As the Fed accelerate its taper program, we forecast market fundamentals beyond Fed control will push interest rates higher. And since this has been an interest rate recovery (see “The Interest Rate Recovery,” Trends Journal, Spring 2013), the higher rates go, the deeper the economy will sink. Therefore, in its effort to avoid economic panic from spreading, we anticipate the Fed, as well as other central banks, will devise new money injection schemes to pump up equities, inflate commercial and residential real estate sectors and keep retail sales from plummeting. These new stimulus programs, which will serve to devalue already battered fiat currencies, will also drive up gold and silver prices.
While it is extremely difficult to forecast the timing of these events in the face of a variety of behind-the-scenes schemes and insider manipulations, our best estimate is that economic turmoil will rattle the global markets by the end of the second quarter of 2014. Considering the colossal failure of the QE programs to boost general economic growth, any new stimulus programs, or continuation of current ones, will be met with high skepticism and do little to boost markets and/or consumer confidence. The real estate, auto and retail sectors will be dragged lower while the equity markets risk a panic-like sell off. For us (we do not provide financial advice), precious metals remains the primary long-term safe-haven asset.