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Between
November 1 and December 15 we like to post our next years’ predictions
for those markets and social situations affecting our trading and investing
ideas.
We
previously forecast that both the stock and bond markets would sell-off for
numerous fundamental reasons. Of course the timing and the amount of selling
is front and center on everyone’s mind.
Before
we continue with our predictions it is important to review this email from
our top advisor. He has been consistently correct in his forecasts and has
brought me a great deal of insight regarding things I would have never
considered. Consider this a fundamental back-drop covering the next several
years. After this note, I will elaborate further on my forecasts and suggest
some prospective dates for our trading and investing.
Our
Best Advisor Says It’s All Over.
I’m
not a pessimist but our top and best advisor who seems to be always
correct offers the following. If he is correct, and I suspect he
is, we have a long slow Japan-style slog in the economic mud with a major
system breakdown, like Russia’s bust-up some years ago. I suspect
somewhere along the trail in this movie, the USA Sheeple go to pitchforks and
torches. I sure hope not but it almost seems inevitable. What a shame that a
few Marxists can do so much permanent damage to my beloved America. All
political parties are guilty.
“The
midterm elections are anticlimactic and change nothing. In the short term, it
makes no difference how many Congressional seats the GOP captures. The
Dumb-O-Crats have already won. Since taking control of Congress in
2006, Hussein and his wrecking crew have jammed through more socialist legislation
than all the past liberal agendas combined (had) ever hoped to
accomplish. It's a done deed.”
“If
anyone thinks that changing the mix of Congress with more elected
conservatives will fix things; (they are) dreaming. The new Congress
will be just as clueless, incompetent, corrupt, and swayed by the
lobbyists. The only priority will be to get re-elected, as usual. Any hopes
and promises will be dashed by reality. The reality is any
legislation that the new Congress passes to try to undo Hussein's Marxist programs will
be simply vetoed. The GOP will not have the votes to over-ride a
Presidential veto. This is a Dead-End.”
“The
Constitution gives the responsibility of appropriating funds to the House.
They may be able to shut-off any additional funds for existing programs, such
as Obamacare, etc., but the basic funding of those programs is
already the law of land. Control of the Federal purse strings is of
no help to undo the damage already done.”
“So,
there will be two years of legislative gridlock. In the mean time,
Hussein will expand (entrench) his new socialist programs with a blizzard of
Presidential executive orders and appointees by-passing Congress. These
Dumb-O-Crat political appointees in charge of hundreds of Federal
agencies, set policy that interprets, and bends the intent
of new and existing programs to the socialist ideology...encasing them
in concrete. It will require literally decades of
political dedication and action to undo the damage…and that is not
likely to happen.”
“On
top of all the political shenanigans, is the meddling of the FED with the
money supply. The greatest theft of public money, ever, will
continue on an even grander scale to transfer even more to the
bankers, the Wall Street Boyz, and the politically connected. That
is the one, and only, sure outcome of these elections. The
citizens (Sheeple) aren't even a consideration, other than to ratify
the rip-off with their votes.” -Northern Advisor
As
we write this forecast on Election Day, we feel certain Bernanke will smooth
talk the public after the FOMC meeting tomorrow. These efforts are designed
to ease the minds of Wall Street, central bankers, and foreign nations while
preparing to jam another $500B in QE2 printing of new bonds, bills and
currency. The outcome is a dollar dilution-devaluation with a large move
toward inflationary destruction of international credit. They hope for and
talk of the opposite. Expect $500B more in each quarter in the first three
quarters of 2011; $2 Trillion total.
We
think something breaks in the credit markets in 2011. It can come early in
the year based upon bond failures outside of the USA or, be potentially
created by some Black Swan effort we cannot yet see. One of the
very large near term bubbles is in Hong Kong Real Estate. Many say Hong Kong
is isolated within China, We say that when this one cracks, it rolls over all
of China, takes down their stock market and spreads over the world. This
could be in Q1 of 2011 or as late as the fall of 2011.
