|
Gold's been going up and the Dow has been dropping
for months now. If this persists for more than maybe two more months, it can
spell utter doom for global equities markets - and will cause a huge explosion in precious metals prices
and shares.
The danger of a Dow-Gold divergence lies not so much
in the divergence itself, as it does in question of which one of them is
winning their perpetual tug of war. Right now, gold is the undisputed winner,
and the Dow's losses will only get worse over time.
 
That, in turn, can mean disaster for the world's
retail investors.
As one would expect, this is extremely dangerous for
the world's major equities markets Most of them take their cues from the US markets for the simple reason that the US markets
dwarf those of every other country by their sheer size and depth. Not
coincidentally, the other major stock markets are showing very similar
trends:
Even the Indian BSE Sensex has started to turn
sharply down in January. If this persists - as it must and will - Indians
will regret the day they began to trust paper more than gold - and sold their
inheritance for empty promises.
In the past, the fiat-forces of the world have been
very diligent and successful in making sure that gold would never rise in the
face of a falling Dow for any length of time. It seems they have lost their
power. Why that is so is not hard to understand if you watch them flailing
helplessly in the quicksand of their own CDO-spawns.
Periods of divergence during which the Dow rose
while gold fell were of course not only tolerated, but encouraged. In fact,
those used to be the rule - until about March of 2003 when gold joined the
Dow on its mammoth recovery trip from the intermediate double bottom reached
in 2002 and 2003, as we noted in a series of articles back in 2004.
The next Dow-bottom will plumb depths not seen
since the early 1990's, maybe even the 1980's!
Employment figures, the Thornburg collapse, Carlysle
Group troubles, sky-high oil prices, rampant inflation, the dollar-crash, and
neverending Fed bailouts of fast failing super banks are pounding the stake
deeper and deeper into the global debt-vampire's heart. He will find his
much-deserved rest before long. Unfortunately, the portfolios of careless and
gullible retail investors, consisting largely of Dracula's debt-spawn, will
die along with their master.
The consequences of this development for the price
of gold and silver (also discussed in previous articles) are only too
evident. Readers may find this overly optimistic, but gold can easily go past
$3,000 per ounce this year.
When money (or whatever goes for it these days)
comes flowing out of losing stocks in such quantities as will soon emerge, it
usually starts looking for some place to go. There will not be many places
for it to go outside of the precious metals complex, even as other
commodities suffer from the attendant US and global economic downturns.
It'll be most interesting to see how long it takes retail investors to figure
this out.
It won't be pretty, so better get ready!
If anyone still has money in any stocks or mutual
funds, it's time to exit. The sooner the better, because
the longer people wait, the less they get for their paper.
And then, guess where they are going to put it?
Got gold?
Alex Wallenwein
Editor,
Publisher
www.Small-Business-Goldmine.com
www.Attorney-Local.com
www.Expert-Legal-Research.com
Economic and Monetary Analysis
from the "Free Side"
Investing is like driving a car. If you can't see where you're going,
you will crash. The RonPaulonomist
works like a golden windshield wiper on your investment outlook. Don't drive
your 'car' without it!
What do you do when all your investments are doing great, when you
have a high-paying job or successful business, but the dollars you earn are
dropping and dropping in value? The euro continues to beat the tar out of the
dollar (and your pocketbook) and there is no end in sight. How will this
affect your money, your job/business, your retirement, and your kids'
education? You owe it to yourself, your family, and your future to find out.
Find out NOW - Free Report: 64735@currencywar.ez-optin.com
Copyright © 2003-2007 Alex Wallenwein
| 
