Archive for category: Gold Forecast

The Federal Reserve Bank has printed trillions of dollars to monetize US government debt just to keep the government afloat.  Any significant rise in interest rates will probably decimate US government finances, the fragile housing market and in the bond market it will cause a financial catastrophe through interest rate derivatives.

This is a solid reason why the Fed will not raise any rates in any foreseeable future.

The power to create money out of thin air is great!  Should we give it to politicians and secretive central bankers? Will this power be abused? Will those in charge yield to the temptation for “legalized counterfeiting?”  Apparently the answer is YES.

All that the Federal Reserve has done was to inflate equity markets. They never solved any of the original financial problems that lead to creating “The Credit Bubble of 2007”.  There was as well no financial resolution by our elected political officials to resolve this serious problem so that it would never occur again in the near future.   This process called “Quantitative Easing” created a shift of a tremendous amount of wealth from the middle class and the poor to the rich.

Inflated stock prices, usually held by the wealthy, created a clear “redistribution of wealth” which will be paid for by future generations to come. The concept by the Fed was that centralizing the wealth would help in creating new jobs and increase capital expenditures in their businesses.

The problem with this philosophy is that it never filtered down from the Billionaires into real economic growth within our economy. Instead, rather than experience expansion, we have been experiencing contraction which is resulting into an economic deflationary depression that will appear evident to all by the end of this year.

The top 1% of Americans hold 35% of the nation’s wealth. This inequality has continued to grow exponentially.

There are several reason that I can refer to why the Fed will NOT raise rates anytime in the near future. There are interest rate cuts and devaluations going on all around the world at the moment. Japan and the Eurozone are both implementing Quantitative Easing.  China is resorting to its alternatives to hold its financial system together and stave off a hard landing. Emerging market economies are being hammered by commodity price falls, while oil producers are being similarly hit by oil price falls.  There is no Inflation in developed countries.  The world is entering a deflationary slump.  Why would the Fed ever even think about raising interest rates???

The unwinding of QE will have many negative effects in a market that is already short of liquidity. So, the unwinding that must be delayed for quite some time will be welcomed by many. The unwinding of QE purchases and the normalization of bond prices would be extremely negative for the bond markets, so the tin can will be kicked down the road for quite some time still.

The PBOC has significant room to lower required reserve ratios on banks to encourage lending. Even after a series of cuts, the RRR remains at 18.5 percent for major banks which is among the world’s highest. Reducing the ratio by 10 percentage points would free up 13 trillion yuan ($2.1 trillion) of additional capacity for banks to lend. On the fiscal policy side, the country’s $3.69 trillion of foreign-exchange reserves and relatively low national government debt levels mean it has the ammunition for fiscal stimulus. China is planning at least 1 trillion yuan ($161 billion) in long-term bonds to fund construction projects as the economy struggles. Most of the interest payments on the bonds will be subsidized by the central government. I believe that more projects of this type will be initiated in 2015.   This is a major factor why the Federal Reserve will continue pumping liquidity in the financial system.

I believe that the FOMC minutes suggest that it is very far from a rate hike, the US economy is more likely to see QE4 first!

In short, there is no reason to believe that core inflation will rise to the 2% target any time soon and raising interest rates at the moment would jeopardize the US’s fragile recovery.

CPI Continues To Decline

The FOMC members gave the following reasons for caution:

• Wages aren’t rising much
• Prices aren’t rising much either
• The dollar is strengthening
• Commodity prices are falling
• Economic growth is still pretty weak
• The labor market isn’t as strong as the unemployment figures suggest

In Conclusion:
We continue to see the US and global economies struggle. The writing is on the wall that a collapse in equities is drawing near, but we have yet to see the broad stock markets break down. When they do, there will be a lot of money made by taking advantage of falling prices, which is what my focus will be with my trading capital and ETF trade alert newsletter: www.TheGoldAndOilGuy.com – SPECIAL OFFER

Chris Vermeulen

Last week, the global equity markets were quite undecided. China’s and Japan’s equity prices have been moving higher. The Japanese Nikkei reached its highest level since 1996 on Tuesday, August 11^th, but then pulled back at the end of the week. Hong Kong’s Hang Seng made a new monthly low and the Australian Market fell to a new 6-month low.

