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Each year around this time, we review
our forecasts and projections for economics, politics, the markets, and other
kinds of relevant information that can affect our trading and investing. For
those who have not followed us in the early years of Trader Tracks
Newsletter or on the radio, we take this opportunity to express where we
have been and where we are going.
We waited until after the presidential
elections had wrapped-up and the next president had been named before posting
these additional ideas. Had Romney been elected, some things would have been
slightly different, but not markedly so.
We did predict Barrack Obama would be
elected and that is exactly what’s happened. The important question is:
what can we learn from this past decade and what might occur in the following
years from 2013-2016?
We predicted Barrack Obama would be
re-elected and would not finish his second term due to a nervous breakdown
from pressures of this high office and/or be driven to resign regarding a
scandal involving a woman.
Based upon new information, we can
add a third prediction. Obama will not be able to contain the debt
crisis. With his stubborn agenda of “tax and spend”, he will make
the messes increase even sooner. This speeds up the debt crisis, cracking the
USA and global bond markets and setting off a series of other nasty problems.
Most of these negatives were baked into the economic cake anyway, but his
agenda will just speed them up and create a smash earlier than otherwise.
While it’s too early to tell, we
think the Petraeus resignation scandal is tied to the potential of a
Petraeus’ obligation to testify regarding the growing Libyan attacks
misinformation scandal and alleged lying. Keep in mind the Nixon impeachment
resignation was based on lying and a cover-up. We can see the same thing
developing with the current administration in forthcoming congressional
hearings. If this happens, our 2012 forecast for the president might be
coming true.
With the president’s agenda being
one of “tax and spend”, the Fiscal Cliff will get a
Band-Aid repair and it will not hold up. The debt crisis is spreading all
over Asia with China sinking faster than before. On Bloomberg Asia, it
was just announced tonight that Japan’s GDP has gone negative at the
rate of -3.5%. This is really scary as deflation news and falling stocks
of major Japanese companies is now spreading quickly and is, in our view, now
going out of control.
As bad as this is, Europe is failing
even faster. The big boys (France, the U.K. and Germany) are joining Greece,
Portugal, Italy, and Spain’s failures in 2013. These big boys are
entering even deeper depressions. Germany is now in recession (not
depression) but how long can they hold on?
In 1999 we predicted a stock market
crash and we were correct when the Nasdaq had a major selling event.
Greenspan propped up the other markets, but they should have otherwise been
wrecked like the Nasdaq. This just delayed the markets’ crash until
2008 when it was artificially repaired with taxpayer cash despite banker
insolvency.
In 2003, we predicted that the Euro
Currency and Euro-Land experiment attempting to produce a United States of
Europe, would fail. It took longer than we expected but we were correct. The
Euro currency is economically swirling the drain. So far, Greece, Ireland and
Iceland have caved. Lots more will fail very soon.
In 2004 we predicted our best trade ever
in this decade when the Swiss Franc rallied from 55 on the Index to 89
providing a gain of $39,000 on one contract for the price of putting up
modest margin money and paying regular broker commissions. That was the best
single trade we’ve been able to find in ten years. More fantastic
trades will present themselves as markets cave to places not expected.
In June of 2005 we predicted a massive
housing crash as lumber futures took a dive in tandem with the messes we saw
building in financial derivatives. We were correct as builders, brokers,
title companies, banks and other lenders went broke. Only the big boy banks
were saved, as they own the Federal Reserve. They replenished themselves with
taxpayer cash and will do it again.
Before the 2008 markets’ smash,
leading up to it for several months, we predicted a severe markets’
dislocation. That wreckage was so bad it nearly took down the world economies
and perhaps some governments. The re-capitalization with taxpayer money was a
temporary repair. The worst is yet to come and this time there is no way out.
We predicted the tops, bottoms and some
intermediate support and resistance prices in the silver market from $26.50
to $49.00 and back again. We are working on similar trades in grain, precious
metals and energy.
From November 12 Through December 31,
2012 We Predict:
President Obama will sign a flurry of
executive orders enhancing new, onerous and bureaucratic controls enabling
the EPA to further his green agenda and curtail the so-called carbon energy
products. This wastes billions of taxpayer funds and further destroys carbon
energy, driving carbon energy prices ever higher. The USA is headed for $5
per gallon of gas and Europe already has nearly $10 per gallon in some
places. It’s going to get a lot worse but this won’t last more
then 2-3 years as we will get a hyperinflationary blow-off.
A trio of very negative executive orders
might be signed giving the UN more and very expansive powers over American
citizens. Those could be (1) new global taxes on the Internet, (2) global gun
control including the United States and (3) new taxes on all financial
transactions worldwide to steal money to further the United Nations One
World Order agenda. Eventually, after the World War, the UN will be
permanently destroyed and with it the nightmare of the One World Order.
The Fiscal Cliff situation will go to a
scary stand off and then be addressed with an executive order to extend the
Bush Tax cuts temporarily for one year or less. Option two would be the
Speaker of the House caving in to presidential pressures offering new taxes
on incomes of $250,000+ and none on those with lesser incomes. The lesser
incomes would get more taxes anyway, but they will be stealth taxes buried in
other unrelated legislation.
