The pullback I’ve been warning you about in the U.S. equity markets is finally at hand but, once this pullback in the broad stock indices is over, the Dow Jones Industrial will lead the way higher yet again, and catapult to 31,000 over the next three years, with gold reaching $5,000, silver $125 and select individual stocks in the mining sector spinning off gains of 2,000%, 3,000% and even more. [Read on to learn about my enviable track record over the years and specifically why such gains will be realized over the next three years.]
The above comments are edited excerpts from an article* by Larry Edelson (swingtradingdaily.com) entitled Dow to Double to More Than 31,000. Mining shares to QUINTUPLE!.
The following article is presented courtesy of Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!) and has been edited, abridged and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.
No, I’m not out of my mind. Quite to the contrary, I believe I am the one analyst who really understands the forces that are building to [enable such to occur].
My Track Record
…If you think I’ve lost my mind, consider this: my best forecasts have always been accompanied by the same shrill voices of others telling me I’m nuts.
When I foretold of the 1987 stock market crash months ahead of time, they told me I was crazy.
At the depths of the 1987 crash when I said that the stock market would see new highs merely two years later, they wanted me committed for life. Yet that’s precisely what the stock market did.
When I forecast in early 1989 that a war would break out somewhere in the world in August 1990, they thought I was crazy. But on Aug. 2, right on time, Iraq invaded Kuwait.
When I forecast the 1999–2000 top in the Nasdaq and the Dow … and the peak in the markets in 2007 … I was still virtually alone, with most analysts and investors thinking of nothing but blue sky for the markets and property prices.
On March 19, 2009, I defied my colleagues predicting that the stock market bottom had already been reached at Dow 6,495, and that the market’s next big move would be a rocket ride to first, 11,000, then 14,000, and then, even higher.
In 1999 I nailed the big bottom in gold and silver – and their peaks three years ago, just 12 days from their highs in September 2011.
I’ve also made many other wild calls including:
- the rise in Asian equity markets and emerging economies in 2004
- the slide in the value of the U.S. dollar since the turn of the century and
- my now infamous call to dump every mining stock that was publicly traded at the sector’s peak in October 2011.
The [above forecasts] are ALL DOCUMENTED and I am very proud of them as they have protected and grown the wealth of tens of thousands of investors.
If I didn’t know better, I’d throw my hat in the ring right now with all those pundits out there who say the economy is not strong enough, so the Dow must crash, BUT, I KNOW better.
The fact of the matter is that the Dow is going to reach 31,000 over the next three years
NOT IN SPITE OF:
- gargantuan federal debts
- political dysfunction in Washington
- the mess in Europe
- the rising geopolitical conflicts all over the globe …
but BECAUSE OF THEM.
I know better because:
- I’ve traveled the world and studied every major market and economic system on the planet for the better part of 36 years
- I have charted how they interact and influence each other and
- I’m an avid student of the history of economic systems and markets.
The fact of the matter is this that if you understand…the powerful undercurrents in the world today, you will be well-positioned to make a fortune over the next few years as most U.S. stocks catapult higher [and I DO understand].
What the Future Holds For the Dow
Once the current pullback in equities comes to an end, here is what you need to know to back up the truck to prepare for Dow 31,000:
1. Collapsing governments in Europe and the U.S. will be just about the best thing that could happen for the U.S. stock market.
I know what you’re thinking: “That’s a pretty bold, almost unbelievable statement. Larry has definitely lost his marbles” but mark my words:
As the huge entitlement programs of Western and Western-style, largely socialist, governments go bust, the private sector will become the recipient of a tsunami of cash otherwise eaten up by the public sector, and that will send stocks into an explosive move higher.
As Western governments teeter and the banking system crashes again — and it will — stocks will be deemed to be a safer place to put your money than just about anything else.
- Banks will not be bailed out in the next crisis [as was the case with] the Cyprus confiscation of bank depositor money last year…
- [Instead,] depositors everywhere will be bailed in.
- [As such,] why keep your money in a bank when there’s no safety to be found and large amounts of your capital will be deemed to be bank creditor funds?!
2. Rising interest rates will be one of the major reasons the Dow and other broad market indices explode higher.
To the contrary of many of the best minds on — and off — Wall Street, rising interest rates are no reason at all to be worried about the stock market, and in fact, are the opposite: Explosive fuel that will drive stocks much, much higher for three chief reasons:
- 1. Rising interest rates are a sign that there is rising demand for money and credit. That’s a positive.
- 2. Rising interest rates are also a sign that bond values are going to be heading down, and quite dramatically. As investors leave the bond markets, they will have to put their money to work in other asset classes.
- 3. Interest rates will rise because of a crisis in confidence in government [as opposed to] rising solely due to a healthy growing economy [as they normally do].
Sounds bad, right? After all, if governments are collapsing and rates are rising as a result, stocks must crash too, right? Wrong. Dead wrong. Below is the reason:
3. There will be a GIANT shift of capital AWAY from the public sector, and BACK INTO the PRIVATE SECTOR.
...[For] proof of all the above just look at the 1932 to 1937 time period and what most analysts are NOT telling you about the Great Depression. Back then:
- U.S. and European economies were plummeting in a depression. [As] unemployment continued to soar interest rates began to climb (for the very same reasons they are starting to rise today) despite central bank intentions to keep them low, primarily because 17 nations in Europe were going bankrupt, defaulting on their sovereign bonds…
- [Even] though the U.S. was the world’s creditor then, its bond markets also came under suspicion. Banks were folding left and right in Europe and the U.S.
- Tens of billions of dollars fled the sovereign bond markets — and the banking system — and went directly into U.S. stock markets.
- Despite the worsening global economy, the Dow Jones Industrials soared 382%from a low of 40.56 in July 1932 to a high of 195.59 in March 1937, all in the middle of the worst depression in our nation’s history.
All of my indicators and studies tell me that the Dow’s 2009 crash low of 6,495 is tantamount to the 1929 crash low in the Dow and that a similar 382 percent gain from that low would put the Dow Industrials just north of 31,000! That’s just over a double in the Dow Industrials. Nice, and something every smart investor should take advantage of once any pullback is over.
What the Future Holds For the Precious Metals Sector
Physical Gold and Silver
Although there may be one more test of the lows, precious metals are bottoming and headed substantially higher too over the next few years. Gold will likely fetch well over $5,000 a [troy] ounce a few years from now and silver better than $125 a troy ounce. That alone will push mining shares through the roof.
The Mining Sector
The mining sector has been beaten up so badly over the past three years, with many miners losing as much as 90% or so of their market cap, that select individual miners will likely spin off gains of 2,000%, 3,000% and even more.
Best wishes, and stay tuned,
You’re not-so-crazy – but definitely unconventional – analyst,
Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.
*www.swingtradingdaily.com/2014/06/16/dow-to-double-to-more-than-31000-mining-shares-to-quintuple/ (Copyright 2014 SwingTradingDaily.com All Rights Reserved)
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