“’One of those features is the bear-market rally after the initial derating stage of the decline but before the economy has clearly begun to deteriorate, as it always has when superbubbles burst,’ said Grantham. ‘This, in all three previous cases, recovered over half the market’s initial losses, luring unwary investors back just in time for the market to turn down again, only more viciously, and the economy to weaken. This summer’s rally has so far perfectly fit the pattern.’”
USAGOLD note: This is the latest in a series of warnings from Grantham over the past couple of year. He commands a great deal of respect on Wall Street having predicted the market crashes of 2000 and 2008.