Trend Forecast

The greatest financial scam in world history has inflated the largest debt/equity bubble in world history. While it is currently deflating, the precise time it will burst and how low the markets will go are difficult to forecast, considering the scope and depth of central-bank intervention and government/political maneuvering. At some point, however, a future round of manipulation will fail, the equity-market panic will accelerate, commodity prices will further deflate and globally, to varying degrees, nations will sink into deep recession and/or full depression.

Considering the pending market volatility, combined with increased geopolitical unrest (see “Human Waves” and “The Last World War,” pages 13 and 10), we had long forecast gold, despite hitting six-year lows, would re-emerge as the primary safe-haven asset. It has. While the MSCI All-Country World Index is in bear-market territory, gold prices have moved higher. We forecast that gold must remain steadily above $1,200 to reach its next breakout point, $1,400. Once stabilized above $1,400, we project a $2,000 range.