Europe
is in big trouble, just like America. That situation is different in that the
European Central Bank does not have all the powers of the Federal Reserve and
U.S. Treasury. By charter, the ECB is not permitted to make loans to member
countries. However, in light of all their failing nations and emergencies,
the ECB is buying those nations’ crummy bonds to help them. This is
an accident waiting to happen. Irish bonds are going scary and those of
Greece are basically, in my view, worthless. Even Portugal, which is tiny and
holding about $6B in gold has serious problems. In 2011, either Spain or
Italy takes a bad economic hit and they all go down like dominoes.
Germany
is the single European powerhouse. They have been trying to grudgingly help
their broken neighbors but cannot save the world. No one has that kind of
credit or cash. As pressures mount in Germany for the PIIGS to borrow more
from them and German export sales taper-off on weakening overseas
customer’s, new changes arrive. Mrs. Merkle is a tough cookie and is
trying to protect German credit and their economy. Germany’s Mr. Alex
Weber who holds the financial reins is on her side. Germany is going to
and must cut the strings attaching them to the ECU, the Euro and avoid being
trapped by being too generous with broken neighbors. Germany will start
trading the old German Marks currency along with the Euro and soon after cut
all ties and gradually go it alone. Adios for the Grand Euroland
Experiment. Hello Deutchland!
China
has been the growth powerhouse of the world. This was enabled for several
reasons. Among those are millions of people working hard as cheap labor;
grateful to have a job. Next, the USA companies moved factories and millions
of dollars to China to take advantage of a much lower cost of goods. Further,
the money Boyz in NYC saw an opportunity to raise billions to invest in China
for the fees, commissions and the vigorish. Now China, which has been paid in
US Dollars and bonds is seeing the end of American Credit. We estimate
they hold nearly $1 Trillion in toxic U.S. paper and another $1 Trillion in
other financial markets; all at risk of cratering.
Trees
do not grow to the sky. As Hong Kong saw a +90% increase in real estate
prices just this year as their US exports were going down the drain; reality
comes to the fore. For those who say this goes on forever we say bunk. This
economy is command and control more than most as the government can move
faster not asking permission of any legislature or the public. They decide
and they just move quickly.
Chinese
are excellent traders and very smart. Those controlling the USA economy as in
our congress, Federal Reserve and Treasury can howl and complain all day.
China will do what is best for China. The irony is Geithner and Bernanke do
the same but are forcing the wrong decisions on a path to destruction. The
collective scream does nothing. All will lose.
Navigation
through volatility for most kinds of investing and trading is going faster
with wider trading ranges. This is going to scare many Sheeple into making
wrong decisions. The more volatility we see the deeper the fear as good
trading ideas go against the investors; TEMPORARILY. One of the top
trading exchanges will fail. We do not know which one but have some
ideas. This happens
over 1-3 years.
Any
exit strategy from the Middle Eastern wars will be sloppy and uncomfortable.
In 2011 it shall become obvious most of our troops will have to pack-up and
leave. This guerilla war should be left to highly paid mercenaries who manage
methinks better under the cover of darkness with no identities. The USA
simply cannot afford to spend so much money on the Defense Department and
will discover better ways to manage the problems.
The
troops begin to come home gradually over several months. This was the Nixon
VietNam strategy-declare victory and leave.
As
Americans on food stamps approach 50,000,000 next year, the American
government and most particularly the bankrupt states cannot afford to keep
paying unemployment checks and related benefits. We noticed last week that
one state is posting armed guards at unemployment offices as those folks
prepare to cut-off the checks. They are expecting violence and I think
they are correct. U.S. jobless is 24% going to 35%.
