Sunday, March 20, 2011

END GAME

For months and months I've been warning investors that the dollar was going to come under extreme pressure sometime this year. I expected it to probably happen in the spring. Many people thought I was nuts. They were sure it was the Euro that would collapse, despite the fact that the EU is doing everything they can to protect their currency while Bernanke is doing everything he can to destroy ours.

On Friday the last confirmation occurred to signal the final collapse is now underway. On Friday the November yearly cycle low was violated. Cyclically this event is a major catastrophe
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We are now going to see the dollar get absolutely hammered for the next couple of months. The viability of the dollar as a currency will be questioned. There is a decent chance it may start to lose its status as the world's reserve currency. (Coincidentally about the time everyone becomes convinced the dollar is going to hyper inflate that will be the point where the three year cycle low will bottom and we will see an explosive rally, along the same lines as what happened in the latter half `08.)

This is what all the top pickers in gold and silver fail to understand. They are all trying to call a top based on charts without any understanding of what is happening to the currency. 


In a currency collapse the market will flee into assets that will retain their purchasing power. Four weeks ago we went past the point of the stock market being able to protect one from Ben's printing press any longer. So buying stocks as protection is no longer a viable solution.


Four weeks ago spiking inflation rose to the point where profit margins are now being hit. Ben will no longer be able to prop up the stock market by further debasing of the currency. Stocks have now decoupled from their inverse correlation with the dollar and will now follow the dollar down. 


The more Ben prints and the faster the dollar collapses, the faster the stock market is going to fall...and the quicker the economy is going to roll over into the next recession.

What will happen is that liquidity will rush into the commodity markets as the only true protection against the accelerating currency crisis.

This is why one has to ignore the top pickers and chartists. Overbought oscillators and stretched conditions are meaningless in a currency collapse. This is all about fundamentals. It's about protecting your purchasing power. You can't do that by exiting the one sector fundamentally best suited to protect you during this storm, which are the precious metals.

Now isn't the time to be selling your gold, silver or mining stocks, it's time to be buying more.

  
For the next couple of days I am going to run a special on the 6 month subscription at $20 off the normal price. 

6 months should be long enough to get investors through the currency crisis, allow you to ride the final parabolic spike in gold and silver (C-wave finale), avoid the inevitable crash (D-wave correction) that always follows a parabolic move, and then get long again at the bottom in preparation for the next major wave up in gold.

Click here to access the premium website, then scroll down and click on the subscribe link. Enter '6monthspecial' in the promotional code box and then click 'continue'.  You will be linked to a page with the special offer.

23 comments:

  1. Gary, thanks a lot for your insights on these markets. Most of your predictions are amazingly accurate.

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  2. I have no doubt that history is being made as we witness these events unfolding before our very eyes.. with remarkable precision.

    Your T.A. is excellent and in this environment its easy to lose your head.
    Again.. much gratitude to you sir.
    Outstanding work.

    From all of your blogs there appears to be no way out for the USD and stocks in their eventual rollover. Which I concur with.
    Do you have a "Black Swan" event that implies all bets are off for the USD to rally (other than the low to be put in the 3yr cycle bottom).
    AND...do you also have a possible scenario for the extended cycle in stocks. If for example the debt ceiling needs to be increased and the Fed. goes to QE III. All things being equal ...the US Treasury is in desperate need of continued funding (through debt issuance above existing limits). Austerity measures are not politically digestable/adequate. Ongoing debasement almost guaranteed. With the ongoing "End Game" for the USD being a more drawn out process.

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  3. pls check your 6monthspecial subscription link.... not able to subscribe.

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  4. List,
    The link seems to be working right now. I've had multiple people use it to take advantage of the 6 month offer. Must be something on your side.

    Try again and if it still doesn't work email me at garysavage@cox.net and I will run it manually for you.

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  5. Liquid,
    Trust me at the bottom of the three year cycle low with the dollar hovering on the brink of the abyss and in jeopardy of losing its reserve currency status Ben will be forced to shut down the presses whether he wants to or not.

    Then we will see the dollar explode out of the three year cycle low just like it always does and usher in the next deflationary period. That will correspond to the next leg down in the secular bear market for stocks and the next recession.

