The Shift from Bonds to Stocks
PIMCO lost the mantle of the largest fund as capital withdrawals reached $38 billion this year as money moves to equities. The largest fund is now Vanguard. This is part of the cycle shift. While there is likely coming a near-term correction, everything is still pointing to capital flight from bonds and banks into equities. If you are European, who have to be crazy not to buy the US share market given the value of the Euro, the pending bail-ins, and the proposed IMF confiscation of 10% of all deposits to pay for the failed Euro and banks. This is the same shift we saw in the 1929 bull market.
Gold the Real Breakout
QUESTION: Martin
Did you imply that a gold bull market really only begins when gold exceeds its 1980 high adjusted for inflation? That would imply that eventually gold outperforms inflation which I do not think it does. Adjusting for currencies and inflation gold would need to about double from here to reach that level. If it ever reached that level wouldn’t that be a sell zone rather than expecting a breakout?
D
ANSWER: Gold indeed is not linear so it will not track inflation because it is a commodity. This results in bursts of price movement that amounts to catch-ups that get everyone excited assuming it will last forever and it never does as is the case with any commodity. We ran these charts to demonstrate that gold was in a bear market and that it was really declining in a basket of currencies in the 1980s and early 1990s.
What we do see is that gold will eventually exceed the 1980 high in real terms but probably on the third try and not the second. This is just a trading pattern as was the case with the Dow Jones trying to get through the 1,000 level where it was the 4th time that became the charm (1966, 1968, 1973, 1983) . So yes, gold will be a selling opportunity on the next rally that will exceed the 2011 high nominally and test the 1980 high in real terms. Then there will be another correction, and most likely the third rally will be the breakout.
Gold is important to watch because it will signal the real break in public confidence since the Goldbugs will be discredited and the majority will see them as always wrong and will fight the gold rally. That is the REAL fuel necessary to see it rise dramatically. It has absolutely nothing to do with fiat, hyperinflation, Fed balance sheet, or missing gold from Fort Knox.
Coming ECM Book & 64 Year Gold Cycle
QUESTION: Dear Mr. Martin Armstrong:
I´m writing to you from Santiago of Chile, to congratulate you for your amazing research, about the Economic Confidence Model and to ask you:
1. What is the correct model to predict the uptrends and downtrends of the Spot Gold Index?.
2.- What are the main differences between the E.C.M. and the 64-Year Cycle Wave?.
3.- How can I learn more about the E.C.M. and the 64-Year Cycle Wave, to be a star/master trader?.
I look forward to hearing from you as soon as possible.
Sincerely,
JEMV.
ANSWER: Each item be it commodity, stock, bond, or real estate, has its own cycle. The significance of the ECM is significant. It is the GLOBAL composite frequency or the cycle of life. What becomes clear is that people will change direction every 4.3 years. They shift their focus from one sector to another and nations. The question becomes what line-up with the ECM will get the attention. Her is our 64 year cycle in gold. The two turning points were 1934 (FDR’s confiscation) and 1998 the low in real terms for gold. Because gold has been “money” during this wave, it responds in the opposite direction of an investment. Inflation means down and deflation means up for whatever is “money” at that time.
The new wave thus began with gold at its historic purchasing power low. The previous 64-Year Wave peaked in 1870 with the purchasing power high in gold. The gold rally that began in this wave formation was the first 13 years into 2011/2012 (intraday/closing). This is why we forecast a 2-3 year decline and the resumption of a bull wave. There will be a near-term high after 2016 but we are in the final stages of the last 2 waves of the ECM that peaks in 2032, These are the Phase Transition waves and we should see greater volatility. The next MAJORhigh for gold will be 2032. Ideally, gold should invert. This means the wave 2015.75 to 2020.05 followed by 2024.35 should produce a high in 2024 and then begin to line-up with the ECM. If that happens, then the major high will be 2032, a correction, and then the highest high in purchasing power terms will be 2062 but the dollar may not exist at that time to offer a currency in which to measure that high. We will deal with this issue in the upcoming Gold Report and a new book is coming out on the ECM next year.
Slovakia is Subject to EU Bail-Ins & IMF Seizures
QUESTION: Will Slovakia also enter into the Bail-in dilemma ? This since most of the Slovakian Banks were taken over by Austrian Banks…. AND as is clear Austria is now in a total financial mess. Slovenia is Kaput as said in German but what about Republic of Slovakia ?
ANSWER: Unfortunately, Slovakia is in the mix as well. The banks are linked to Austria and that is a mess. Then there is the 10% confiscation of all assets proposed by the IMF. So, be very careful what assets are held in the banking system.
Arafat was Politcaly Assassinated
Palestinian leader Yasser Arafat was actually poisoned in 2004 with radioactive polonium, his widow Suha has revealed. She received the results of Swiss forensic tests on her husband’s corpse. A team of experts, which also included Lausanne University Hospital’s Institute of Radiation Physics, last November took samples from Arafat’s body to seek evidence of alleged poisoning. It now appears that his death was a political assassination. What are the real ramifications of this action?
Global Market Watch is on the Princeton SIte
Why Snowden Should Stay in Russia
The West is never kind to whistleblowers.. The case of Mordechai Vanunu(also known as John Crossman) is one of the worst treatments of a person who sought to tell the truth about a government. He was a former Israeli nuclear technician who, exposed that Israel had weapons of mass destruction to the British press in 1986. He spent decades in prison, may not speak to any foreigner, and is barred from ever leaving Israel. So much for human rights.