Saturday, December 25, 2010


It's almost impossible to find anyone who is long term bearish on the stock market or economy at this time. In the recent Barron's poll every single analyst expected a rise in stock prices next year and continued economic expansion.
I think they are all going to be wrong, horribly wrong. I believe next year the stock market will begin the third leg down in the secular bear market. And the global economy will tip over into the next recession that will be much worse than the last one.

I've gone over the 3 year cycle in the dollar index many times. The dip down into the next 3 year cycle low this spring should drive the final leg up in gold's massive C-wave. What I haven't talked much about is what happens after the dollar bottoms.

I actually expect this three year cycle in the dollar to play out almost exactly like it did during the last three year cycle. When the dollar collapses this spring it will not only drive the price of gold to a final C-wave top, it will drive virtually all commodity prices through the roof, the most important being energy and to some extent food.

It was the sudden massive spike in energy that drove the global economy over the edge into recession in late `07 and early `08. The implosion of the credit markets just exacerbated the problem. You can see on the following chart just as soon as Bernanke drove the dollar below long term historical support (80) oil took off on its parabolic move to $147.


  1. when i voted for obama i wanted to see him put a end to all unequality in the world. He promised hope and change that he would stop rich people from controling poor people. but he has not done what he promised. He has not stopped wallstreet, banks, managers making to much money, spoiled people with benefits others dont have in most countries. Obama you failed the world you said to change. Long ago I wanted to become an army ranger lucky i didnt since i am not proud of my country any longer. I cant stand cause i cant stands no more, as popeye would say it. I want to see some riots people, get in streets and break property. throw rocks at rich cars, and throw fruits at rich white people.

    - Sam

  2. Ah yes;

    Back to Deflation now

  3. Hello,

    It seems you have suggested that the global economy will be dipping into a recession, and also that commodities will be rising through the roof; furthermore, is it possible that as the world's financial foundation is crumbling, the nation's which are commodity-rich, will be prospering by comparison to most other nations?

    Thank You,



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