The transfer of power from the deep state and their puppet politicians to a populist backed government is going to cause major tremors in the coming months.
In my 60 years, I’ve never seen this country so divided and it’s mostly due to decades of misinformation being fed to the ignorant masses from the deep state and their bought and paid for media and progressive puppet politicians.
The changes that are coming are going to have a powerful impact on our financial system, both globally and domestically. There are ways to prepare for these changes, not only to protect your current wealth, but to profit from it as well and for those people who prefer to control their own destiny; the next few years could bring massive fortunes.
The bubble economies that have been created over the decades are structured on a debt based system, rather than an asset based system. The world is running on credit and borrowed money. Eventually there comes a time when the credit limit is reached and the debt has to be paid back and we have reached that point now.
The problem is that governments are bankrupt and don’t have the collateral to back up the debt nor the income to pay off the debt. This means that defaults are coming. They have already started in Europe and I believe China will be next followed by a chain reaction of defaults that will happen across the globe.
This will cause the multiple bubbles in stocks, bonds and real estate to implode and investors will lose the majority of their life’s savings because no one is paying attention. A massive blindside is coming.
So, what does history prove to us when this type of financial collapse has happened before? Owning precious metals and precious metal stocks during times of financial crisis has historically been proven to not only preserve your wealth, but increase your wealth.
Let’s look at the facts. We know that there is a hard Brexit coming, as the UK prepares to disengage from the failing European Union. There are multiple other European countries with similar agendas, including Italy, France, and the Netherlands, just to name a few. The EU’s days are numbered and this is just one of the catalysts that could set things off.
The US Dollar has been surging recently, but Trump has already stated that the US Dollar is too strong and he plans to implement policy to devalue the dollar going forward. This is very bullish for gold.
The Fed hiked rates last December, just like they did in December 2015. Every time they hike rates, the stock market stalls or falls and precious metals spike higher. The Fed predicted four rate hikes during 2017, just like they did during 2016, but those hikes never occurred because the economy can’t tolerate higher interest rates.
Now the Fed is already back-peddling and I believe they will be easing rates before years end. This will have a positive effect on precious metals.
Once the dollar falls below 100, the smart money will stop buying dollars and start buying paper gold on the Comex. However, the paper markets in precious metals are also numbered. Let me explain.
Global countries and central banks are buying gold as a reserve asset over US Treasuries. They see the writing on the wall and many are dumping US Treasuries for physical gold and silver. Many countries are using gold as a settlement currency for international trade.
The SGE (Shanghai Gold Exchange) is becoming the go-to exchange for physical gold and silver trading, rather than the paper futures markets of the Comex and LBMA. Simply because investors looking for physical metal know that the Comex and LBMA don’t have the metal to back up the huge amount of paper futures contracts being traded on those exchanges.
Over the next couple of years, this transition from buying paper futures in gold to buying physical gold will eventually diminish the influence of the Comex and LBMA paper markets and price discovery for precious metals will switch from the paper futures markets to the real physical markets of the SGE. In fact, it’s already happening now as demand for physical gold is far exceeding the actual supply of physical gold.
The best way to protect yourself is to allocate at least a small percentage (10%) of your portfolio to physical gold and/or silver, and mining stocks. People say gold doesn’t provide a return or pay dividends. That’s complete BS. Mining stocks give you the benefit of earning dividends while enjoying massive capital gains from the bullish moves in precious metals over the coming years.
My forecast for gold over the next few weeks looks like the chart above. I expect gold to continue its rise up to the 1250 range and then consolidate between 1250 and 1260 (Green Rectangle) before it finally breaks out and rises up to 1280 or slightly above.
Then I expect a short term retrace after bouncing off of resistance at the downtrend line. This retrace will reset the stochastic oscillator and allow gold to build some energy before the next leg up which will break through the downtrend line and continue up to new highs.
I expect the dollar to begin to weaken into the 2nd quarter of the year and that will provide the energy to push gold over the top of resistance and head to new highs.
The chart of (GDX) above illustrates the direction I expect for the next few weeks. GDX is currently consolidating within the green rectangular area, but I expect it to soon breakout to the upside before meeting resistance around 25.70.
