Richard Russell: A Gold Tsunami Is Coming
I do not always agree with 86-year old Richard Russell, author of the Dow Theory Letters, but there is no disputing that he has been on the money with his gold recommendations ever since the low of $250, 10 years ago. He believes a final explosive phase the yellow metal is approaching - a viewpoint I concur with. The paragraphs below are an excerpt from a recent report.
"We're moving nearer and nearer to the edge of the hurricane. I can feel it in my bones. Every newspaper now carries an ad for gold. The ironic clincher was this ad below that I clipped from a weekly newspaper.
"Is there a gold bubble? Are you kidding me? Here's an ad that somebody paid for suggesting that people should turn in their gold (!!) for Federal Reserve Notes. They're not telling you to buy gold during one of the greatest bull markets in history - hardly, they're asking you to throw parties in which the object is to get ignorant people to SELL their gold.
"I can feel them caressing my face - the early breezes. They are blowing gently and hinting of the forthcoming gold hurricane that will sweep across the US and the planet with all the force and power that was seen when gold was first discovered at Sutter's Creek during the California gold rush of 1849. The gold rush of the 2000s is in the wings. The old phrase is ringing in my ears again (I haven't heard it since the late '70s): 'There's no fever like gold fever.'
"If the temperature of full gold fever is a hot 106, we're only at 99 now, but I can feel it, I can tell you that the temperature is rising, rising.
"The panic to buy gold will override everything else. It will be one of the greatest financial phenomena that most of today's investors will ever see. It will blot out everything else like a cloud blotting out the sun.
"After the calm, comes the storm. We've been watching 10 years of gold climbing amid an atmosphere of calm. The great gold tsunami lies ahead. It will be historic.
"... BEFORE the great gold tsunami we might have a frightening gold correction that would clean out all the gold sceptics. This 'clean out' may be necessary prior to the big gold tsunami, and it's a reason to hold some cash and not put ALL your money into gold at this time. Remember the old adage - 'The market always does what it's supposed to - BUT NEVER WHEN'."
Source: Dow Theory Letters, April 21, 2011.
Prieur du Plessis has 27 years' experience in professional investment research and portfolio management. More than 1,400 of his articles on investment-related topics have been published in various regular newspaper, journal and Internet columns. He has also published a book, Financial Basics: Investment.
Prieur is chairman and principal shareholder of South African-based Plexus Asset Management, which he founded in 1995. The group conducts investment management, investment consulting, private equity and real estate activities in South Africa and other countries.
Plexus is the South African partner of John Mauldin, author of the Thoughts from the Frontline e-letter, and also has an exclusive licensing agreement with California-based Research Affiliates for managing and distributing its enhanced Fundamental Index methodology in the Pan-African area.
Prieur is professor extraordinaire at the University of Stellenbosch Business School, teaching investment management. He also serves as Honorary Consul of Slovenia for South Africa, actively developing economic, cultural and scientific relations between Slovenia and South Africa.
Prieur lives by the words “living to run, running to live”. This motto manifests itself directly in his management style and keen participation in long-distance running, and also in Plexus’s sponsorship of the annual Plexus Races (marathon, half-marathon and 8km). The primary goal of these events is to raise funds for a number of charities, especially Proud Partners - an organisation formed by Plexus in co-operation with Prieur’s wife, Isabel Verwey (former TV producer and presenter), which uplifts previously disadvantaged communities through the provision of musical instruments and tuition to a large number of schools.
Prieur is 55 years old and lives with his wife and two children in Stellenbosch, Cape Town. In addition to running, his recreational activities include reading, travelling, motor cycling and scripophily.