Europe was more decisive. Traders mostly sold stocks.  The German DAX, London FTSE, and Zurich SMI all fell to monthly lows by mid-week and did not recover much by Friday August 14^th’s close. In Russia, it was much different. Moscow’s MICEX index rallied to its highest mark in 3 months.

In the US Markets, the selling was even more intense.  On May 19^th,2015, the DJIA topped out at 18,351.  The DJIA has failed to make a new high since then and continues to sell off. The decline, so far, has been over 1,220 points which is its’ greatest loss of the year.  Last week, began very strong, with the DJIA up 245 points on Monday, August 10^th; Tuesday was down 212 points, and by Wednesday, the DJIA had fallen all the way to 17,125, its’  lowest level since February 2^nd, 2015. We had a CONFIRMED BEARISH/SELL signal on August 4^th, when the Dow Jones was at 17,596.  Before I can take any BEARISH positions in the US Markets, this signal needs to be CONFIRMED by the SPX and the NDX-100 as BEARISH, which are currently NEUTRAL/TRENDLESS.

The SPX landed at support levels and found its’ footing, once again. We are getting closer to the cycle lows in September/October when the downward pressure will push it through its’ support trend lines.  We are still into a sideways direction. It is a little too early to tell if it will continue the sideways motion or decline in some downward momentum, next week. SPX is undergoing a consolidation in a downtrend trend using the 200- Day Moving Average as support. A daily close below 2076, which does not hold, should bring about the next challenge to the 2040 major support level. The current declining patterns are represented in those of the DJIA,, NYSE and the Dow Jones Transportation Indexes.

The Dow Jones Transportation Index and the Dow Jones Industrial Average are leading the US Markets down during this topping process   They are declining further than the other indexes, and the other indexes should be establishing their downtrends, in the near future. With the exception of a monumental one-day market crash, that happens once in a blue moon, bull markets that are topping undergo a drawn-out process that usually takes, at least, many months before bearish momentum finally takes over and a new downtrend emerges.

Considering that US stocks have been in a 7-year bull market, it would be unreasonable to expect such bullish momentum to change overnight.

Therefore, even though price momentum has been favoring the bulls lately, it is still my belief, that it is dangerous to be invested on the long side of these markets, as of November 25th, 2014.

The stock market is undergoing a big trend change and most of the analysts are missing it, which is normal. They lack the access to “The Predictive Trend System Analytic’s” of a Financial Forecasting Model. My clients have the access to this knowledge from our subscription service that we provide.  This knowledge provides you, the client, with THE EDGE that other professional investment firm’s lack.

U.S. equity markets have been fueled by cheap dollars and cheaper interest rates. The combination of the stock market crash from 2008 – 2009, along with a declining U.S. Dollar, has been destroyed by the Federal Reserve Bank (FRB), which has helped US Equities to become a bargain on the global market. This allowed foreign buyers to come in and purchase US Equities, at both a nominal value, based on the markets’ decline, as well as, a relative value based on their home currency. Foreign investors have capitalized on the rise in the US equity market

On November 25th, 2014 my **Global Sentiment Model signaled the “EXCESSIVE EXTREME OPTIMISM”, which provided an exit point on all long US Market positions .  Those traders and investors, that remained in long positions, who were not subscribers to our service, at that time,  have just been channeling, without any new break outs into new highs.

There is a huge disconnect between the popular sentiment, among the  “talking heads” on the news, regarding how these events will affect the September 2015 meeting of the Federal Reserve Bank. The general consensus, that I feel currently exists, is that this could very well push any increase in interest rates, out into the year, 2016. The Federal Reserve Board of Governors has been decidedly dovish, regarding this aspect, and has continued its’ quantitative financial engineering.

INVESTOR SENTIMENT READINGS

High bullish readings in the sentiment stock index usually are signs of Market tops; low ones, market bottoms.