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  6. Gary,

    So you believe that stocks will drop along with the dollar in the near term (while gold / silver rise), and then stocks will continue their decline when the dollar rallies (and as the D wave correction in gold takes place)... did I understand correctly?

    Thanks for your insight.

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  7. Yes once this counter trend rally in stocks runs it's course then I think stocks will continue lower while gold finishes it's C-wave finale.

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  8. Toby,
    Yes I see the point..and your analysis supports it very well on a short term basis....but I firmly still believe Bernanke is the ultimate anti deflationist....after all QEI & II were all about saving stocks to encourage the wealth effect. The side effects being inflation via food and commodity prices.
    The USD may have the rally out of the low for several months(supported by TA), but will resume its downward spiral with a hyperinflationary scenario a real possibility.
    The Fed is almost check mated..
    -doesn't have room to move on rates without bankrupting the government.
    -Without printing by the Fed, the govt. will implement any number of fiscal measures - taxes, spending, cutting bureaucratic staff and govt. employees and entitlements (something's gotta give). Undeniable ..but very unpalatable.
    -Unemployment and housing and unfunded liabilities are a mess.
    -A growing worldwide distaste for paper currencies, capitalism and the international monetary system.

    The USA is going to be a very tough place to live in over the next 5-10 years unless the FED and Govt. come up with something extraordinary. I'm not holding my breath.

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  9. Like your previous email,pls check your 6monthspecial subscription link.... not able to subscribe.

    Something seems to wrong with this link...keeps on repeating subscription page and won't allow me to proceed to email verification

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  10. Glenn,
    Email me at garysavage@cox.net and I'll walk you through it.

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  11. Gary,
    I know it may somehow relate to John T. but I'm wondering why you wouldn't want your name associated with the articles that show up in places like Kitco. I would think this would gain your more visibility as well as reduce the need to maintain 2 blogs. Don't get me wrong, from a selfish perspective I'm happy for you to fly below the radar for as long as possible. Though it seems like the big cycles are "immune" from human intervention, I'm not sure that smart money might not try, once they get wise, to affect the shorter cycles to throw us all off - or maybe I'm just paranoid :)

    Thanks for all you do. I'm so thankful to John for steering me in your direction.

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  12. Gary,

    Yes take your point.
    But...hard to accept that The Fed will stop doing what has come naturally for them...debasing.
    Bernanke is the epitome of anti deflationism. Keep assets inflated...(sure prices go up too which we are seeing through food and commodities)..use the wealth effect and hope like hell it ignites the economy.
    Your TA supports the short term USD / GOLD/ S & P adjustments.
    Going out further is the concern.
    Difficult to time these events as well. But invariably you have the direction and content correct.
    Again ...invaluable forsesight.

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  13. Hey Gary I follow you from Europe and i like your projections, but what do you think about the euro and gold.
    i mean i can only buy and trade physical gold in euro and now with the dollar in the basement, the euro could get stronger if debts in portugal and other citic states remain stable.
    so do you think that gold will also outerperform the euro in the race to kill the dollar.... i mean until the dollar rallies back?

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  14. I would stick with silver. That way the price appreciation will stay ahead of currency gains.

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  15. This article is absolute nonsense.....we have all heard this collapse story for many many years now but it never happens and won't ! Anybody wanna bet ?????

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  16. Sure I'll bet. I already am as a matter of fact. It's why I've been long precious metals for two years now and already made a small fortune.

    The dollar has been collapsing for 10 years now. Why do you think the price of gold is $1400?

    Gold is real money. Priced against something real the dollar has already collapsed. Now it is going to collapse against other worthless paper currencies.

    As much as you and the Fed would like to believe magic just doesn't work in the real world. If you print several trillion dollars out of thin air bad things are going to happen to the currency.

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  17. This comment has been removed by the author.

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  18. What now?

    Stocks up,oil up, gold up, dollar up

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  19. What now?

    Stocks up, oil up, gold up, dollar up

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  20. Toby, can you please remove my first post signed enes.Thanks

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  21. Sarcastically long here. SLW.... Mmmm my favorite!

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  22. I'm very new here and hold bullion (not ETFs). Can Gary's strategy work with holding metal?

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  23. Gary's strategy will work very well with physical gold and silver. You'll be able to sell near the top and buy back in much cheaper, or buy insurance at the top to protect your portfolio value during the D wave decline.

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