More Losses Are Heading Wall Street’s Way

Grantham likes gold!  Superbubble expert sees more stock trouble ahead! 

If you think you’ve seen some blood spilled on Wall Street so far, wait until those losses double.  

That’s the warning from legendary investor Jeremy Grantham.

Grantham is co-founder and chief investment strategist of Grantham, Mayo, & van Otterloo (GMO), a Boston-based asset management firm. Wikipedia says that “Grantham has built much of his investing reputation over his long career by claiming to identify speculative market ‘bubbles’ as they were unfolding.”

We last cited Grantham in January when he wrote an important piece called, “LET THE WILD RUMPUS BEGIN!:  Approaching the End of) The First U.S. Bubble Extravaganza: Housing, Equities, Bonds, and Commodities.”

As Grantham wrote then, “Today in the U.S. we are in the fourth superbubble of the last hundred years.”  Investors may have months – but not years – to take their profits and head for safety, he added.

It looks like Grantham was right again, with bubbles starting to pop everywhere.  

Now Grantham expects the losses we’ve already seen in the S&P 500 and Nasdaq stock indexes to double: “I would say that at minimum we are likely to do twice that and if we are unlucky, which is quite possible, we will do three legs like that and it may take a couple of years, as it did 2000.”

Whether it turns out to be mild or severe, Grantham said on CNBC last week, “we should be in some sort of recession fairly quickly and profit margins, from a real peak, have a long way that they can decline.”

“I think this kind of 2000 bubble that we had is dangerously likely to morph into the 1970s, where inflation is always a part of the background discussion and where growth rate starts to dwindle away.”

As you might already have concluded, Grantham advises that gold and silver are good safe harbors to counter inflation.

Learn more by speaking with a Republic Monetary Exchange gold and silver professional.