Dire Predictions from Rick
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Rick has some dire predictions for the future prices of both oil and gold. Do you agree with him?
I don’t know about 4 dollars James (yikes that would be quite the fall) but 10 dollars is not yet out of the question. It may even be likely.
Even $10 silver would be really rough!
If silver gets to $4 people will have a whole other term for it 😉
paper weight.
funny.
Haha Cory, yeah for lack of better terms as Big Al might say. 🙂
+1 Chips. 😉
Good commentary, Rick! A little off topic, but does anybody think Canada will have a negative rates this time next year? I know the fools are desperately trying to revive the economy, but their is nothing to revive. The patient has been in a coma for many a years now and he’s not expected to regain consciousness. Put a fork in it, Canada is done.
I can not say if Canada will have negative interest rates by this time next year because too much can happen in that time. What will be important is Q3 numbers that hopefully show some growth.
The continued drop in commodities is going to only hurt them unfortunately.
More then ever it’s all about Money. Forget Greece, Gerald Celente just got back from Italy and he say’s migrants are pouring into the Italian Boot, from Afghanistan, Syria, Iraq, Yemen, Libya, literally from all over the war zones and The rest of The Middle East. All they want is a chance to survive because they have nothing. Italy has nothing to offer except an escape from violence.
Canada and Australia can’t sell their natural resources because China isn’t manufacturing, and The Europeans are too broke to buy Chinese goods. It all adds up to a deflationary trap that is being kept alive by the few who have the money and power, but they can’t escape the retribution that is on the way for them as well.
Things are globally a mess for sure DT.
Good synopsis DT. your reasoning for why commodities continue to get hit is spot on buddy.
Good interview with Rick A. today. I concur with his thoughts on Oil, that there may be some support in the $50-$51 level, but then I could see a bottoming in Oil down in the $42-$38 zone in the next 2 months (especially if the dollar continues to creep higher). This will obviously keep pressuring the commodity complex and as mentioned in the past, this should give us the 7 year low in the CRB index.
http://stockcharts.com/h-sc/ui?s=%24CRB&p=D&st=2001-01-01&en=(today)&id=p58542092681
If that chart link above doesn’t look right when you open it, just hit “Update” and it should go back to the 2001 – present timeframe (so you can see the 2002 and 2009 lows).
Aside from the little 3 year cycle from 1999 – 2002, 3 of the last 4 commodity cycles were around 7 years. Prior to the 2002-2009 7 year cycle, and the 99-02 three year cycle, there was also a low zone from 1992-93 to early 1999 which was also a 7 year cycle, and prior to that a low in 1986 to that (late 1992-early 1993) which was also around a 7 year cycle.
Here’s a good CRB chart from the great website – Short Side of Long showing how these bottoms in the CRB index have played out in the past:
http://i2.wp.com/shortsideoflong.com/wp-content/uploads/2015/04/CRB-Index-Performance.png
Looking to average down on my NUGT hedge/position.
Gary thinks we may get a several week bounce in the PMs before the next down leg, so that may be a good idea Jason. We’re a little to close to the Nov lows for my tastes, so I’m just watching right now, but if the US dollar gets up to 98 and stalls as he thinks may happen, then I may play JNUG or NUGT myself for the brief bounce.
Good luck to you sir.
I just sold off 40% of my JDST today. Gold will either break-down really bad here or bounce off the prior low. I really hate to assume it will break-down because it is already quite oversold, but I’m not really sure what it will do here.
Agreed Wiseguy. Gold is really oversold, and collectively the miners did put in new lows today. I can see the rationale for a rally, but also with the Fed announcing moving ahead with potential rate hikes this year and flirting with Nov lows in Gold, I am very cautious as it could easily go either direction.
Gold Stocks At Lowest Levels Since Goldmember
Jul 14, 2015 at 9:17 AM
http://jlfmi.tumblr.com/post/124068892045/gold-stocks-at-lowest-levels-since-goldmember
This commodities ( oil ) drop that is coming with cause the junk bonds to tank, and when they tank, so goes the US stock market. Mid September to mid October the plunge should start. I expect we get a rally to new highs before that happens.
That is my line of thinking as well, Chartster. I am completely out of the market as of this moment, though. I’ve had enough of this rollercoaster ride for the time being. And with the bad economic data I expect to come out in the coming months…it’s going to get real ugly out there. Anyhow, going back to work restoring the 1960 Eldorado… my customer is breathing down my neck…..and the wife……..
