The Dollar Bear Is Returning In 2011! Got Gold?

The Collapse of the Dollar is Coming Soon

These days, according to a recent Barron’s poll,  it is almost impossible to find an analyst who is long-term bearish on [the U.S. dollar], the stock market or the economy but I think they are all going to be wrong – horribly wrong. I believe that in 2011 inflation will spike, the dollar will collapse, the stock market will begin its third leg down in the secular bear market and the global economy will tip over into the next recession that will be much worse than the last one. Words: 555

The U.S. Dollar is Going DOWN, the Price of Gold is Going UP

I’ve gone over the 3 year cycle in the dollar index many times [and, unlike articles such as this, I am convinced that] the dip down into the next cycle low [will begin] this spring and drive the final leg up in gold’s massive C-wave to a final top… [In fact,] it will drive virtually all commodity prices through the roof, the most important being energy and to some extent food, just like it did during the last three year cycle.

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[Last time] it was the sudden massive spike in energy that drove the global economy over the edge into recession in late `07 and early `08. The implosion of the credit markets just exacerbated the problem. You can see on the following chart [that] just as soon as Bernanke drove the dollar below long term historical support (80) oil took off on its parabolic move to $147.

What followed [i.e. the spike in the price of crude oil] was a collapse in economic activity and the beginning of the second leg down in the long term secular bear market for stocks [which] was mirrored by the dollar rallying out of the 3 year cycle low. That rally was driven by the severe, but brief, deflationary pressures released as the global economy and then credit markets collapsed. We will see the same thing happen again as a result of Benanke’s attempt to print prosperity and reflate asset prices [See here for a supporting view on this subject.].

Conclusion

Contrary to what economists and analyst are telling you I believe that at the dollar’s three year cycle low in 2011 it will be time to put our bear hats back on and prepare for hard times that will include a horrible spike in inflation, a collapse of the dollar, the beginning of the third leg down in the stock market [unlike this view] and the global economy tipping over into the next recession that will be much worse than the last one.

[With the upcoming collapse of the dollar it is time to buy gold.]

 

*http://goldscents.blogspot.com/2010/12/bear-will-return-in-2011.html