You’re seeing massive declines unfold in almost all markets. The reason for it is rather simple, and it’s something I’ve been warning you about.
Even in the midst of what should prove to be the biggest commodity bull market ever, you can get sharp dis-inflationary moves, especially when …
• Investors are frightened that governments may be going broke, like they are concerned now with Europe. When that happens, and they see no light on the horizon, they take their money and head for the hills — panicking and selling almost everything in sight.
• The world’s leaders are equally at a loss about what to do, investors again head for the hills, and choose to park their money largely in cash — another motive for selling almost all assets.
• They believe that it’s far-more-important to be concerned with the return of their money than the return on their money, they run for the hills even more — causing even more selling.
And yes, even that religiously passionate asset these days — GOLD — can get caught up in the selling.
I’ve been warning about all of this, and it’s here now. Investors, seeing Europe start to completely unravel, are dumping just about everything. Asset prices are plunging, from stocks to commodities, even to real estate (again).
And although this is a short-term move, and NOT the major trend (which remains up for commodities), it’s not about to stop anytime soon.
Fortunately, those following my Real Wealth Report were prepared for this. I had them hedge their core gold holdings a while ago. I had them effectively sell short silver with an inverse ETF. I had them sell short the euro with an inverse ETF on the currency. And more.
I’ve been telling them to hold those fruitful positions. While there may be some bounces in the markets ahead, it’s important that you know where I believe these markets are headed, and when I believe they will bottom.
So without further delay, here are the target support levels for each of the major markets I follow. They are support levels I expect to be tested before the rout is over …
Gold: Once gold closes below the $1,527 level, look for support at …
I fully expect that by the end of July we will see gold test the $1,373.10 level.
Silver: Once silver closes below $26.07, look for support at …
I fully expect that by the end of July we will see silver test the $20.22 level.
Crude oil: To most analysts’ and investors’ surprise, oil is one of the weakest markets on the board right now, having given me no fewer than three sell signals. Look for support for oil’s upcoming bottom at either …
$77.10 or $67.05 (by the end of July)
Dow Industrials and S&P 500: A close below 12,200 in the Dow and 1,275.50 in the S&P 500 should lead to tests of the following support levels, with the extreme lower levels in the cards by the end of July …
*NOTE the large gap in support between 1,245 and 1,052. This is typically a telltale sign that if the S&P 500 cannot hold the 1,245 support level, a devastating mini-crash may be in the cards.
You should see lower prices ahead, over the next six to eight weeks, in virtually all markets but U.S. bond markets, which are temporarily benefitting from flight capital. The dollar should also continue to rise, on the back of flight capital.
When will it all stop? First, when the above support levels are tested. Second, and most importantly …
When the world’s leaders and central bankers get together and exercise coordinated money-printing.
That’s what they’re going to do. Come hell or high water. But it won’t happen until their backs are against a wall, and that’s going to be after further asset declines.
The next round of money printing, when it comes, will also be ferocious. The biggest yet. And with very few exceptions, like the Chinese yuan and other Asian currencies, it’s going to dilute the purchasing power of nearly all paper money.
Keep in mind that governments in the West are now fighting for their lives. They are drowning in debt. Unfortunately, the only thing they know how to do is issue more debt, and print money to pay old debts and support new borrowings.
It’s a very sad situation. But it has not come to a head yet. It will, when everyone realizes that Washington is not in any better shape than Europe.
That’s when the real %$#! will hit the fan. And out of it all will come a new monetary system, new government and even a new financial system.
There will be hell to pay, but a new day will dawn on the other side. But getting there will not be easy.
I’m doing everything in my power to protect and grow my wealth. Anyone who isn’t is asking for trouble. Big trouble.
P.S. If not already a member, you may want to consider joining my Real Wealth Report. It’s the best way I know how to get my messages and investment recommendations into your hands, so you can make your own choices on how to protect and grow your money during these unprecedented times. Click here to join now.