Very well could happen Chartster. I just think a major decline in the markets will start somewhere other than in junk bonds. I have said it will come from international forces and if China can not save its market and other countries in Europe start to go the way of Greece then watch out.
Not saying that I think having a lot of money in the US markets is a good thing though.
Chris,
I’ve restored many cars back in the day. Lots of work, many hours, but the finish product is always rewarding. Have fun with it! Minus the rust and bondo, of course..
Charster, I’ve been doing it since the late 70s. Still enjoy doing it. It’s a good honest job. The only regret I have is not buying a boatload of vintage rides in the late 70s early 80s when they were cheap. They’d be worth a pretty penny now.
I know what you mean. I’ve owned some good ones. My mid life crisis ride is going to be a new vette with a 58 body. There’s a company that specializes in that. Sweet ride!!
got an 07…with 4,000 miles setting in the garage…….ready to ride….bought new…..great fun for a cheap price……..red, 6speed 400hp.
Nice….! J Long…
My company gave me a 2000 for a year. Went through 2 sets of rear tires.
My wife will not let me smoke the tires…… 🙂
J Long,
Grow a set and smoke em up !!
It’s your car! Git r done!
Don’t take grow a set as bad news. Just spin the tires.
funny….Chartster……….. 😉
Eventually, the final low will be higher than rick’s prediction. Therefore his followers can be locked out of the market.
Rick is bold with his 120 dollar prediction. He has not waffled once in his expectation of this multi-year high and I admire him for that resolve.
Having said that, I think 120 is extreme and will likely not be reached because something is going to break in a big way long before it achieves that lofty number. The global deleveraging and admitted insolvencies are just getting started and even the elites cannot stop this slide.
So looking ahead in a world that is effectively a smoldering heap of bankrupt ruble, I agree with Rick that the dollar is going to strengthen, even when everything tells us the dollar should be weak. But the rapid deterioration of world economies are so profound that the shear power of this wealth destruction renders the dollar as the only game in town. So the dollar will become stronger in fits and starts defying all logic.
The 120 projection may or may not come, but I believe that a dollar at the 110 handle is an almost certainty as the endgame plays out over the next 12-18 months. Time-lines are hard to judge.
It doesn’t take much imagination to project where gold and silver as well as base commodities prices will be if that strong dollar deflationary thrust were to come to fruition.
The dangers in these markets are so extreme, and so deeply embedded in fraud and economic deformation that getting out of this wasteland of corruption in one piece is going to be a miracle in and of itself.
In closing, if you think deflation is raging now and jobs are scarce, just wait until the world sociopathic elites meet in September 2015 and implement the new “World Sustainability Pack” or better known as Agenda 21 that will effect all nations. The Orwellian fencing-in of world populations has started so pay attention and expect the dollar to rule the roost a while longer for all the wrong reasons.
V
Vortex,
You are correct. 120 ain’t gonna happen…!
I do have hopes for the he team, but, let’s see if the sheep wake up.
Chartster,
The ship of turning this construct around in any meaningful way has already sailed.
We had the greatest gift ever bestowed upon a nation and we were too damn selfish, lazy and greedy to keep it. Now we get to look into the depths of hell because America is going to have its Greece moment in due course.
I think 120 could be chicken feed.
Remember that the stock market topped in early 2000 and the dollar topped at the end of 2001 if not the start of 2002. Stock market was already in about its third crash and 9/11 was happening as the USDX topped. Gold was already off its lows.
Compared to 1999-2002, it would not yet be time for the dollar to top.
This isn’t original with me;
perhaps not even the first time said on KER;
but USDX 160 is coming again;
not in a straight line of course.
http://stockcharts.com/h-sc/ui?s=%24USD&p=M&b=6&g=0&id=p23269871333
“There is a secular move in the US$, and it is going to go on for quite some time. When it moved from 80 to 100 on the Dollar Index (DXY) everyone thought the move was over. When you look at the last 20-25 years, it started at around 80 and went to about 160 before it crashed down to 80 again. Then in 1991, it went from about 80 to about 122. He believes we are more in a Ronald Reagan rally rather than a Bill Clinton rally. The top will be at about 160, so we have quite a ways to go. The issue is that Canada is in a real tough place and the Canadian equity market is in a bear market. There are significant headwinds, and we need major structural changes to get us back on course. The good news is that the Cdn$ will help. We won’t see out and out deflation as other countries have, because as the Cdn$ floats, if we get down to a good level for it, it is good for Ontario and good for manufacturing. Feels that about 80% of valuation will be driven by where interest rates go and where the world economy goes.”
