Expectations 2013-2017

Hi All,

I thought I’d provide a blog post on my expectations over the next few years – this is not my own research, however, I have spent many hours reading and researching the facts.

As usual I personally find that Elliott Wave International provides me with the most unbiased research on the economy out there, so it’ll be no surprise to you that my expectations run along side those they mention in their reports and published works.

It is vital to understand that I do not use or subscribe to Elliot Wave COUNTS – there is a massive difference between their [EWI] wave counts and the economic research they publish – I solely focus on the economic research they provide.

It’s been fairly clear that ever since 2000 we’ve been in the grips of a major deflationary depression, this has been highlighted with force since 2008, for example:

  1. In an INFLATIONARY environment mortgage lending goes UP – it hasn’t!
  2. You don’t issue QE in an INFLATIONARY environment – we’ve had QE 0,1,2 and unlimited!!!! = Not normal
  3. Stock markets are virtually range bound, that does not happen if all is well

The use of Time Cycles show very clearly when to expect major turns in the markets, these turns in the markets govern the mood out there in normal land.  There is expected to be a major turning point this year 2013 and 2016.

If this turn in 2013 occurs as expected then it should force the markets down for 3 years or so.  So we really need to know what to expect if that outcome occurs:

  • Falling/stagnant markets force the media to try to explain the reasons, some of these won’t make sense as the media just explains any old crap in the hope of sounding and looking half knowledgeable
  • This heightened media coverage actually makes the public start to think about the people running their money – “How did they not see this coming….” etc
  • This makes the public anxious and angry = increased social anger
  • If the markets fall then Gold and Silver are fully likely to follow suit – they [gold/silver] are not and never have been safe havens!  If you believe that you’ve been misled by which “experts” you’ve listened to.
  • I’ve covered in other blog posts more aspects that should be affected such as property prices, jobs etc

I need to focus on one key area as it’s crucial – the BOND market.

At present people (as expected) have been flocking to Bonds – for the past few years they’ve accepted and continue to accept negative interest rates – real returns.

Okay so apart from all the usual nasties associated with a bear market, the world has one major problem – DEBT, the world has become addicted to debt, it simply cannot continue, something has to give.

The main options are governments significantly reduce spending, increase taxation, instigate other radical ideas/policies or default – none of these options helps Joe Public.

At present people are flocking to the US Bond market and the US$ – This [at present] IS the safe haven asset of choice (NOT gold/silver) and once again this was predictable a couple of decades ago, so it’s nothing new based on “recent” events.

IF the US$ becomes for whatever reason unwanted and as the worlds reserve currency it is called into question – there’s stacks of evidence for this happen! – then this will be dreadful for the entire world economically.  This is mainly likely to occur due to debt levels of the USA and the ability to repay.

So If we get into the situation of the US$ failing and failing to be the world’s reserve currency then the entire worlds paper currency becomes questionable.  In my opinion this is the situation that will propel Gold/Silver to mega new price levels – but only if this happens.  the failing of the worlds reserve currency will not happen lightly.

It is then likely that Gold/Silver will become currency and the acceptance of paper bills/notes rejected by retailers – the big problem is there’s probably not enough gold/silver in the world for everybody!

This is likely to occur sometime in the next 3-4 years if the worst is to happen, as usual nobody has the ultimate crystal ball so we will just have to wait, watch and see what actually does happen.

In conclusion:

The stock markets to be down to flat for 3 years, during this 3 year end of cycle run all focus will be on the US$ and bond market, it will take a massive blow to bring the US$ down and if it happens [of which I do have doubts] then I’d expect Gold and Silver to massively explode in price towards $5,000 troy oz or more as the world clambers to own those assets to pay for goods/survive.

Interest rates are likely to remain very low during this time too.

China and Russia have been dumping the US$ for a number of years and buying up gold so they are obviously blatantly aware of the potential problem the US$ could cause if it failed.

In all honesty the world is run on and by credit, those supplying the credit won’t lie down without a fight – how ugly it could get I can’t imagine at present, I personally don’t expect paper based currency to die, for me it’s one step too far.

I think that the focus will solely be upon debt reduction by the main global economies and getting there house is complete and utter order – this scenario fits well with the time-scale and time cycles going forward.

I’ve NOT detailed every little thing that’s likely to happen such as further bank failures and the like, just a generic broad synopsis of possible events should the crap hit the fan.

Enjoy

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