Our current sentiment and technical features are consistent with a major stock market top.  This model uses the market sentiment composite which is a measure of investor sentiment. This metric tracks the mood of investors, which is then translated into a probability whether the markets will advance or decline, within the near term, as well as, an undisclosed period of time. It is a contrarian indicator that produces a bullish signal, when market sentiment is overwhelmingly negative, and a bearish signal when markets are overwhelmingly bullish.

We have not disclosed these models’ methodology, and its statistical data, as it is proprietary.  We have also not disclosed the correlation coefficient that is used to measure the strength of the linear dependence and its’ algorithms between the market sentiment composite and the 12-month forward return. A trading friend of mine developed this model thirty years ago.  For the period of time that it has been implemented, which is now 25 years, it has been predicatively accurate, 100% of the time, prior to any major changes within the US Markets. The last signal that was generated was on November 25th, 2014, which registered   “EXCESSIVE EXTREME OPTIMISM” and the broad market had been trading sideways since.

Learn how to read the market and make the same trades we do: www.TheGoldAndOilGuy.com

Chris Vermeulen

A take on the global economy and equities markets that paints a simple and clear pictures I think.

The DJIA index has recorded seven consecutive down days in a row!  These 7 distribution days are a sign that many institutions are taking profits or establishing losses.

As we are entering the second half of 2015, financial panic is occurring globally. Currently, this tremendous financial devastation is happening throughout the world.  Stock prices are crashing in China, Europe and soon I feel the United States. Puerto Rico has now defaulted on their debts. Quantitative Easing has been masking the symptom of this endemic disease. The Greek Banks are still frozen and will continue to stay this way; however, the mainstream media is not reporting on this current situation in Greece. There is a limit on weekly withdrawals of 420 Euro per (around US $455).

The corporate leaders of the major banks were left in place back in 2008/2009 and were allowed to continue receiving their huge bonuses. Their banks only existed because of the unprecedented taxpayer subsidy.  The system is still essentially the same as it was before, due to any lack of meaningful reforms that have been required.  It is this lack of change in all the required global fiscal policies that I am warning you of the coming collapse of this new “Asset Bubble”. This is where “profits” are Privatized and “losses” are Socialized.

The printing of limitless sums of virtually free money under various “Quantitative Easing” programs and simultaneously slashing interest rates to their lowest levels in history has created stock markets that have been artificially “levitated” for many years now.  This growth is based on virtually “free money”. I am  warning you that the current business valuations and calculations are NOT accurate and even NON-sustainable.  Our previous “Credit Bubble” has now been leveraged and replaced by an even larger and more dangerous “Asset Bubble”.

The Federal Reserves easy money policies have left stocks and bonds on the verge of a massive collapse. Their “Financial Engineering” has created such a “horrendous bubble” that  it will lead to the largest historical economic deflationary depression that we have ever experienced. This bubble, when it finally implodes,  is going to be absolutely devastating to the global economies.  All irrational bubbles eventually burst.

What is actually required today is a universally respected reserve asset capable of filling our current void with a reliable presence that serves as a “store of value”.  We do not require a complex international committee to solve this new future problem.  This “store of value” asset is already in existence and currently held by some central bankers and prudent individuals around the world.  It is known as gold.  From the ruins of our chaotic financial crisis, a degree of sanity will prevail.  Gold, as a freely floating asset, will arise in stature as the only element of global monetary reserves. The floating aspect is the vital evolutionary improvement over all previous structural monetary failures which tried to use a gold standard at a fixed price (i.e: unit of account).

When the global financial crisis hit in 2008, U.S.Dollar liquidity dried up and international financial markets experienced widespread paralysis. First to the scene was the U.S. Federal Reserve Board, pumping liquidity into the system and establishing a series of large-scale bilateral swap agreements with major central banks. This included several countries in the major emerging markets. The International Monetary Fund (IMF) followed with a number of programs for countries hit by the crisis and it adapted its financing toolkit to meet the demands of the crisis. For the first time, policy makers looked to the Special Drawing Rights (SDR) to provide much-needed liquidity throughout the international monetary system.

