We’ve Seen the Top of the Stock Market
We’re flattered at the number of our clients and readers that have reached out to comment on our calling the top of the stock market last fall.
And our repeated recommendation to ”take any stock market profits and move them into gold.”
There’s an old saying that nobody rings a bell at the top of the market. They didn’t have to. When you’ve been watching these things as long as we have, they don’t have to ring a bell. We could see the coming stock bloodbath on our own.
We were so concerned that we sent out a Special Alert on September, Warning Signs Flashing Red! We don’t do that often, but we realized the Fed had stovepiped about all the wealth to Wall Street that it could. We urged immediate action, writing, “Warnings that go unheeded do no one any good. This is already the longest bull market in stocks in history. Can it go on forever? No.”
As evidence, we cited a bear market indicator that was at its highest level in a half century!
A few weeks later we asked, Is the Fed About to Tank the Stock Market? We asked what should have been the obvious question: “Today’s sky-high stock prices are the result of years of massive interest rate manipulation by the Fed on the downside. If lowering rates drove the markets to these levels, what will a regime of higher interest rates do?”
It was clear to us that the Fed was intent on “driving a stake thru the heart of the market.” It was such a certainty in our eyes that we were left only to ask whether the Fed was doing this on purpose or simply as a continuation of 105 years of Fed blundering.
We don’t claim to be psychic, much less foolproof. But we’ve seen it all before. For example, we remember Alan Greenspan driving down interest rates in the early 90s to provide cheap liquidity for the banking sector. It was good for Chase Manhattan and JPMorgan, but it created a brutal stock market bubble that burst later taking trillions from the American people.
We’ve seen it all before. The bubbles and the bailouts. The cronyism and Keynesianism.
So, when the S&P 500 peaked at 2940 in September our clients had already been warned.
The Dow Jones Industrial Average peaked at 27,000 at the beginning of October. As you know from the screams of anguish in the canyons of Wall Street, it’s been mostly downhill ever since.
On October 9, within days of that top, but before in was evident to the whole world that the stock market was in trouble, we cited Ron Paul. “We have the biggest bubble in the history of mankind. The bubble is bigger than ever before. There’s no avoidance of a correction….”
“Because it’s the biggest bubble ever, I think it’s going to be very bad,” he said (Ron Paul: Stock Market Trouble Ahead).
We agreed and wrote, “What can informed people do to protect themselves from a brutal stock market correction? We recommend our clients buy gold.”
We kept the warnings and Special Alerts about the stock bubble coming for months writing, “Those of our clients that have enjoyed the stock market run over the last ten years are strongly encouraged to move profits into gold now.” See here, here, and here.
Now the Dow is off 4,555 points. Nobody’s portfolio should have to suffer that kind of loss.
But our clients had already been prepared. Gold’s low this year was $1,167. Earlier this week it touched $1,270 before settling a little lower.
Our job is to help our clients protect themselves and profit. So, we’re pleased to hear your kind comments.
The problems for this stock market are far from over. The need to own gold is becoming hard to miss. We have a long way to go.