Let me warn you that you may find my commentary here disturbing but, nonetheless, I feel compelled to put this in writing. I believe today, as I did 4 years ago, that we have entered the darkest period that this country has seen since the Great Depression. This has happened because we allowed our country to be controlled by a duopoly that conspired against the American people with the help of this country's news media. All attempts by individuals or third parties to bring this to light are summarily dismissed. The board that controls the Presidential debates, which is run by the Democrats and Republicans, refuses to allow other candidates' points of view to be heard. We have been lied to, robbed and forced to toe the line by govt. agencies that have, through their own incompetence, wasted trillions of tax dollars due to a total absence of oversight. Yet, heaven forbid that a taxpayer fail to file his return or pay his fair share in a timely manner. The IRS will run him into Tax court, have him locked up and then throw away the key! Of course, we can't have a discussion on our political system without bringing up the subject of entitlements! Heaven forbid! I mean, we're all entitled to something from the govt., aren't we? The policies of entitlement have bred nothing but irresponsibility which has permeated the core of our existence in this country. And, you guessed it, the current govt. bailouts are nothing but irresponsibility being rewarded with trillions of tax dollars! If I had to pick one thing that has been most responsible for the current state, this one would get my vote. Ok, enough with the political commentary. Here's my take on the Financial markets.
The Dollar continues on a tear with the Euro, Pound Sterling and Swiss Franc all getting hammered today. Everything points to continued Dollar strength which would lead me to think that Commodities will continue their downward spiral. The fact that the multi-trillion dollar bailouts are eventually going to force the govt. to issue massive amounts of debt has me wondering how long the Treasury markets are going to be able to maintain their lofty prices and low yields. If we see a reversal in the Treasury market a stock market rally could ensue taking the DOW back to the mid-August highs at 11800. One thing for sure, we're probably going to see some common intramarket relationships disappear leaving a lot of investors scratching their heads. This rally in equities will only happen when the Dollar tops out and begins to turn lower. So investors need to keep watching the Greenback for any evidence that a tradeable rally in stocks is in the offing. But we need to address where we are right now regarding the economy. If we continue to see signs of weakness or more evidence that we have entered a prolonged deflationary cycle then all bets are off and stocks will most likely make new lows as we head into the New Year. Also, the fact that we will have the most socialist-leaning President in our country's history taking the reins in January may be ultimate straw that breaks the camel's back. For the last 4 years I've been doing everything that I could to warn people of the financial mess that we now find ourselves in. The President-elect is going to wonder what compelled him to seek the office that he will soon possess when civil unrest forces him to abandon Iraq and pull all of our troops out of foreign lands, in order to bring them home to try to deal with riots and mayhem in the streets of America. If this should actually happen, then the Precious metals markets will skyrocket and outperform all other asset classes over the next 12-24 months as civil unrest here will lead to Global Armageddon. In any event, Gold and the rest of the metals complex should have a place in everyone's portfolio. But I'm talking the physical metal here, not trading futures, options or the ETF's. Gold and Silver coins and bars will be the only thing that will save you if all hell breaks loose and anarchy replaces the rule of law in America.
Dale F. Doelling
Chief Market Technician
Trends In Commodities
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