In this sort of scenario, the inflation hedges will sniff it out first. So I would expect the precious metals to bottom well before everything else does. In fact, we could be looking at a situation where the metals and their shares rebound sharply while the U.S. equity markets continue to decline. This could last many months. I want to point out that the GDX bottomed in October 2008 and was up 100% before the S&P 500 bottomed in March 2009. So over a five month period the GDX doubled while the SPX declined 25%. Don’t think that can happen again?”
The Trend we have been predicting all year long is happening right now!
All year long we have been predicting that the FED wanted the markets to fall, specifically gold, silver, and oil. The precious metals because they are an inflation warning, and oil because it spreads price inflation to all areas of the economy. However, we said that any dips in the precious metals or mining shares should be treated as gifts as we knew the money printing was just around the corner.
We know for certain (100%) that the Federal Reserve (FED) has to print to keep the illusion of a recovery going and the Federal Government (The Beast) has to borrow in order to keep the government handouts going to pretend that we are on the road to recovery in an election year.
So for us, this entire market downturn and all these FED statements about no more QE is just one big FED head fake. We have been calling their bluff throughout the entire year and we believe we are weeks or even possibly days from being vindicated.
In our opinion, QE is IMMINENT!!!
The market is down 275 points today on ugly unemployment data; however, gold is surging right now as the smart money knows what we do, the big print is coming! One of the key indicators for us is that silver is also up with gold, if this was just a fear trade, gold would be up and silver would be down due to its industrial uses. Yet the smart money knows that a major devaluation of the U.S. dollar is about to happen this year!
Our Thoughts on the Unemployment Numbers Released This Morning
Despite shrinking the workforce to 1980 levels and having the birth death model create 204,000 jobs, yes that’s right, today’s BLS report stated that their guessing model of how many jobs could have been created was over 200,000 for the month of May. This is the same model that created jobs throughout 2008 and 2009 only to finally be revised down by millions years later. In the end, today’s numbers still came out ugly as there is NO driver for jobs and the baby boomer demographics are beginning to effect the consumer driven economy.
Gallup, who polls Presidential races and is usually off by about 1%, has the real unemployment rate around 19%. Who are we to believe, the BLS or a private company that gets paid and makes a profit for being accurate?
Gold Stocks SURGE as Market Collapses
Right now even though there is a huge sell off in the stock market, Gold stocks are up BIG! NEM, for example, is up 8% as we speak.
This weekend we will be researching to bring you a gold company that has been beaten up lately (along with ALL gold stocks) that we think may have significant upside potential.
Don’t feel like you are the only one, NOT one person in the mining sector is a winner, even the big guys have been trading like shit!
It is important to know the trends and the end game, otherwise you will get shaken out by the FED’s deception and market manipulation.
Please read this quote below from our good friend Mike Krieger, if you get this you will understand why the opportunity in 2012 is greater than it has ever been for gold investors, especially those in mining shares as the mining shares have been beaten down hard all year. Even the biggest producers in the world are down nearly 50% in the past year.
“If I am correct, and the U.S. economy itself is now in the early stages of what will probably turn into a serious economic slowdown, then it will not be easily stopped with incremental Central Bank policies. The fact that they have waited this long and the fact that the global economy is in the midst of a serious slowdown tells me one thing. They are way behind the curve and by the time they realize this it will be too late to stem the momentum. That said, I do expect them to respond and the fact that things will have gotten much worse than they expected will mean a major response. I’m not talking operation twist part deux. I mean a serious print. Potentially the BIG ONE.
-Economist Mike Krieger of LibertyBlitzKrieg.com–
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