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It didn’t take long for Europe’s sovereign-debt crisis to reassert itself. Here we are in May, a short three months after the last bailout of Greece, and Europe is crumbling again.
Greece is on the ropes, and will most assuredly have to splinter away from the euro and take back its currency, the drachma. It’s the only way Greece can get out of its depression. Dump the euro, take back the drachma, devalue it, and inflate its way out of the mess and out of debt.
Portugal is reeling again, too. Spain is also going down the tubes. Depositors are making runs on the banks. Moody’s has downgraded virtually the entire Spanish banking system. Spain’s stock market is at 20-year lows.
It’s not much better in Italy, the most-indebted country in Europe. And France isn’t far behind. Now that the Socialists lead the country, you can expect France’s fiscal situation to worsen.
Meanwhile, the only economy holding Europe upright is also starting to slow. Germany’s giant export machine is wobbling, and so is its economy.
So it should be no surprise to you that stock markets are falling now. In order of weakness: Europe is the most-vulnerable, U.S. stocks are the second-weakest, and Asia’s equity markets are the least-weak of the three corners of the globe. Latin American markets will generally follow the U.S. markets.
But what about commodities? It’s certainly understandable that economic weakness would also take its toll on demand-sensitive commodities such as copper, foods, other base metals, and the like. After all, if economies are sinking anew, demand for these commodities is sure to fall.
And that’s precisely what I’ve predicted for the commodity sector. I was perhaps one of the only commodity bears out there for the past several months, but now my warnings are coming true. We’re seeing a sharp decline in most commodity prices.
The big question on most investors’ minds is why gold and silver are also falling. After all, when governments are on the verge of collapsing, shouldn’t that be bullish for gold and silver?
Under certain circumstances, yes. But not always. If the peripheral economies are collapsing, and their governments are under social attack, like what’s happening in Europe, then it’s not all that bullish for gold and silver. The core of the global economy, the U.S. and the U.S. dollar, can still suck up much of the frightened capital.
Again, that’s precisely what I warned, and precisely what’s happening. As scared capital flees Europe — it’s going primarily into cash, and into the U.S. dollar.
That’s pushing the U.S. dollar up, and taking the shine off of precious metals. Plus, always keep in mind that at the beginning of a crisis like we have now in Europe, investors want cash above all else. So gold is not the king right now. Cash is king.
That’s all going to change soon, because the world’s central banks despise runs to cash … they despise falling asset prices … and they absolutely abhor disinflation or, even worse, outright deflation.
So that means that central banks are soon going to start printing massive amounts of money again, flooding the global economy with trillions of additional dollars.
And when they do, you could just as easily see gold and silver bottom out and begin the next legs up in their bull markets.
I believe that’s not too far away. But it’s likely we will see further declines first. My models tell me that we are not yet at asset price levels that would send central banks into panic mode, forcing them to put the pedal to the metal with their money printing.
Here’s what my models are telling me. Look for further declines ahead …
- Down to below $1,440 in gold
- Down to below $26 in silver, to as low as $21
- Down to below $85 in oil
- Down to below 12,000 in the Dow Industrials
And mark my words: When the commodity markets do bottom out and central banks start printing money again — it will represent the beginning of the biggest phase yet in the commodity bull markets.
So get ready, because it’s right around the corner.
Best wishes, as always …
Larry
{ 26 comments… read them below or add one }
Dear Larry,
I want to take fresh positions in Commidities. Do I wait for commodities to go down to decline levels you have indicated or dollar cost average and start buying now onwards?
Thank You
Sun
Meanwhile Larry, ZeroHedge is reporting Chinese commodities buyers defaulting on purchases because of rapid commodities price declines…
LARRY AS ALWAYS YOU HAVE BEEN SPOT ON YOUR AT THE TOP OF YOUR CLASS.
Thank you for the update Larry, hope all is well with you.
