Russell is Very Worried About the Bond Market

Richard Russell thinks the bond market may be saying ENOUGH with the quantitative easing, reports The Daily Crux.

From his Dow Theory Letters:

The bond market is now very close to saying, "We've had enough."

... Many older subscribers probably remember my lifelong emphasis on the POWER of COMPOUNDING. But what of the power of negative compounding on debt? I think we are about to find out.

The power of negative compounding will be brutal. The cost of carrying the world's debt (including the US national debt) will be devastating. It will be highly deflationary and it will crush everything in its path.

You can read Russell's full commentary here.

I don't subscribe to Russell, but I do try to follow his writings and thinking as best I can from the outside, and this is the first I've heard him mention deflation. Very interesting!

Here's what Russell had to say in early December about gold, the dollar, and the Fed's effort to re-inflate.

Richard Russell on the Disappearing Dividends

Nice scoop by the Daily Crux - Richard Russell's comments about current dividend levels...or lack thereof!

The second quarter of 2009 was a dismal one for corporate dividends. Standard & Poor's recorded an all-time low of 233 dividend increases plus resumptions and extras. During the April through June period, the 7,000 publicly-owned companies that S&P follows, were down 45.8% in dividend increases from a year ago.

Russell has been around the block more than a few times, and is as sharp as they come. Heed his message loud and clear - talk of green shoots is cheap, show us the money!

At historic stock market bottoms, dividend levels typically average around 6%. That's why it's called a bottom...tough to go wrong investing when yields are that high.

Where are yields now? A paltry 3% last time I saw. We'd need to see the S&P around 450 to see dividend levels where they should be at market bottom!

And if you're not buying a stock for the dividend, that means by default you're buying it in hopes of a rising mulitple. Well multiples are quite high across the board right now, and earnings continue to evaporate right before our eyes...so I would take a long, hard look at every stock you own that doesn't yield some serious dough.

Looking for quality, high-yielding stocks? Tom Dyson is your man - check out his 12% Letter here. And Tom knows how to go long AND short...crucial in today's nutty environment.

Richard Russell: We're Nearing Gold's Mania Phase

Legendary investor and investment writer Richard Russell believes we're nearing the speculative, or mania, phase in gold:

Every major primary bull market that I have studied or lived through ends up with a wildly speculative third phase. This is the phase where the public and the crowd rushes head-long into the market. We saw this last in the years around 2000 when people bought any kind of tech stock. "I don't care what it is, if it's tech, just get me in!"

My belief is that we're now nearing the beginning of the third speculative phase of the great gold bull market...

Read his full piece in today's Daily Crux...

Maybe the upcoming advent of gold dispensing ATM's was enough to tip Russell over the top.

How high will gold go?  It's anyone's guess in a mania...remember tech stocks in 1999?  Casey's Jeff Clark outlines his reasoning why he believes gold will go to $2,000...and then much higher...in this guest article.

Richard Russell Blasts "Government Sachs"

Great rant from Richard Russell today on the company that runs our Federal Government - Government Sachs:

It's now obvious that the Fed and the Treasury want, above all, to save the banks. Everything else is secondary. It's also increasingly obvious that the bankers own the nation and that Goldman Sachs runs the nation and the banks. The whole thing is so flagrant that my head spins. And what Goldman doesn't control, the Pentagon controls.

Click here to read the whole rant at The Daily Crux...

Richard Russell: Gold & Silver moving into their third (speculative) phase

Richard Russell's latest comments on the action in the gold and silver markets:

As I said, the gold action is changing -- what's happened to the profit taking? Gold buyers have stopped taking profits, the are buying and sitting with their gold. Physical gold has now been swept off the market. Coins are only sold by dealers with big premiums over spot -- that is, if you can find a dealer who has any gold coins at all.

A few sites ago, I wrote that I believe gold and silver are finally moving into their third (speculative) phase. Seasoned investors are thinking in terms of the demise of the dollar and of all fiat money.

I am also of the opinion that we're going to see one whopper of a bubble in gold and silver before this commodity bull market is all said and done. Maybe $2,000 - $3,000 - even $5,000 gold - anyone care to jump in with a wild guess?