SDR is an artificial “basket” of currency used by the International Monetary Fund (IMF) for internal accounting purposes. The SDR is also used by some countries as a peg for their own currency and is used as an international reserve asset. The SDR was created by the countries participating in this system who needed official reserves (government or central bank holdings of widely accepted foreign currencies) that could be used to purchase the domestic currency in foreign exchange markets where it is required to maintain its exchange rate. It is a potential claim on the freely usable currencies of IMF members. The Special Drawing Rights was created by the IMF in 1969 to support a fixed exchange rate system.

The SDR is neither a currency nor a claim on the IMF. It is a potential claim on the freely usable currencies of IMF members. Holders of SDR can obtain these currencies in exchange for their SDR.  The SDR is primarily a unit of account for the purpose of accounting.

It is my view point that the SDR, which is a “Virtual Reserve Currency”, will never come close to achieving a status anywhere near that of “the principal reserve asset in the international monetary system” as envisioned by The International Monetary Fund for a future global reserve currency!

Gold has been declining sharply since its all-time high of  $1,920/ounce on September 2011. It is experiencing a historical correction that we forecasted years ago. I am expecting much lower prices over the next few months.   My predictive trend and cycle strategy will inform us when we have roughly hit the bottom of these two markets (gold & silver).

Today, the majority of investors now believe gold is dead and no longer relevant and that cash and the U.S. dollar is King.  With this type of “herd mentality”, investors will mostly likely miss the next historical buying opportunity for metals, and miss the ultimate short-sell trade on US equities.

Chris Vermeulen
TheGoldAndOilGuy.com – ETF Trade Alerts
Algorithmic Trading Strategies Developer & Trader

In 1933, with America five years deep into The Depression, the stage was set for an act of unprecedented proportions. History shows a wicked warlock at work.

On March 6, 1933, Executive Order (EO) 6073 was passed by Franklin Delano Roosevelt (FDR), the 32nd President of the United States in an attempt to solve the dire banking crisis. Executive orders have been around since 1789, allowing Presidents to issue legally binding orders unilaterally, without the consent of Congress. During his Presidential tenure, from 1933 to 1945, Roosevelt would issue 3,728 Executive Orders.

This was his third and it was a doozy. I could just imagine how angry and frustrated individuals would have been. I doubt this will happen again but history does have a way of repeating…

Source: Wikipedia-executive order 6102

Just two days after Roosevelt was inaugurated as President, he proclaimed a “banking holiday”. From and including Monday, March 6, 1933 to Thursday, March 9, 1933 no bank “would pay out, export, earmark, or permit the withdrawal or transfer in any manner or by any device whatsoever of any gold or silver coin or bullion or take any other action which might facilitate the hoarding thereof…” Sold to the American people as an attempt to control speculation and regulate interest rates, he closed America’s banks, thwarting customers from withdrawing their paper money holdings or converting their holdings to gold.

With a swish of his magic wand, Roosevelt mastered “complete control over America’s banking system”, expanding his Presidential powers exponentially in the process.

In his first “Fireside Speech” (which burned the backside of many Americans) on March 12, 1933 Roosevelt declared “Let me make it clear to you that the banks will take care of all needs, except, of course, the hysterical demands of hoarders, and it is my belief that hoarding during the past week has become an exceedingly unfashionable pastime in every part of our nation. It needs no prophet to tell you that when the people find that they can get their money — that they can get it when they want it for all legitimate purposes — the phantom of fear will soon be laid. People will again be glad to have their money where it will be safely taken care of and where they can use it conveniently at any time. I can assure you, my friends, that it is safer to keep your money in a reopened bank than it is to keep it under the mattress.”

On June 16, 1933, EO 6073 passed into legislation as the “Emergency Banking Act (EBA)”. After only 40 minutes’ debate in the House of Representatives, with an unknown author and no printed copies available for members of the House, the Bill was passed swiftly and without due process. The wand was waved again.