StockChase . com – Brian Acker – June 16, 2015
Irwin,
If the dollar was to go to a 160 handle which in-turn would continue to put massive and devastating pricing pressure on the commodities sector, this in my opinion will unleash the mother of all mining operations bankruptcies and even non-mining companies.
In deed the boisterous market commentator and hardcore gold bug Andy Hoffman, who hates the PM mining sector with a passion would be vindicated in spades.
At a 160 dollar, even numerous behemoth miners will surely be going bye bye.
Stay tuned and stay alert.
I tend to agree Vortex. 160 would cause an absolute disaster in global markets and currency fluctuations that would cripple the emerging world holding debt in US dollars. To me 120 seems really high, but I’ve gone on record a few times since March stating that I could see 110 in a blow-off top later this year.
Yes,
I’m guessing that a blow-off top run up could take the dollar to 110 if everything is crashing on a global basis and mass panic in markets have set in and the safe haven liquidity of last resort defaults to the dollar and US Treasury’s.
A dollar at 110 or even Ricks lofty 120 target which I put much less confidence in ultimately makes the eventual dollar sell-off to new lows that much more devastating and destructive from a buying power perspective.
People get too hung up on these numbers sometimes because in the big scheme of things this will likely be a very temporary phenomenon of dollar strength.
Agreed. I see the move up there to 110ish as a parabolic move up, short in duration, and the result of short term panic and safe haven scrambling by people if the markets get wonky, and if the Fed does do a rate hike in Sept or Dec. This would be the point where commodities will be really pressured and create a good opportunity to bottom fish in the quality companies.
Good thoughts Vortex, as per usual.
160 is possible based upon the bullish falling wedge that started at that 160 top, way back in 1985. Whether falling wedge patterns are valid over a 30 year period I do not know – or maybe they work better in a short term patterns (a few months perhaps).
Greece is getting a chance at a little boost of extend and pretend so that crisis can take another couple of years to reach a climax, perhaps as the world economic slowdown takes hold again.
Compared to 1929 we are in similar territory. Germany’s World War I debt was renegotiated in 1929 before the crash amid relentlessly falling commodity prices and rising interest rates. We have not even had the rising interest rates yet but we have had another major unrealistic bailout of Greece in 2015.
Mark Carney at the Bank of England has indicated that UK rates will likely rise at the end of 2015 and end up at 2% in a couple of years. Above that will be enough to smash the economy in my view. Note that he intends to stop at 2%, which is barely half the long term average of 4.5%. However that would probably invert the yield curve as Bob Hoye likes to say. Then as it reverses to steepening you get the credit crisis as low rates tank again. Maybe we need to go through a rate rising cycle before the crap hits the fan so it would extend things out another couple of years.
Then comes the next credit crisis – the big one.
WOW what a prediction…hard to imagine at all. We will see.
Confused, I’m not predicting 160. I’m just commenting on it.
160 is a pipe dream IMO. I think Ricks 120 is a bit far out but who knows.
The dollar over 1.05 is a joke. It Will Not Happen…
If you think 1.05 on the dollar index is a joke then you are not following whats going on in the world very closely.
A high dollar mark will be out of the hands of the FED for the most part. They won’t be able to stop the global capital inflows looking for a safe haven bid.
You won’t see 1.05
Not for years….
OK, interesting. What are you looking at say over the next 24-36 months for highs and lows?
Monetary policy and a new financial system.
The dollar is done for years. Those that think we are hitting 1.20 are delusional. The dollar might hit 1.05, but I doubt it ..
There is no way to execute trade with the dollar more than ” a dollar “.
I wondered if the 2008 lows of $680 gold and $8.40 silver would be possible in this bear market.
I also had a target somewhere near $780 for gold on a long term median line type channel pattern running since 2008 at least.
Did Rick chew on an apple early ion in this interview? There was a nice little crunch!
When silver gets to $4 let me know if we can stop calling this a cyclical bear market.
They are going to sweep the table!