The questions from readers are pouring in again, so I’m going to devote this week’s column to answering the most important ones. Let’s get started!
Q: Given yesterday’s tragedy in Brussels, where do your war cycles stand?
A: Precisely as forecast, they continue to ramp up big time. This phenomenon is not going away any time soon, not until it crests in 2020 or 2021.
Simply understand this: In times of plenty, everything is fine. But in times of scarcity, the entire social fabric of society can give way.
What plenty or scarcity am I talking about? Not your usual suspects, like food and water, or energy. I’m talking about the lack of trust that is now exploding to the surface all over the world.
Lack of trust in banks. In brokers. In local governments. In religion. In institutions. In law. In the police. In any kind of authority.
Just think it all through. Have you ever seen such a swift collapse in trust and confidence in the world?
Between entire countries and civilizations? Between philosophies? Between economic classes, the rich and the poor? Between entire civilizations?
No, you haven’t. And the main reason it is happening is largely due to the governments of the world and how they have financially repressed their own people for well over a decade now.
With artificially low interest rates. With rising taxes. With prying eyes and cyber-eyes. With crooked politicians and crony capitalism, and more.
The war cycles point up all the way into 2021, so fasten your seatbelts. It’s going to get worse. All of it. From ISIS to Boko Haram. From Brussels to Washington. From Wall Street to Main Street. A collapse in trust and an explosion in tension and conflict.
Q: Gold stopped dead at the $1,285 level and started falling again, just as you said it would. What’s next for gold?
A: No changes. My forecast models take gold lower, back to the $1,180 level, possibly a tad lower, by late May. A solid breakout would only be indicated by a close above roughly $1,302.
Q: Oil sure bottomed as you said it would. Now it looks toppy. Your thoughts?
A: Yes, oil has some pretty stiff resistance at the $40 to $42 level and should now trade sideways for a few weeks, in a trading range between roughly $36 and $41 — before taking off again, up to the $50 level, expected in May/June.
Q: Some say inflation is starting to come back. Do you agree or disagree?
A: I disagree. I don’t know where they see it. It’s not showing up in any official numbers, nor unofficial stats.
It’s not showing up in commodities, in the credit markets, in interest rates. So I don’t know what they base their forecasts on, other than the fact that Mario Draghi now has the pedal to the metal printing euros.
But as I’ve said all along, printing money by itself is not inflationary.
Q: What are your thoughts on the GOP, Trump, Clinton, etc.?
A: If I told you my thoughts on them, this column couldn’t be published!
All kidding aside though, what you are witnessing is the implosion of Washington. The lack of trust that I discussed earlier. Americans largely do not trust career politicians, or Washington in general, anymore. Hence, why Trump is so popular.
So the nasty politics you are seeing are part and parcel of the times we are in: Times when entire sovereign countries are torn apart, through both civil strife and even international conflict.
Q: Latest on the Dow Industrials? Like you, I see a pullback coming. But then, it never comes. Thoughts?
A: The major indices are caught between two forces right now. In one corner, is the long-term bull, being driven by international capital flows which still largely point to the U.S. from the rest of the world.
In the other corner, is the bear: A list of technical and internal indicators that are mauling away at the stock market, despite the headline numbers in the major indices like the Dow Industrials and the S&P 500. In other words, most publicly traded stocks are already either in a bear market, or pulling back.
|The major indices are caught between two forces. Who will win the fight?|
Who will win the fight? Long-term, the bull will, and the Dow will soar to 31,000.
But I maintain my view that the markets will likely, even the big name stocks, hit the mat once or twice before the bull really takes control. Worst case for the Dow is still roughly 13,900.
Q: Will oil ever go back above $100?
A: This is one of the most popular questions I get. The number is often different, but everyone now wants to know if oil will ever experience another bull market.
My answer: Yes, it will and indeed, a new bull market has already started. That said, it will not be a rip-roaring bull market in oil, due to what the market has gone through, alternative and hybrid energy advances, the state of the global economy and more.
But I do expect that oil can reach new record highs by late 2020, mostly on the back of geo-political turmoil, rather than demand driven.
Q: The Bank of Canada has sold all of its gold reserves. Do you expect more central bank sales of gold?
A: Yes. I forecast quite a while ago, that central banks would start selling their gold again, and probably at or near the lows. Which is precisely what Canada did.
Central banks don’t care for gold. They don’t want gold. They don’t really earn anything from gold. And they want to get rid of it once and for all and make it a dinosaur of the monetary system.
So don’t be surprised if you see more central bank gold selling. But don’t take it as a bearish sign. Take it as a bullish sign. They almost always sell at the beginning of bull markets (and buy at the beginning of bear markets).
That’s it for now. Stay tuned — my models are showing that this month and next will be pivotal for almost all markets, leading to major trends unfolding and a slew of new profit opportunities.
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