At the time, Congressman Lundeen, appalled at the reckless lack of due process involved in the passing of this Bill said “I want to put myself on record against procedure of this kind and against the use of such methods in passing legislation affecting millions of lives and billions of dollars. It seems to me that under this bill thousands of small banks will be crushed and wiped out of existence, and that money and credit control will be still further concentrated in the hands of those who now hold the power…. I am suspicious of this railroading of bills through our House of Representatives, and I refuse to vote for a measure unseen and unknown.”

Meanwhile, Executive Order 6073 paved the way for Executive Order 6102 on April 5, 1933.

This Executive Order (EO) made it a criminal act to possess gold coins, gold bullion and gold certificates within the continental United States and ordered that the hoarded gold be delivered to the Government on or before May 1, 1933. The official price of gold was raised from $20.67 to $35/ounce.

Although it is unknown just how much gold was confiscated by means of Executive Order 6102, numbers suggest that by January 1934, there were 195.1 million ounces and 227.9 million ounces by August 1934.

The Government had to have some place to hoard the confiscated gold. So, Executive Order 6102 paved the way to Fort Knox. The U.S. Treasury Department began construction of the United States Bullion Depository (USBD) in 1936. Completed in December of that year, at a cost of US$560,000, the Gold Vault sits in a 109,000-acre Army enclave in Fort Knox, Kentucky.

The U.S. Mint states that 147.3 million ounces of gold are now tucked into Fort Knox. Guarded by Apache helicopter gunships and tucked into a bunker with a bomb-proof roof and thick granite walls, you’d think that 147.3 million ounces of gold would be safe in the vault. While Treasury officials insist that the “gold is all there”, why the resistance to a public audit? Congress begs off, saying it will cost US$60 million to test the gold. Other figures bandied about suggest US$15 million. Other so-called experts contest both figures, stating that an independent audit and assay could be conducted for as little as US$15,000.

More nefarious are that the numbers don’t add up…and never have. In his article The Great American Disaster: How Much Gold Remains In Fort Knox?, dated August 27, 2010, Chris Weber states that, at their peak in 1949, the Fort Knox reserves reputedly numbered 701 million ounces – 69.9% of all the gold on the planet. The latest figures reported by the U.S. Mint state that 147.3 million ounces of gold are now tucked into Fort Knox. Treasury subsequently downgraded this figure from 264 million ounces of gold, a decline of 79%! Lucy, you got some ‘splainin’ to do.

Clearly, the road to – and from – Fort Knox is paved in gold and not-so-gold intentions. Tales of pillaging, profiteering and skullduggery abound at the crossroads of Bullion Boulevard and Gold Vault Road. Masked interlopers didn’t rob the USDB. Reputed to be the second most secure place in the world (as reported in The Blogington’s post of September 21, 2010), the video cams, armed guards, attack helicopters, armored personnel carriers, and 30,000 soldiers guarding Fort Knox guaranteed that.

For over 50 years, while domestically it was a crime to hold gold, there is little doubt that well-heeled Americans – and America’s enemies, operating offshore, were able to procure gold at the bargain basement price of $35/ounce.

Not surprising that Fort Knox’s 22-ton door is locked to an audit. For almost 40 years, no visitors have been allowed in the grounds of the Gold Depository. Considered one of the eight most secure places in the world, we’re not getting in for a sneak peek anytime soon. In the last recorded “audit”, in the early 50’s, a group of Congressmen and Senators were taken on a quick tour of Fort Knox and allowed to peek into a few vaults. They reported seeing “orange-hued gold bars”. Lucy, you got more ‘splainin’ to do.

In his article “The Great American Disaster: How Much Gold Remains In Fort Knox?”, Chris Weber outlines details about the one “audit” of Fort Knox, as follows:

“The only audit that has ever been done of the gold inside Ft Knox was done days after Dwight Eisenhower became President in January of 1953. After 20 years of Democratic presidents, the American public wanted to be sure that the gold confiscated from them was still there. Thus, the new President ordered an audit within hours after taking office.

