Today the top trends forecaster in the world, Gerald Celente, warned yes, the stock market is convulsing, but this event is what will cause a worldwide crash that will cause the price of gold to surge hundreds of dollars higher.
“The Trends Journal was first to forecast the Trump rally and first to predict a 10-percent market correction.
What’s next?
What will crash the market? “It’s interest rates, stupid.” No clearer proof is needed then how Wall Street’s fear of aggressive interest rate hikes drove the Dow down 666 points following last Friday’s favorable jobs report and higher than expected wage increases.
The fact is, it was super low interest rates and the Quantitative Easing policy of central banks pumping trillions of dollars of free money into banks, hedge funds and mega-investment firms that fueled the nine-year market rally.
What will stop a market crash? “It’s the economy, stupid.” And the US and global economies are in the best shape since the Panic of ’08 and corporate earnings are solid and are expected to increase as a result of Trump’s tax plans. And much of that money will go into stock buy backs.
However, our prediction of a 10-percent correction was inevitable. The Dow,’ up 34 percent since Trump’s election, is overvalued and over leveraged. By historical standards, price-earnings ratios are nearing the high end of their ranges. Clearly, the sell-off was imminent and volatility will continue until the markets find a new bottom and a sustainable trading range.
TREND FORECASTS:
1. Considering market fundamentals as detailed, we forecast the Trump Rally is at, or near its peak. And, with markets way over leveraged, the threats of a meltdown exist.
2. Further, considering the panic that hit the Street last Friday on the slightest hint of positive economic growth and rising inflation, we also forecast less aggressive interest rate hikes for 2018. And should equity markets continue to dive, the Fed will intervene and ease fears of any sharp rate increases and take required measures to prop up the market.
3. Watch gold, it’s the ultimate safe-haven commodity in times of economic and geopolitical instability. Gold prices would have sharply spiked if the equity markets were in serious danger of crashing. Instead, gold traded in a narrow range, barely responding to the market volatility.
Therefore, as goes gold, so goes the markets.
Beware! If gold prices suddenly spike above the $1,450 range, it will signal serious stock market panic that will drive gold prices higher by several hundred dollars.
Also, should interest rates stay low, gold prices will increase modestly.
4. The Wild “Market Crasher” Card. Among the greatest threats that can crash the currently unstable equity markets is a major geopolitical conflict.
“Market Shock, Mass Murder” is one of our Top Trends for 2018 and it is the wild card that can crash markets worldwide. The three explosive hot spots for conflict include North Korea, Ukraine and the battle lines being drawn in the Middle East.
When war breaks out, equity markets across the globe will crash… along with the dollar, euro, yen, yuan and other fiat currencies. Citizens of the world, gripped in fear, hysteria – and reality – will run for their lives, grabbing what they can carry and putting whatever cash they have into gold and reignite cryptocurrencies as safe-haven assets.
King World News note: Celente makes a great point about the price of gold surging dramatically during serious market turmoil. The gold market had a major spike as the 1987 stock market crash unfolded. Keep an eye on gold.
February 7 (King World News) – Gerald Celente