We should expect a short term retrace from that resistance level before we see it break through and head to new highs around 28.
If you have positions in GDX, I would place a stop loss just under the blue uptrend line and follow the price as it moves up along that line. If we get a breach of the uptrend line and trigger our stops, we should wait until the next buy signal, which I will reveal in future weekly reports.
Stock Market: (SPY) (QQQ)
The Trump trade has lost its steam as stocks have been consolidating for the past couple of weeks. They could break higher after the inauguration, but if I’m correct, the ‘deep state’, who hates Trump and everything he stands for, will stop propping up the markets and allow the natural market to take its course and that will be down.
Keep an eye on this chart after the inauguration; if it breaks strongly below the lower channel line, then you can expect a major correction to unfold. If it breaks to the downside, as I predict, then I would enter into a short position in the (SPY).
Energy Stocks: (XLE) (UNG) (USO) (LNG)
We have opposing forces at work in Crude Oil right now. The OPEC deal to cut production appears to be falling apart as the countries that can’t afford to cut are defaulting on the agreement. If Saudi Arabia throws in the towel, we could see production ramp back up causing oil to fall rather quickly.
On the other hand, with the dollar beginning to weaken into the year, the weak dollar will have a positive effect on commodities going forward which will be bullish for oil. The question is which force will win out and drive the price of oil.
For now, I’m not positioned in the energy sector because of the uncertainty. For more aggressive traders, you may want to consider (XLE) shown below, as it appears to be a little more resilient in the past year and has some way to go before meeting any major resistance around the 83 level.
If you don’t already have a position in XLE, you may want to wait until it retraces down a little closer to the uptrend line before going long. Take note that the chart above is a weekly chart and traders should watch the daily chart for weakness down to the trend line before going long.
I would also place a stop just under the uptrend line and follow the price closely as it moves up towards resistance.
Housing Market Stocks: (DHI) (TOL) (PHM)
Despite the positive headlines today about the recent rise in single-family permits, housing stocks took a deep hit today and fell back below the downtrend line.
Housing has been in decline since the summer of 2016 and although it briefly breached the downtrend line a few days ago, it doesn’t seem to want to hold. As it gets closer to the bottom of the wedge pattern, it will have to break either higher or lower and my bet is on lower.
If it manages to consolidate or break higher, then it’s probably due to a short term bounce in the bond market which will allow rates to fall back down slightly and juice the mortgage markets and housing stocks slightly. But in the long run, I believe the bond markets next rally will be short term before collapsing back down and pushing interest rates higher through the end of the year.
This is one that I would watch closely to see which way it breaks before I’d place any positions. If it breaks below support at 27, then I would feel compelled to short housing going forward.
The current rise in the 10 year bond market will be short lived as it doesn’t have much farther to go before hitting a major resistance zone at 124.50. Housing stocks continue to decline even with the current uptick in the bond market and I believe that’s because the smart money knows this is a short term bounce and I expect a bounce off of resistance by the 2nd quarter, if not sooner. Bonds should resume their fall back into bearish territory.
(SLW) January 2018 CALLS
(GDX) January 2018 CALLS
(RGLD) January 2018 CALLS
Jamie Dimon Just Warned The Euro Zone May Not Survive
…if nationalist politicians including France’s Marine Le Pen rise to power in elections across the Continent this year, “the euro zone may not survive,”
If the euro zone implodes all hell will break loose. This would unleash terror in financial markets and major problems in the derivatives markets. Of course all of this chaos would be incredibly bullish for gold, silver, and the mining shares.
BIG MOVEMENT AHEAD IN THE SILVER MARKET…Serious Trouble In The Paper Markets
The 17 consecutive years of annual silver deficits totaling 1.8 billion oz, suggests the easy to acquire silver is now in tight hands. Which means, when investors finally start to rush into silver, there will be very little available to be purchased, only at much higher prices
They have artificially stimulated so many different asset bubbles, whether it’s debt, which is epic, or stock markets, many of which are at historic highs. If we have a crash, it will be in the second half of 2017.