Best of the Week
Most Popular
1.Crude Oil Price Trend Forecast 2016 Implications for Stock Market - Nadeem_Walayat
2.Odds of Winning Walkers Crisps Spell & Go olidays K, C and D Letters - Sami_Walayat
3.Massive Silver Price Rally During The Coming US Dollar Collapse - Hubert_Moolman
4.Pope Francis Calls For Worldwide Communist Government - Jeff_Berwick
5.EU Referendum Opinion Polls Neck and Neck Despite Operation Fear, Support BrExit Campaign - Nadeem_Walayat
6.David Morgan: There Will Soon Be a Run to Gold Like You've Never Seen Before - Mike Gleason
7.British Pound Soars on BrExit Hopes Despite Remain Establishment Fear Mongering - Nadeem_Walayat
8.Gold Price Possible $200 Rally - Bob_Loukas
9.The Federal Reserve is Not Going To Raise Interest Rates and Destroy Gold - Michael_Swanson
10.Silver Miners’ Q1’ 2016 Fundamentals - Zeal_LLC
Free Silver
Last 7 days
It Feels Like Inflation - 26th May 16
Negative Interest Rates Set to Propel the Dow Jones to the Stratosphere? - 26th May 16
S&P Significant Low has Occurred – Not Likely! - 26th May 16
Statistics for Funeral Planning in UK Grave - 26th May 16
Think Beyond Oil And Gold: Interview With Mike 'Mish' Shedlock - 26th May 16
Hard Times and False Mainstream Media Narratives - 26th May 16
Will The Swiss Guarantee 75,000 CHF For Every Family? - 26th May 16
Is There A Stocks Bear Market in Progress? - 26th May 16
Billionaires Are Wrong on Gold - 26th May 16
How NOT to Invest in the Gold Market - 26th May 16
The Black Swan Spotter...Which Saw the Oil-Crash coming; now says the “Invisible Hand” will push Brent to $85 by Christmas - 26th May 16
U.S. Household Debt Still Below 2008 Peak - 25th May 16
Brexit: Wrong Discussion, Wrong People, Wrong Arguments - 25th May 16
SPX is at Strong Resistance - 25th May 16
US Dollar, Back From the Grave? - 25th May 16
Gold : Just the Facts Ma’am - 25th May 16
The Worst Urban Crisis in History Could be Upon Us - 24th May 16
Death Crosses Across The Board Are IRREFUTABLE Stock Market Sell Signals - 24th May 16
Bitcoin Trading Alert: Bitcoin Price Stays below $450 - 24th May 16
Stock Market Crash Death Cross Doom Prevails - 23rd May 16
Did AMAT Chirp? Implications for the Economy and Gold - 23rd May 16
Stocks Extended Their Rebound On Friday - Will They Continue Higher? - 23rd May 16
UK Treasury Propaganda Warns of 3.6% Brexit Recession, the £64 Billion Question? - 23rd May 16
Stock Market Support Breached, But Not Broken! - 23rd May 16
George Osborne Warns of 18% Cheaper House Prices - BrExit for First Time Buyers - 22nd May 16
Gold Bull-Phase I Continues to Confound (The Trek to “Known Values”) - 22nd May 16 r
Avoiding a War in Space - 22nd May 16
Will Venezuela Be Forced to Embrace the US Dollar? - 21st May 16
Danish Central Bank Stumbles with Its Currency Peg to the Euro - 21st May 16
SPX Downtrend Underway - 21st May 16
George Osborne Warns of More Affordable UK Housing Market if BrExit Happens - 21st May 16
Gold And Silver 11th Hour: Globalists 10 v People 0 - 21st May 16
David Morgan: There Will Soon Be a Run to Gold Like You've Never Seen Before - 21st May 16
Gold Stocks Following Bull Analogs - 20th May 16
The Gold Chart That Has Central Banks Extremely Worried - 20th May 16
Silver Miners’ Q1’ 2016 Fundamentals - 20th May 16
Stock Market Rally At the End of the Road? - 20th May 16
British Pound Soars on BrExit Hopes Despite Remain Establishment Fear Mongering - 20th May 16
NASDAQ 100, FTSE, and British Pound - When Rare Market Data Screams, Listen  - 20th May 16
Unintended Consequences, Part 1: Easy Money = Overcapacity = Deflation - 19th May 16
The Federal Reserve is Not Going To Raise Interest Rates and Destroy Gold - 19th May 16
Stock Market Final Supports Are Broken - 19th May 16
Gold - Pro-Inflation? Anti-USD? - 19th May 16
Further Stock Market Uncertainty As Indexes Gained On Friday, Will Uptrend Resume? - 19th May 16
What This U.S. Presidential Election Tells Us About Her Millennial Generation - 18th May 16
Stock Market Trendline Broken on Fed Announcement - 18th May 16
An Incredibly Simple, Rarely Used Way to Book 170% Investing Gains - 18th May 16
Statistically Significant Stock Market Death Cross? - 18th May 16
Precisely Wrong on US Dollar, Gold? - 18th May 16
What You Can Gain From One Tech CEO's $355 Million Loss - 18th May 16
The ‘Tide’ has turned… NEGATIVE For STOCKS!!! - 18th May 16
Goldman Sachs's - Regulatory Climate is Chilling Deals; Hatzius Not Worried About a Recession - 18th May 16
Bitcoin Price Remains above $450 - 18th May 16
Crude Oil Price Trend Forecast 2016 Implications for Stock Market - 17 May 16
Could the National Debt Really Grow as High as $31 Trillion by 2023? - 17 May 16
Gold Price Possible $200 Rally - 17 May 16
Crisis Investing - Jim Rogers on “Buying Panic” - 17 May 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Why 95% of Traders Fail

