Gold, Stock Markets, & War

Investors ignore cycles… at their peril. When I calmly suggested that a key virus cycle year of 2020 would see a “carpet bombing” of markets, most investors were not listening to the cyclical message of the markets.

Sadly, they were wasting time watching the government try to rebuild the American empire with Fed photocopiers, FATCA thugs, more government spending, no savings for a rainy day, and no serious defensive preparation against germ or physical warfare.

I suggested that approach would fail badly, and of course, it did.

(Click on image to enlarge)

US stock market chart

I’m now suggesting that the 2021 “year of the war cycle” could see an even more ominous carpet bombing of America. I expect the bombing to hit many other nations like the virus did.

Having said that, my projection is for the Dow to rally to major new highs first. While almost half of America’s citizens have no job and GDP has cratered, the extensive use (albeit waning) of the US dollar in global financial transactions allows Fed money printing to push stock and bond markets higher.

What about inflation? Well, money printing inflates what it is aimed at. If money is electronically printed and poured into stock, bond, and real estate markets, that’s what gets inflated.

As the rich versus poor net worth and income spreads widen dramatically, social unrest usually begins, and of course, that’s in play now on the streets of America. 

The government will eventually demand the Fed aim much more of its printed money at Main Street, rather than just at the rich. That’s when serious inflation can happen.

Also, most institutional money managers are still heavily invested in the stock market. Until they leave and the public is left “holding the bag”, the Fed is likely to aggressively print money to support stocks.

The global winds of war have been blowing, and the wind speed is intensifying.

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