Investment Outlook from Our Market Maven
Thomas Beecham is a self employed investor and trader with 20 years experience.
More than two years ago, he called the decline in Gold when it was at $1650. It breached $1100 this week and Beecham explains why longtime financial principles no longer apply.
by Thomas Beecham
In my articles from early 2013, I proffered the theory that the globalists took advantage of the contrived, but real collapse of 2008 to promulgate new procedures, new regulations, and novel ways of thinking to usurp control of all asset markets. Thus, the financial markets were no longer going to make sense to anyone using traditional economic analysis. For example, the Fed expanded the money supply but Gold plummeted.
INTERPRET THE ELITE’S MIND GAMES: UP IS DOWN; DOWN IS UP
Do not look to gold and silver prices as a barometer of financial decay. This link needed to be severed. The elite used their regulatory power and leverage to drive gold and silver prices up to unsustainable heights, so that they could methodically smash them down in a counterintuitive move to confuse the population and help to bankrupt the patriots who thought gold and silver were their tickets out of the system.
Indeed, there are cycles in any asset class, but the globalists produce the desired outcomes. Gold is the only possible way out of the unfolding financial dictatorship, so the globalists are making gold and silver holders miserable.
Most in the gold-bug community think the gold suppression scheme is managed primarily by US entities. But from what I can see, based on Sunday night’s price action, this cartel is global in scope and all the major governments are in on it.
Let’s look at the latest salvo of several since February 2013 in the gold maligning arrangement.
The ball got rolling last Thursday, during a technically weak spot on the chart for gold, when China “coincidentally” announced their updated gold holdings, which were much less than anticipated. If the ChiCom government claims it is not buying nearly as much gold as previously thought then why should anyone else accumulate it? Thus, gold and the miners sold off in Europe and America on Friday. But the real action took place when Asia opened back up on Sunday night.
The $50 plunge in gold prices that took place during Sunday night’s trading was sourced from Asia, just before the Shanghai market open. The technical chart was instantly repainted and the damage was done as 2.5 billion USD in notional value gold was sold down from $1,130/oz. to $1,080 in a matter of a couple minutes. Obviously the seller wasn’t profit driven. So count China in on the scheme, too.
Think about it. Nothing has really changed; the global debt situation seems completely untenable as it has since 2007. But the illusion of equanimity persists and the average person sleeps as gold falls.
Gold and silver will continue to suffer for the next year or so until a meaningful bottom is put in place. My guess, looking at the longer-term monthly charts, is that gold could retest the 1980 high of 850-875. I still stick to my view from April 2013 that 1,000 will be breached, perhaps in a matter of weeks. Silver prices dropped below my $15 prediction, so we could see prices drop to 10-12/oz. If you like gold like I do, let it fall and buy in when it is ready for its next secular upward cycle, perhaps as early as 2017. But, as long as interventions like Sunday night’s circus take place gold has only one way to go for now. Don’t try and pick a bottom.
US Equities: Perhaps when the US Fed begins raising rates and longer-term debt suffers, stocks could tumble in a head fake, but I see money eventually pouring into US equities from around the world to escape the carnage in the sovereign debt markets. We could see tremendous gains going into 2107. Stay away from foreign equity markets as they do not have the global currency backing them up.
Currency: Remember all the silly concerns of currency wars? There have been no currency wars and the US dollar will remain king. Long live the dollar; at least well into 2017. There have never been any US currency notes recalled and withdrawn. Theoretically, the first US dollar ever printed is still legal tender, which is why it is universally accepted. It’s the only one anyone can stash in the mattress.
Commodities: Take a look at the charts and don’t catch a falling knife. Don’t listen to Jim Rogers as that one-string banjo parrots what his handlers tell him.
Sovereign debt: Stay away.
Real Estate: Low end real estate will suffer as mortgages become more expensive. Offsetting this will be the rising rents as homeowners are displaced, unable to pay their higher priced mortgages. (Those will most likely be Alex Jones listeners). High end property could hold up better as it is the recipient of cash looking to escape the system.
What I say is not popular but it’s sobering. We need to face these truths and get on with our lives. We need to save our precious financial resources, spare ourselves untold heartache, and keep our heads above water. A broke remnant will pose no threat to the globalists, which is why I have to conclude that much of patriot radio is controlled on some level. I ask myself, how can these people be so obtuse? They continue to recommend and bring on guests that dispense the same advice over and over again, despite continually being wrong.