Thank you for the update Larry. My thinking is the up turn in commodities will come sooner than later, so could be right around the corner. WIll be watching for your updates.
Jack
I agree with what you say.Just don’t say these central banks are going to print money.This has nothing to do with money and you can’t print money.They will be increasing the supply of fiat currency.Many central banks have been buying gold,so maybe some day we will see money based currencies,again.
Unfortunately we have been buying a little bit of both silver and gold already but plan to save our pennies and really back up the truck within the next week or two assuming you are once again right. Keep up the good work… Bob in Greensboro
I am a member but I did not receive the May Real Wealth report. Please advise.
Hi Stephen — Someone from your Customer Care team will get in touch with you about your subscription ASAP. Thanks for bringing this to our attention. Cheers!
Hi Larry: You wrote: .” Now that the Socialists lead the country, you can expect France’s fiscal situation to worsen.” After years of exploitation by the gangster bankers, you criticize the Socialists??? Haven’t you heard what has happened in Iceland? The PEOPLE dumped the quisling to the bankers government, told the bankers to take their odious fraudulent debt and shove it, and now their economy is recovering quite nicely and the perpetrators are facing criminal trials. I hope the Greeks and French do the same. Hollande is already backtracking on his pledge but what do you expect? I strongly urge you to read John Perkins Confessions of an Economic Hitman about how international finance corrupts and bankrupts whole countries, or Web of Debt. http://www.webofdebt.com/ by Ellen Brown. Please note: During the California energy crisis, Los Angeles, which owned its own (horrors of socialism) utility companies, did NOT suffer rate gouging. North Dakota, which has its own state owned (horror of socialism) bank has no recession.
Hi Eric
Please no discussions regarding policy, in particular if you have no idea of it. If a state bank goes bankrupt, that’s capitalism. If an investment bank does not go bankrupt because the government bailout the banksters, that’s socialism. You must distinguish Playground and players, a state bank and an investment bank to be players but how they are treated by the government or politics, is the playground. A state bank is not sozialistic just because they run or guaranteed by the government if they can go bankrupt (as in Switzerland a few years ago), that is the capitalist mode of Playground. Capishee!
Please don’t point to Los Angeles which its owns utility as a city which works. It hasn’t raised its rates(that is not true) but it also can’t pay its debts. The city is cutting its teacher’s salaries and is billions of dollars in debt. I live here and believe me when I tell you this city(the horrors of socialism) is failing. Larry is right. The only way to get out of this mess is to devalue the money we pay our city employees. Do you think that as their inflated costs go up that they won’t raise my utility rates(again)? As the money that is devalued is paid to employees (unless it is paid in gold) the employee won’t be able to buy as much with it. The state is trying to raise taxes with a referendum and people and businesses are leaving this state by the millions. Although I don’t live in North Dakota I know they are rich in recently found oil (one of Larry’s commodities) which they are drilling for and creating new jobs and good salaries and a larger tax base(the horrors of capitalism).They can afford to give their citizens perks.
Consider this as an alternate reality that may become an actuality:
AN ALTERNATE REALITY
Europe, instead of crumbling, gets its act together and finally, with its back to the wall and facing the abyss, decides to really UNITE in a political and economic union more complete by far than the present arrangement.
MONEY FLOWS OUT OF THE USA AN TO EUROPA
As the ECB pumps trillions of dollars into the EU, and as austerity is left in the dust, Europe– not the USA– then becomes the number one place to invest. Investment dollars flow OUT of the USA and into Europa.
NEW HOLY ROMAN EMPIRE RISES
Europe rises like a Phoenix from the ashes to stun the world, becoming soon the wealthiest and most powerful Empire the world has ever seen since the days of ancient Atlantis.
USA GOES DOWN
Much of the bailout funds that will accomplish this will come from the US Federal Reserve. Yes, the FED will betray America’s people once again to bail out Europe.
Why is that? Because the Cabal banksters owe their primary allegiance to London, not to the American people.
