The Three P’s To Watch for….
In the weeks and months to come, there are 3 P’s to watch for both from the bear side and the bull side.
The bull side as far as metals consists of:
Progression - The steady increase of demand by institutional, government and major investors of precious metals and other commodities.
Public Participation - When you see the local newspapers cover stories of “hairdressers and taxi drivers” pawning everything and selling anything to “buy gold and silver” that’s when you know the frenzy and insanity has begun. This happened in the late 1970’s and up to 1981-82 and will again.
Panic - When the price of precious metals goes parabolic, and I’m talking $100 plus per day moves in gold, with panic buying by institutions and average schmucks, we will be nearing the end. I do not see that until gold is above $1650 per ounce and the inflation rate is finally acknowledged as above 4-5% per month.
The bear side of bonds and equities consists of:
Ponzi - The recognition of various investment schemes by the MSM and public as “excellent” investing opportunities (derivatives, hedge and mutual funds anyone?).
Public Participation - The major sell off or so-called “crash” of 10-15% in equity prices and bond prices will be considered as a “buying opportunity” by all the “experts” and will be promoted as the last great chance to get in on a good thing.
Panic - When the entire world and investing public realizes the 10-15% crash in equity prices might actually turn out to be a 30-50% actual crash and then all head for the exits at the same time. There is a new paradigm this time though. If we have stagflation, it’s a 30-60% decline. If we progress to a severe recession with inflation, beyond stagflation, the normal correction range is 50-75% of all the markets.
The difference this time? Our society will change forever as we obliterate the savings of over 60 million baby boomers and enslave our nation to the Chinese model in a feeble attempt to rebuild our imploded economy.