The central problem was that it wasn’t much of an audit. To sum it up:

1. Representatives of the audited group were allowed to make the rules governing the audit. No outside private experts were allowed.
2. Those government bureaucrats involved were inexperienced in their tasks, by their own admission.
3. The entire audit of the largest gold hoard ever concentrated in history lasted only seven days.
4. Only a fraction of the gold was actually tested. Later, the officials put this fraction at just 5%.
5. Based on that fraction, the official committee reported that, in their opinion, all the holdings would have matched their records if they’d all been tested.
6. If the audit was accurate, the fact remains that almost 80% of it went overseas in the coming years. If the audit was not accurate, the amount of gold lost could have been even more. “

On September 23, 1974, Mary Brooks, the Director of the United States Mint, led a tour of members of Congress and the news media through the USBD. There was no audit or inventory of the gold and no other public “inspection” has been allowed since then.

Why won’t the Mint comment about how much gold is there? Perhaps the acid test is not so much as what has happened to the gold in Fort Knox; but rather is there gold in Fort Knox? And if so, how much…..or how little?

In a feat worthy of The Great Houdini himself, the Fort Knox gold may be the World’s Greatest Vanishing Act ever.

In Conclusion:
There are other ways to take advantage of gold’s next bull market that can add leverage and protection against a gold confiscation. One of the best ways is through the ownership of gold producing companies. The key here is in buying the right companies as the right time within the market cycle.

If you are interested in accumulating shares in what I believe will be some of the best performing stocks in the near future join my FREE gold newsletter: www.GoldTradingNewsletter.com

Co-Authored:
Chris Vermeulen
Kal Kotecha

I am issuing a “Red Flag Warning” To Financial Markets for the next six months of 2015.  I have come to this conclusion that the next and most devastating financial collapse lies right in front of us. This information comes from my confidential sources who have shared this with me, and is supported by my 15+ years of trading and investment analysis experience, as well as the implementation of our financial forecasting models.

The SPX market internals/market breadth have started to correct itself and therefore the “rolling-over process” is now in progress.  This is primarily due to the 7-year cycle.  It has been slow, but steady.  So far, the result has been to pressure prices into a short-term downtrend.  This correction of the 7 year cycle will be significant!  If we look at the first three trading days of 2015, the SPX was down 2.75%.  The only other time in history that this occurred was when the SPX declined by more than 3% in the years 2000 and 2008.

Financial Markets do move in predictable waves, cycles and patterns.  Economic cycles have enabled experienced analysts, as well as myself, to correctly forecast the timing of stock market peaks and stock market crashes/corrections over a very long period of time. These cycles are currently indicating that the U.S Financial Markets and the US Economy are about to enter a major downturn. These are repeating patterns that do occur in different fractals.

There are many cycles that I have studied over the last 15+ years.  The 7 year cycle is most dominant and repetitive for our analysis and current application. We can look back at the most recent financial crisis which occurred in 2008 in which the stock market crashed, Lehman Brothers collapsed, and we were plunged into the worst recession that we had experienced since the Great Depression.   Prior to that, the last time that the stock market experienced a major decline was during the bursting of the dot com bubble, seven years earlier.  2001 was a year of recession for the U.S. economy and of major problems for stocks. That was the year in which “9-11″ tragically occurred.  Seven years earlier, in 1994, investors experienced the worst bond market of their lifetimes. Another seven years earlier brings us to 1987 in which most of us remember as “Black Monday”.  These repeating patterns are well documented in history.  The same price patterns appear, at any given time, from monthly, daily, hourly, even down to one minute charts. This is the reason why markets are “fractals”.

This current seven year cycle also aligns with the seven year “Shemitah cycle” that can be found in the Bible.  The Sabbath year (shemita Hebrew: שמיטה‎, literally “release”) also called the sabbatical year or sheviit (Hebrew: שביעית‎, literally “seventh”) is the seventh year of the seven-year agricultural cycle mandated by the Torah for the Land of Israel and is still observed within contemporary Judaism. All of the great economic crashes in the U.S, including the Great Depression, have been in alignment with Shemitah years.

