by John Galt
March 1, 2013 05:30 ET
The markets are at a face palm railroad crossing and unfortunately most market participants and gurus are missing the warning sign. First and foremost is that gold has shifted from its safe haven status to a full blown predictive indicator of approaching economic and stock market action. At this moment the declines in gold are not stating we are in the great hyperinflation but in fact possibly heading towards another period of deleveraging and deflation as the monetary expansion has not been large enough to force the consumer and business into reckless economic activity.
If the support levels break the $1530 area decisively and the gold market moves below the $1500 level in rapid fashion, which I think it will, then within 30 days the stock market will start a normal correction which could accelerate into something worse with the inept political apparatus in world capitols now.
Next the US Dollar is preparing for it’s final blow off parabolic move and technically it would appear that after breaking the 82.50ish area, it will be full speed ahead to 84 then 89 to 91 on the US Dollar index:
Since these two things are not isolated incidents and will cause great angst within the central bankster community, look for an overreaction to the side of QE∞ and the ultimate dollar devaluation policies when the August Federal Reserve meeting/panic begins. Stocks are still primed for a 30-35% correction and the failure in the markets yesterday is a prime time warning that this phase of the bull move within the long term bear is about to end.
Of course after August, the sky is the limit on equities because the Fed will probably start buying stocks too.
And can you imagine what will happen when they begin supplementing private stocks? There can be no doubt what will rapidly ensue when that takes place. You just gave me a new nightmare.