The Next Financial Crisis May Already be Unfolding

Stock-Markets / Financial Markets 2015 Sep 03, 2015 - 03:05 PM GMT

By: MoneyMetals

Stock-Markets

Stefan Gleason writes: Is an epic financial meltdown about to commence? Predictions that a crash will occur in the fall of 2015 have been gaining traction. They are bolstered by some of the market events of this summer, which suggest that something big is indeed unfolding.

In August, the Chinese devalued the yuan, setting off volatility in currency, commodity, and equity markets worldwide. The U.S. stock market suffered its worst slide in four years, with the Dow Jones Industrial Average falling through major support levels. Crude oil prices careened below $40 per barrel.


Holding strong amidst the carnage was gold. The yellow metal may now be re-emerging as the premier safe-haven asset.

In times of financial crisis, gold tends to benefit – or at least hold up better than most other assets. Gold is the pessimist’s best friend.

The question before investors now is whether the pessimists will be right. Will the doom-and-gloom scenarios that some prominent market gurus have been forecasting play out? It’s worth considering their arguments, keeping in mind that nobody knows the future and that market forecasts are, at best, educated guesses.

Is the Stock Market Teetering toward a "Devastating Crash"?

Cycles analysts such as Bo Polny predicted a summer high in the stock market. He was right with that call (though his bullish call on silver for July notably failed to pan out). He now expects stocks will “put in a devastating crash cycle low in 2016 on the 50-year Jubilee,” in keeping with his views that we live in prophetic times. He sees the worst of the stock market meltdown occurring next year – not in September or October of this year as some are predicting.

One of the reasons why there is so much attention focused on this fall is that mid September marks the end of the 7-year Shemitah cycle, based off the Jewish calendar. Some see Biblical implications in what’s about to unfold. It’s not our place to weigh in on the religious aspects of market-cycle theories. But regardless of what drives the 7-year cycle, it does seem to exert a significant influence on markets.

The financial crisis of 2008 hit 7 years ago. Go back another 7 years and the September 11, 2001 terrorist attack happened, followed by a recession and bear market in stocks. In 1994, we had a brief bond market panic. Seven years before that, in 1987, the stock market crashed. And a little over 7 years before that (in January 1980), gold and silver prices peaked.

Will precious metals bottom in 2015 as stocks top out? It’s one very plausible scenario.

Many are expecting some kind of disruptive event to take place as the 7-year cycle concludes this year. Precious metals analyst Egon von Greyerz said that “this coming September / October, all hell will break loose in the world economy and markets.”

Add to that the Fed’s moment of truth. Earlier this year, the Federal Reserve had signaled the commencement of rate increases this fall after nearly 7 years of zero-bound rates. But growing turmoil in the financial markets combined with transitory dollar strength could prompt a rattled Fed to throw such plans out the window. The Fed’s credibility at that point may be hanging by a thread.

Fundamental Reasons Why the Precious Metals Cycle Should Soon Turn Up

Again, nobody knows the future. Investors shouldn’t completely rearrange their finances around a narrow window when a major event is predicted to take place. Instead, prudent investors try to anticipate how current known fundamentals will play out over the long-term.

For example, in precious metals markets, we know that the mining industry has been gutted. Mining has always been a difficult business, but gold and silver mines are now being shut down left and right. And at those mines that remain open, production is being scaled back. We can therefore reasonably expect supplies to be tight in the years ahead.

We fully expect that the next cyclical uptrend in precious metals will last for years. That’s the timeframe investors should be positioning themselves for.

Of course, there is a chance of a sudden dollar devaluation that causes gold and silver prices to spike dramatically overnight. But such an event won’t necessarily occur in the timeframe that a market guru identifies in advance. As an investor, you need to be prepared for an unexpected one-off event to strike at any time.

If you have stocks or other financial assets that you are worried could be vulnerable, then hedge your risk. Gold is one of the very best counter-weights to financial assets you can own, because it exhibits low correlation (and often negative correlation) to stocks and bonds. When they tank, gold can surge.

When the dollar itself becomes the financial asset that investors are fleeing from, then silver will likely emerge as the best asset to hold. Silver tends to perform better than gold in inflationary environments. And few assets are as depressed in price today as silver.

This summer, institutional sellers took on a record short position in silver futures as inventories on both the Comex and Shanghai silver exchanges got drawn down. That sets up the potential for physical shortages and a massive short-covering rally.

We’ve seen shortages for many types of silver bullion products since late June as depressed prices attracted large-scale bargain hunting. That could be a harbinger for things to come in the broader physical market.

By Stefan Gleason

MoneyMetals.com

Stefan Gleason is President of Money Metals Exchange, the national precious metals company named 2015 "Dealer of the Year" in the United States by an independent global ratings group. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.

© 2015 Stefan Gleason - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife