What’s the 'Big Money' Doing?
by Richard Russell
by Richard Russell: Something's
you don't know history, then you don't know anything. You are a
leaf that doesn't know that it is a part of a tree." ~ Michael Crichton
Central banks the world over are spewing out their respective
currencies over the world. If this continues, won't there be an
eventual panic out of fiat currencies?
The answer is yes, but before that, interest rates will be
rising, and that will halt the machinations of the various central
banks. Political pressure will force the central banks to curb their
But I want
to talk about something else. The action of the big money, the sophisticated
money, tends to lead the markets. In view of that, let's ask ourselves
what the "big money" is doing now. We hear that classic
art pieces like the Klimpt painting and Munch's "The Scream"
are going for well over $100 million. We hear of wealthy individuals
buying wildly-priced apartments in New York and London and Hong
Kong. All of this adds up to the "big money" placing their
paper money in rare one-of-a-kind tangible items. These are items
that will be considered items of wealth even if their respective
currencies go the way of all fiat currencies, which is a way of
saying these items will be deemed items of great value even if their
respective currencies become worthless.
But what of
you and I, what of the man on the street? You and I can't afford
to buy expensive collectibles. How can we protect our purchasing
power if the purchasing power of our fiat currency continues to
plunge? Ah, this is the basic question. You and I can't buy a thousand
acres of land in Montana. What can we do instead? The answer is
that we can do what the Chinese and the Indians and the Vietnamese
are doing, we can go to what I call "the common man's rout,"
we can buy gold and silver. Joe six-pack can buy one gold coin a
month or an even smaller denominated coin. So in a strange way,
gold is the "poor man's protection" against a collapse
in the purchasing power of his respective fiat currency.
it in the entire history of man, no fiat currency (with nothing
but a government promise behind it) has ever survived! And you think
our current Federal Reserve notes will be the great exception? If
the current Federal Reserve notes survive for another sixty years
they will be making history, they will be doing what no other intangible
fiat currency has ever done.
Ah, you see,
the smart money know this. Which is why you are seeing great works
of art, rare collectibles, classic cars, arable land, apartments
in upper East side Manhattan, gem quality rubies, emeralds, diamonds
and sapphires going for prices that most experts can't believe.
doesn't care what a one-of-a-kind red diamond costs. Smart money
knows that this same diamond will be an item of great value a hundred
years from now.
So my advice
to my beloved subscribers is follow the smart money, follow the
people who can buy the best advice on the planet, and think ahead,
think ahead to the time when there will be a panic out of Federal
Reserve notes and a frenzy to own items of tangible value. Think
of "the poor man's item of eternal wealth," think of gold.
with permission from Financial
© 2013 Financial