Immigration
problems are spreading and violence is increasing. Watch Arizona and southern
California for stand-offs between USA citizens and both legal and illegal
immigrants. The American southwest has millions of guns and the Sheeple are
getting super angry faster. We think the federal government should immediately
order two full divisions of troops to guard the border and cool the hot
tempers. They won’t do it as it would admit policy defeat and interfere
with new immigrants’ votes for the administration. This dust-up is
now in the 9th Circuit Court in San Francisco. The outcome will be against
the State of Arizona. Arizona State and local police are unfairly caught in
the middle. This turns ugly as citizens take charge and do what they think
they must.
Mexico
is going dangerous at a furious pace. When a nation calls out the troops in
large numbers to do daily battle, it can only end badly. Marxism is spreading
quickly throughout South America. Brazil has just elected a former Marxist
and guerilla fighter. Hugo Chavez continues to nationalize and steal from his
people. Iran is helping Chavez and between them both they are providing arms
and criminal support to Mexico bad boyz and perhaps Nicaragua.
I
can foresee, that if this is permitted to continue and spread while the
current US administration does nothing, the entire USA Southwest goes under
siege. It could turn very violent.
One
of the larger wet blankets on America and other economies will be massive,
hard-core inflation.
Most still think we are in a deflation with no inflation. Food and energy are
always the first to inflate and they are running at +9% and moving-up faster.
Soon many other parts of the U.S. economy inflate on a sinking U.S. Dollar.
We already have a tightening noose on capital controls. Expect this to get
worse. Next we’ll see price controls, which are most familiar in war
time.
Since
we are fighting two undeclared wars in Iraq and Afghanistan, those are merely
designated “police actions” like the 1950’s skirmish in
Korea. The declared war is the “War on Terror.” This one
is easy to designate and discuss as the enemies are largely
unidentified-fighting shadows. We have rogue nations, and enemy nations but
this war is illusory at best. This keeps the defense industry busy and rich.
In
light of the November QE2 announcement by the FOMC, we now forecast a new
technical US Dollar intermediate low to be 64.00 on the index. The
normal number is 80.00, which has been the standard for years. The dollar
formerly and briefly blipped under 70.00 but recovered quickly. Not now.
We
will first see growing inflation that turns in a vicious hyperinflation
within 24 months or less.
We think the first real scare of this arrives in the fall of 2011. In 2012,
it shall hit the world with a vengeance as the U.S. Dollar is both the
standard of the world and represents 85% of the world’s currency
reserves. This is a game changer. Eventually, the dollar sinks to 46.00-40.00
on the index; effectively cutting its value in half from earlier in 2010.
(Read “When Money Dies” by Adam Fergusson) This
book is the best we’ve seen on Hyperinflation in Germany,
Austria, and Hungary after WW I.
Expect
the despot rulers of Nigeria to be taken down in a citizen’s revolt in
2011. The citizens are tired of theft and corruption. Look for the new lady
leader of Brazil to go far left following in the footsteps of Hugo Chavez and
Fidel Castro. She is a former communist guerilla fighter. The largest new oil
field in the world is at stake in the ocean near that nation. Iran will be
making a move with other communists to seize it.
Stock
and bond markets are terribly over-valued. The shares will fall under their
own non-supportive weight. Insiders have been selling out for months as fast
as they can and see the forthcoming crash. With new QE2 announcements we see
the FOMC on the path to certain systemic destruction.
We
have been saying for years… this is all they have left-printing bonds,
bills, notes and dollars with no asset backing whatsoever. Foreign
holders of this paper are exiting these trades as fast as humanly possibly.
China has a five year plan to be out but will not make it in time. They are
converting this US originated paper to hard assets world-wide.
Copper
has been pushing the limits of the recent $4.00 futures high. With China
pressuring to buy more and needing so much more for development projects,
electronics, power equipment and others, watch for the March, 2011, copper
futures high to be broken moving the price to above $6.00 next year. Copper
is inflation sensitive.
Pensioners
and those older Americans on fixed incomes will be largely, economically
destroyed in the forthcoming inflation. New GOP House members will be in open
warfare with Obama and his democratically controlled senate. Obama is a one
term president going out in disgrace as one of the worst ever to hold the job.
