Belkin – We’re Facing A 1987 Selloff & Eventual Hyperinflation

Today the man who counsels prominent hedge funds, investment banks, institutional money managers, mutual funds, pension funds, and high net worth individuals across the globe, told King World News that he believes we are facing a 1987 type scenario where the markets will get badly shaken.  Belkin, President of Belkin Limited, also believes we are eventually headed for a destructive hyperinflation where gold will have an extended upside move.

Here is what Michael Belkin had to say in this powerful interview:  “Back in 2009, in the spring, I was extremely bullish.  Back in late 2002 when the stock market bottomed I was bullish on the economy and on markets.  The time to buy is when blood is in the streets.  We are so far from that.”

Michael Belkin continues:

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“The markets are so overextended.  The markets have been going up since 2009, for almost 4 years now.  We need to have a selloff, that’s a healthy thing for the market.  The other thing I would like to say is sell rallies.  When the market is going up you buy the dips and the trend bails you out.

When the market is going down you sell aggressively into these brief, two to three day rallies that we’ve had, and that’s what I’m telling my institutional investors to do.”

Belkin also discussed government counterfeiting of money:  “I used to work for a top three government securities dealer, Salomon Brothers, back in the 80s and 90s….

“How this works is the Treasury issues debt, the government securities dealers buy the debt at auction, and then the Fed comes in and buys the debt from the government securities dealers. That’s what debt monetization is.

So when Salomon Brothers bought $5 billion of the 2-Year Notes at the auction, and then the Fed came in and did a coupon pass and bought $2 billion of that, they credited Salomon’s account with $2 billion.  That’s counterfeited money.  That’s brand new, high-powered money.  I had some mentors that were former Fed officials so I have a pretty cynical view on this whole process.

…I think we’re in a 1987 scenario where interest rates go up, the bonds fell off, and the market gets shaken.  And then at some point there is a real turning point, I don’t want to use the word ‘crash,’ but a high volatility selloff in the stock market.  At that point, I think there will be a flight back into bonds and gold and gold stocks could have a huge rally … First you have to have a deflation in asset values, and then you have to have a policy response that’s really pedal to the metal.

John Exter was a former Fed official.  He was my mentor.  He’s now passed away, but he quit in disgust.  He managed the Fed’s gold reserves in the  William McChesney Martin (Former Chairman of the Fed) years.  When they started printing money and he had to deliver gold over to the Bank of France and the Bank of Japan because we were on the gold standard, he just quit the Fed in disgust.  But what we have now is so far beyond that.

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