They are internationalists whose primary concern is themselves.
RESULT
Another Great Depression in America, as her people are humbled and learn some important lessons. Do not look at this as a bad or evil thing. The spiritual heart must be awakened to finally break the spell dark materialism and greed have cast over America.
2013-2024 will be a rough period of disaster and calamity. Unfortunately, it is at such times that hard headed and stubborn human nature and recalcitrant mankind is most apt to learn the lessons it must learn.
Now trapped in a dense materialism it cannot rise further to its true goal, unitl it can awaken from that trance–that false matrix in which it finds itself enmeshed.
Finally, around 2024, America will arise once again to be the shining beacon to the world it was meant to be.
@FS
The Fourth Reich theory, FS. Really? Based on what realities?
The reality that Europa will have no other choice. It is either complete political, fiscal, and monetary union, or dissolution. The old saying coined in America:
United we stand, divided we fall.
Eurostocks are now dirt cheap. As Europe rises again, those invested in Europe will become very wealthy.
The race (Euro-Caucasian) that ruled most of the land surface of the Earth for 500 years, achieved the highest culture the world has ever seen, and built the currently BIGGEST trading zone on Earth, is not about to let itself fade away into the dust bin of history.
The catalyst to pull it all together will be the one commonality ALL European nations share.
This was the original dream of the Treaty of Rome. It will soon come to pass.
In the East China will join with Japan and form an Eastern Block to attempt to counter the rise of Europe. The US will fade out of the picture in a few years–for now, but rise again in a decade to new splendor as the entire world rebuilds after the coming catastrophes. Those CAN be averted, but ONLY if America and Europe turn in a different direction than that in which they are headed. Time will tell.
I’ve been watching from afar the Weiss groups analysis for over 30 years.I only have to say that I wish I paid attention then!
Larry, you are a bona-fide genius!
Keep up the fantastic work!!!
Larry, I’ve been following your advice for years, thank Heaven, and will definitely continue to do so. You have recommended purchasing some silver and gold bullion, and I would greatly appreciate your advice on where I can actually buy silver and gold bullion at best prices.
Thanks again for your great advice. And God Bless you and yours. Jim Willis
A couple of good sites to buy: silver50.com, providentmetals.com, ebay for smaller purchases (prepare to pay higher prices there though)
Nice call larry, well played buddy.
Q; when, ?? is time to buy Gold & Silver.
Larry is right on the button. I am keeping my powder dry.
What the heck happened to this afternoon around 3 pm? Is this an example of the Plunge Protection Team? It’s very frustrating to see the markets start behaving like we think they should, then suddently turnaround at the end of the day. Sheesh! It’s difficult to take!
I am very impressed by the unequivical advice offered here. I bought a gold ETF and Mining Stock ETF in March to initiate an allocation. Too soon (of course), but now I have sound advice on timing for the next buy. Thanks!
This from Yahoo Finance, May 28, 2012:
The pan-Asia stock index posted a third consecutive week of losses last week for its longest losing streak in six months. It has now wiped out all its gains for the year, having been up some 15 percent from end-2011 levels in late February.
In response to your question:
The race (Euro-Caucasoid) that controlled most of the land mass and the hugest bulk of the world’s wealth, that now is the biggest single economy on Earth (the U.S. is second to the EU), that achieved the highest civiization the world has ever seen, and that exported its languages and culture and indeed its people all over the planet, is not about to go down into the dust bin of history with a whimper.
The old saying was coined in America I believe:
United we stand, divided we fall.
Europe knows it MUST unite—politically, economically, financially, and militarily to survive. It’s back is against the wall.
If we know anything about humans—they achieve miraculous things when all other options are gone.
Larry,
What kind of printing (or other complex currency tricks) do you expect to be first? European, US, or Asian? What kind of advance notice will the corresponding central bank provide, if any?
What kind of discreet QE tools might they use that are less likely to attract attention or would conceal the magnitude of the printing?