The Coming Hard Rain

Most of your typical economic analysts have never lived through a really tough period of time. For the most part, excluding a couple of short recessions, they have only experienced the good times. To them, a depression is outside their frame of reference. It has never happened in their lives, so it isn’t imaginable. It is the same for most people.

Yet there are a few voices from the Depression era still alive, and they are shouting a warning at the top of their lungs, hoping that someone, anyone, will listen.

In short: The recession is just starting, the stock market is set up for the biggest bear market crash ever, the government is going to be shocked when foreign lenders abandon it, and the dollar could devalue suddenly and catastrophically.

And in case you think these are the musings of old, cranky, disenchanted senior citizens overly worried about the government canceling their Social Security benefits, they happen to be among the most respected and even highest paid analysts today.

But will their warnings go unheeded?

“I saw it once, and I never want to see it again.” The 1930s were one of the toughest times in America’s history. It broke famous companies, it broke families, and it almost broke a nation. Economic analyst Richard Russell remembers those days, and he is afraid they are about to return

For Russell, following the Roaring Twenties life dramatically swung in the opposite direction. In 1929, the stock market crashed and his Uncle Irving jumped out of a 10-story midtown Manhattan hotel. One year later, everything had changed: Unemployment lines with tired men in patched clothing stretched around blocks and panhandlers clogged the curbs.

A decade later, the economy was still deteriorating—one step up, two steps down. Finally, in 1939, Russell recounts how his father lost his job and suffered a nervous breakdown. By that time, California had become a semi-police state. Sheriffs turned away travelers from entering towns out of fear that they would steal local jobs. Officials rounded up the homeless and shipped them to other parts of the country.

It took a world war to finally bring America out of the Great Depression.

Today, Richard Russell writes the Dow Theory Letters, an economic newsletter first published in 1958. The Dow Theory Letters is the oldest investing service continuously written by one person, and over his 52 years of work, he has never missed a single issue.

Recently, Russell told his readers that life is about to change in America—and not for the better. “Do your friends a favor,” he said. “Tell them to ‘batten down the hatches’ because there’s a hard rain coming. Tell them to get out of debt and sell anything they can sell (and don’t need) in order to get liquid. Tell them that … by the end of this year they won’t recognize the country” (Dow Theory Letters, May 20; emphasis mine throughout).

Today, Richard Russell writes the Dow Theory Letters, an economic newsletter first published in 1958. The Dow Theory Letters is the oldest investing service continuously written by one person, and over his 52 years of work, he has never missed a single issue.

Recently, Russell told his readers that life is about to change in America—and not for the better. “Do your friends a favor,” he said. “Tell them to ‘batten down the hatches’ because there’s a hard rain coming. Tell them to get out of debt and sell anything they can sell (and don’t need) in order to get liquid. Tell them that … by the end of this year they won’t recognize the country” (Dow Theory Letters, May 20; emphasis mine throughout).

Remainder of article here