The global stock markets will suffer a
10-12% correction in Q-1 2013 but not a crash. The harder crash is more
likely to come in May 2013 or September-October 2013. The so-called Big
One could take down stocks 50-90%. A -90% wipeout would not be unheard
of… it has happened before.
The US Dollar will rise to at least
Index 84.50 and perhaps to 88.50 in 2013 as the Euro skids first down to
120.00 major support and then falls further to 115.50 after a few weeks at
the 120.00 level. The Euro Currency will collapse when Germany starts trading
their old Deutsche Mark in parallel alongside the Euro. Lower Euro supports
are 112.50, 110.00, 108.00 and then 80.00. If it gets below 108.00, we think
the Euro is toast.
Inflation will gradually build in early
2013 and then race ever faster. Food prices will rise
+50% in 2013 on agricultural shortages by farmers, but mostly on a sinking US
Dollar and war.
A conflict will breakout in the Middle
East between Israel and several of her neighboring nations. Oil prices will
skyrocket. We do not see nuclear war in the Middle East but rather widespread
violence using heavy weapons, drones, missiles and bunker-busting mammoth
bombs.
This conflict, if unchecked, could go
right to the front door of Saudi Arabia. Should this occur, there would be a
wider war involving the USA to protect Saudi oil fields. The Straits of
Hormuz will be mined by Iran, which will slow oil tanker shipments. The US
Navy will clear the waters by using minesweepers. We can see 5-10 Middle
Eastern nations all fighting in unison in this conflict with a great loss of
life.
President Obama is not skilled in the
art of running a war and the USA generals will take over some decision-making
authority into their own hands creating an outrage in the Congress and the
Senate. These actions will be hidden at first but later come into the news
based upon the military who have taken precautions protecting America and her
citizens. This could further add to Obama’s resignation from the Presidency.
On the streets in America next year,
expect a long hot summer of joblessness, urban rioting, violence and a major
crime wave from the unemployed. The larger worry for authorities is the
amount of guns in the streets including stolen heavy weapons from National
Guard armories. Some years ago a rail freight car of 10,000 .22 automatic
rifles was hijacked near the Mexican border. These were destined for sale to
a major department store chain. Who has them? Who knows? The stocks and
company sales of two major handgun manufacturers were reported up nearly 10%
last week on stronger demand/sales. Consumers are getting worried about
security.
The current depression could last until
2017 or even 2024 depending upon wars and political cycles. There was a nasty
depression in the USA in 1842-1843. This was the beginning of several decades
of markets mayhem including the American Civil War and a series of rolling
recessions/depressions lasting until 1896. The worst of the market
dislocations ran from 1873 to 1896, a nearly 20-year depression. Some say
there were intermittent recoveries but we say they did not amount to much.
Those were very bad years in the United States. We see the same stuff
repeating all over again in this cycle.
The worst of the worst, in our opinion, will
hit us in 2013 to 2016 with depression and world war. This is not end of the
world stuff but a really ugly historical re-run. The so-called Mayan event
next month on December 21, 2012 is not a world-ender, but a new and better
beginning…however, the following three years will be a severe
adjustment period.
The Obama administration and other world
leaders are at the end of their fiscal rope. They are simply out of tools and
ideas to extend and pretend any longer. The early gasps and rasping breathes
from the bigger bond markets are coming down right now in Japan. The bond
markets are skidding ever faster and 2013 will usher in higher interest rates
breaking the central bankers. Even a one or two percent bond yield increase
will crush these nations as the debt burden skyrockets on the outstanding
paper.
Watch for the rating agencies like
Moody’s and Fitch to begin a series of rolling downgrades further
smashing these bankers. The USA will get a new debt downgrade in 2013. Their
own little print and spend games will turn on them, wrecking hundreds of
banks over the next three years.
Oh, what to do?
Smart investors and traders are moving
toward almost all hard assets. We have been against buying and owning any
real estate since 2005. Now is the time to buy a house or a farm if you need
a place to live and prefer not to rent. In our view, the price bottom has
been reached to obtain a cheap interest rate for a mortgage. In some places
throughout the USA house prices have supported.
If you are a home buyer you had better
take extra careful precautions on anything you purchase. Numerous banks,
insurance companies and title companies are at severe risk. We would not
encourage government insured mortgages, second mortgages, or any dealings
with small fry companies that might be unable to continue in business.
Ideally a home could be bought with the
seller carrying the mortgage for on-going income and your exposure to
outsider lenders and others would then be greatly reduced.
We are also expecting that in more government
grasping for tax dollars, homeowners will lose the mortgage interest
deduction on tax returns.
Even worse, we expect corporate
pensions, 401k’s, Roth pension plans and other
saving devices to be converted to USA government paper. This not only
diminishes their value, but could render them valueless in the future.
We cannot see buying into new stock
positions unless they are shorts during the first two weeks of November 2012.
If you own stocks, use risk stops on bigger companies and
take profits or hold on with juniors, knowing they should sell and
then bounce back.
Somebody please tell us when the global
bond markets crash for good and we’ll tell you when this can get better
and we can start all over again, maybe with a partially backed fiat gold
currency.
Roger Wiegand
www.webeatthestreet.com
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
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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
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past performance provides no guarantee of future performance. Your trading
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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 Telephone is 214-691-8600. Fax
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