“In the end my survival vehicle will be gold”

The global economy is moving into a survival period in which gold will provide
one of the few areas of protection for investors, according to Richard Russell.
The publisher of Dow Theory Letters the worlds longest-running daily investment
letter and a long-time gold bull, Russell reiterated his bullish case for the
yellow metal and gold-related investments this week. I now think of compounding
in terms of debt and the compounding of that debt load, Russell wrote. Today we
deal in trillions. Example Bill Gates, the richest man in America, has about $6
billion in assets. One trillion equals 1,000 billion. The US national debt is
$15 trillion and counting. But its currently compounding at historically low
interest rates. Meanwhile the Fed and the central banks of the world are
creating new money at prodigious rates, he added. Its only a matter of time
before all this new money sets off inflation, no matter what Chancellor Merkel
is trying to do. I expect this inflation to appear in the next year or two; with
the rise of inflation, comes higher interest rates. Rising interest rates are
death to compounding debt. Russell went on to say that My advice. We are moving
closer and closer to what I call survival period the period where the magic of
compounding turns into what will be the poison of compounding. This isnt a time
for timing. This is a time for action. Reduce your exposure to bonds and all
items that provide fixed interest rates. Similarly, reduce your exposure to
stocks except the gold miners. Look to expand your positions in
inflation-protected assets, especially gold. Those who are holding stocks in the
hopes of the usual rebound are going to be terribly disappointed in the years
ahead. This bear market is going to be unlike anything weve ever seen before. In
the end my survival vehicle will be gold. I say again, timing is hopeless. Gold
will have purchasing power and true wealth as almost everything else is
destroyed by this unprecedented bear market. Lastly, Russell once again spared
few punches in criticizing Americas policymakers.