I first discovered a long term cycle when I came across “The Kondratieff Wave” while in my early years of studying finance and economics. It was developed by a Russian economist named Nikolai Kondratiev.  Nikolai Kondratieff (Kondratiev), a Russian economist was the first to suggest that industrial economies followed a cycle of change

within business cycles which included “inflation”, the “expansion of the economy” and “deflation”, which is the contraction of the economy within a “business cycle”.

During these periods of decline that occur, in the long waves, a large number of important discoveries and inventions in the technique of production and communication have been made.   These are applied on a large scale at the beginning of the next long upswing.

The originally estimated cycle length lasts 50 to 54 years.  These are shifts over time between economic growth “expansions” and periods of economic declines of “contractions”.

This is my interpretation of the time frame.

I have defined 6 long economic waves (cycles) and each of them was initiated by a specific technological revolution:

1. (1600-1780) The wave of the Financial-agricultural revolution
2. (1780-1880) The wave of the Industrial revolution
3. (1880-1940) The wave of the Technical revolution
4. (1940-1985) The wave of the Scientific-technical revolution
5. (1985-2015) The wave of the Information and telecommunications revolution
6. (2015-2035?)The hypothetical wave of the post-informational technological revolution

The only thing predictable about todays’ global economy is the “K Long-Wave” economic cycle.  This is the reason more and more analysts are embracing the “K Long-Wave Principle” as an unrivaled economic indicator, and the source for accurate economic forecasts.

Our clients will profit substantially from the use of this proven advantage of the “K Long-Wave Principle”   This wave is characterized by four seasons:  Winter, spring, summer and autumn. We are currently in the Economic Winter.  We are in a global depression and experiencing an economic collapse during this period of time which is identical to the “roaring twenties”, but now it is similar to 1929. The last “Great Depression” lasted fifteen years and a World War to get out of that economic downturn.

My technical trader which is also a Capitol Hill insider went into development and research for a 5 year period of time 30 years ago. What was created was a financial forecasting model, which he implemented 25 years ago.  It is a Predictive Model in its nature.  It forecasts nearly every major market turn, within the U.S Financial Market. This gives you (my) private clients the EDGE which does not exist anywhere else.  It signaled that we exit all U.S Market positions on November 25th, 2014 for putting new investment money to work in US Equities.

Since that period of time, in history, the markets have just been “channeling” and going into a neutral position and we have been sitting in a “cash position” for these respective markets, which was the optimal position to be in.   When it has confirmed that the “TOP”, is in place, we will implement the proper position in which we will substantially obtain huge gains.  Until this time arrives, I ask that you follow our weekend updates.

Both, the 7 year cycle and “The Kondratieff Wave” are occurring at the same time.  This is a major occurrence that will take place very shortly.

Derivatives are going to play a major role in this next upcoming major financial crisis.  When you start hearing that word, on the news, then you will realize that things have started to really unravel. “Too big to fail” banks in the U.S have over 250 trillion dollars of total exposure to derivatives while only having 9.8 trillion dollars in total assets.

Derivatives are one of the three main categories of financial instruments.  The other two are stocks (equities or shares) and debt (bonds and mortgages).

When, not “if”, the derivatives market crashes, all U.S citizens will be responsible for bailing out the major derivatives clearing houses.  According to The Dodd-Frank Act: Section 2, U.S. taxpayers will bare the brunt. This gives the Federal Reserve the power to provide “discount and borrowing privileges” to derivatives clearing houses in the event of a major derivatives crisis.

Derivatives almost caused the complete collapse of the insurance giant AIG back in 2008. This financial crisis is inevitable because the causes of the previous one have not been solved. The derivative markets are not regulated, and they continue to grow unchecked.  The truth of this matter, is that there are no financial resources left. It is now out of control, and we just allowed it to get bigger and bigger and bigger.  The Federal Reserve, the US Congress and President Obama have created this situation, in which, there is not enough money in the world to cover these debts.

Find out how to profit from the coming events here: http://www.thetechnicaltraders.com/GFWSS/

Chris Vermeulen