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The unintended consequences of five years of QE are coming home to roost! In May or early June the stock market parabola will collapse…followed by a massive inflationary spike in commodity prices – particularly gold & silver – that will collapse the global economy.
So says “Toby Connor” (goldscents.blogspot.ca/) in edited excerpts from his original article* entitled The Great Inflation of 2014.
[The following is presented by Lorimer Wilson, editor of munKNEE.com and may have 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.]
Connor goes on to say in further edited excerpts:
Over the next 3-4 months we are going to see the public pile into the stock market exactly like they did with tech stocks in 2000, and real estate in 2005.
NASDAQ to Test All-Time High
Make no mistake, this bull market will not be over until the NASDAQ tests it’s all time high above 5000.
Stealth Rally in Commodities Coming
Completing the final bubble phase in the stock market is the first component necessary for the Great Inflation. During this period commodities are going to start to rise in a stealth rally that everyone will ignore because they will be focused on the stock market. As can be seen in the chart below, the CRB has already broken out of its three-year downtrend.
Stock Market Crash Coming This Summer
…When the crash begins the inflation stored in stocks will flow into the commodity markets. This process will be exacerbated as Yellen reverses the taper and doubles down on QE to try and reflate the stock market bubble. This will be like throwing gasoline on a fire, and will drive commodity prices through the roof into the end of the year and probably the spring of 2015.
The Fed Will try to Reflate to No Avail
The Fed is going to make the exact same mistake they did during the last decade. Their easy monetary policy has produced a bubble in stocks just like it produced a bubble in real estate in 2005. When the bubble implodes the Fed will try to reflate. They won’t succeed in reflating the broken stock market parabola, but it will trigger an explosion in commodity prices. The rapid spike in commodity prices will collapse the global economy just like it did in 2008.
Precious Metals Will Rise the Most
Because the artificial and manipulated bear market of the last year has severely damaged the supply side of the market, I expect the gold and silver will be the largest beneficiaries during the Great Inflation of 2014.
By this time next year all of the Chinese/Russians/Indians, etc. who have been scooping up gold over the last year are going to look like geniuses.
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[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.]
*http://goldscents.blogspot.ca/2014/02/the-great-inflation-of-2014.html (Subscribe to GOLD SCENTS by Toby Connor by Email; To subscribe to the premium service, a daily and weekend market update, click here)
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Interesting article, great read. I currently have a few good open positions with great gains, do you think it’s a good time to take the profits? most are us stocks
Stocks – Why not get rid of half of them and that way you will cover both sides of the risk equation.
Until Russia and the West return to a more normal situation, PM’s are looking like a better deal than stock, since PM’s are now even lower than they were just a while ago!
I’d suggest changing the title of this article to:
Stock Market May Collapse In May
Nothing is certain and that especially applies to the value of BOTH stocks and PM’s. We have seen over and over again that the Central Banks and/or Wall Street surprises all of us by puling yet another fast one (aka a trick, like pulling a rabbit out of their hat) that convinces almost everyone that things are not as bad as they really are. If they are successful, and giving them their due, based on their recent tract record, I believe that in May we will see a moderate “adjustment” or some other fancy word applied to the reduction in value of many stocks while the increases in value of PM’s will be referred to as “a slight temporary gain in solvency” or other some such pooh-poohing to discourage investors from looking to hard to see what is now happen behind the “RED” curtain.
Another indication of this “slight of hand” shifting in the values of both paper money and PM’s is what is now happening to Venezuela’s debt and their Gold holdings: https://www.munknee.com/venezuela-crisis-making-take-look/
Said another way, perhaps China (and others) are pulling a VW on the rest of US:
From 12/14/13: https://www.munknee.com/noonan-heres-why-silver-is-so-low-what-to-do-about-it/
Naked Shorts Exposed!
Yes, I agree that the PM market is being manipulated by the Central Banks and their close friends the Big Banks; sooner or later all the things they are juggling to keep the lid on this can of fiscal worms is going to end and then we will se PM’s suddenly restored to there rightful value as everyone scrambles to “fill” the paper trades, which will cause the values of PM’s to skyrocket!
A good example of what may happen very soon is what happened to VW stock when investors were using naked shorts to drive VW stock downward. Then suddenly there was none to be had, (since VW was quietly buying up as much of it as they could get on the quiet) and those not holding physical shares had to pay what was then enormous amounts to settle their accounts, which made VW stock very valuable!
Nice comment. We little people are at the mercy and whims of the centralbanks and banksters
Michael – Thanks.
Remember, “We little people” have a huge effect upon both the “value” of our paper currency and also the “value” of PM’s. If one, then two, then four then sixteen, etc. of us, start changing their “relationship” to the US$ then soon the Government and/or our Central Bankers will be forced to make changes. If people begin to question the “value” of their paper money, especially if they believe that it will soon be changing, those same people will start taking their money out of Banks and that would send a strong signal that even the Big Banks and Wall Street cannot fail to notice.
Hope to read more comments from you and others on http://www.munknee.com