His is an event worse than Jimmy Carter and Woodrow Wilson. May we live
in interesting times so be prepared.
The
next fall rally in gold and silver should commence after Thanksgiving. From
the signals we see, this rally could be absolutely outstanding. Try your best
to own physical gold and silver and trade the shares of the related
companies. The next larger-faster phase of commodities trading can continue
for another 7 years based upon previous historical cycles.
Now,
more than ever, it is important to take the immediate necessary precautions
to protect yourself and your families and friends. Traders and investors
should be buying precious metals and select shares right now. In our Trader
Tracks Newsletter we have a great list of trading and investing ideas for
you. Meanwhile, you can never go wrong buying physical precious metals and
holding them for security. We’ve had a constant run of nearly ten years
with gold rising 15% per year so this remains a good trade. In the last twelve
months, gold has rallied over 34% and is going ever faster.
It’s
not going to stop any time soon. In fact, we predict those annual percentages
will rise even more and this offers a chance, arriving only once in 25 years
on the historical cycles.
Roger Wiegand
www.webeatthestreet.com
Roger
Wiegand is Editor of Trader
Tracks Newsletter and of
the Rog Blog at www.webeatthestreet.com.
Roger provides recommendations for short and longer term trading using
stocks, futures and commodities with specifics.
Contact Claudio Bassi, at Trader
Track’s New York City publishing offices for a trial subscription. Call 718-457-1426 Monday
through Friday,
9:30am to 5pm or, e-mail cbassi@miningstocks.com
Recommendations
made in “Trader Tracks” are exclusively those of Roger Wiegand
and the publication is also exclusively the editorial content provided by
Roger Wiegand. TAYLOR HARD MONEY ADVISORS, INC. (THMA) LOCATED AT 33-42
61ST STREET, WOODSIDE, N.Y. 11377, ASSISTS IN THE MARKETING OF “TRADER TRACKS.”
However, the views expressed in Trader Tracks do not necessarily reflect
those of THMA (Website: www.miningstocks.com). Because individual investment
objectives vary, this summary of investments should not be construed as
advice to meet the needs of any particular reader or subscriber. Opinions
expressed in Trader Tracks are statements of judgment expressed at the date
and time they were written, and as such, are subject to change without
notice. Roger Wiegand is not a CFA nor an investment advisor, but a private
individual who studies the markets extensively and offers summary opinions.
Before any type of investment is made, you should always seek advice from
your attorney, CPA, registered broker, or financial advisor. There is
considerable risk in market speculation and investing. There are no
guarantees regarding performance and past performance provides no guarantee
of future performance. Your trading accounts are always subject to the
potential for severe or total losses. This service will involve SPECIAL
EMAIL ALERT TRADING RECOMMENDATIONS PROVIDED AT ANY TIME Roger Wiegand
believes it is opportune to trade either in or out of the market in question.
AS SUCH, THIS SERVICE WILL BE CONSIDERED A PREMIUM SERVICE. The
management of THMA, Inc. does not anticipate trading in the securities
recommended in Trader Tracks. No statement or expression of any opinion
expressed herein constitutes an offer to buy or sell the securities mentioned
herein. Trading futures contracts may not be suitable for all investors. You
may lose a substantial amount of money in a very short period of time. The
amount you may lose is potentially unlimited and can exceed the amount you
originally deposit with your broker. This is because trading futures is
highly leveraged, with a relatively small amount of money used to establish a
position in assets having a much greater value. If you are uncomfortable with
this level of risk, you should not trade futures contracts. If you need a
broker, contact mine, Ryan Olson, Managing Partner, Jackson-Olson commodities
at 800-352-5228 or by e-mail rolson@jacksonolson.com Contact Jackson-Olson
Commodities, LLC, 5510 Abrams Road, Suite# 101, Dallas, Texas 75214. Local
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