Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | UraniumSeek.com 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

Gold Seeker Closing Report: Gold and Silver Gain About 1%
By: Chris Mullen, Gold Seeker Report

Northern Vertex Files Preliminary Economic Assessment Report for the Moss Gold Mine in NW Arizona
By: Northern Vertex Mining Corp.

Does The CoT Structure Prohibit A Rally?
By: Craig Hemke

Harry Dent’s Gold Prediction Invalidated
By: Przemyslaw Radomski, CFA

SELLING OUT OF PRECIOUS METALS AND BUYING BITCOIN…. Very Bad Idea
By: Steve St. Angelo

The Bitcoin Bubble Explained in 4 Charts
By: Jake Weber

VXX Sends an Awesome Message from Another Galaxy
By: Rick Ackerman

Geopolitical Risk Highest “In Four Decades” – Gold Demand in Germany and Globally to Remain Robust
By: GoldCore

Asian Metals Market Update: November-22-2017
By: Chintan Karnani, Insignia Consultants

Gold Seeker Closing Report: Gold and Silver Gain With Stocks
By: Chris Mullen, Gold Seeker Report

 
Search

GoldSeek Web

 
The Big Deflationary Downwave Quick Reference Guide...

By: Clive Maund

 -- Published: Monday, 20 July 2015 | Print  | Disqus 

We are believed to be on the verge of another deflationary downwave, similar to or more severe than the one which drove the dollar spike – and commodity slump – between July of last year and March, and caused by an intensification of the debt crisis, with increasing capital flight out of Europe and into dollar assets as the EU crumbles. More QE will not save the situation, as it is already discredited and will have no more effect than trying to inflate a tire or rubber boat that has a big hole in it.

It is understood that in this modern age many readers have a very limited attention span, due to time constraints and the tendency to multi-task. For this reason this update is being kept short and to the point. It is intended to make plain in the clearest possible manner the scenario that is expected to unfold in the coming months. So let’s get to it.

The only way to purge debt is to retrench – curb spending and balance the books. Modern governments have sought to avoid this responsibility for years now, by cheating and printing money out of nothing, because they are not subject to the discipline of a gold standard. The result of this is a towering debt and derivatives mountain that is set to bury them, despite their meddling in the markets to keep interest rates at zero to stop the debt compounding. Debt to GDP levels have risen to unsustainable levels in many countries around the world. This is why economies are weakening and standards of living are dropping, and the problem has now caught up with China. We are now caught in a downward deflationary spiral and it won’t stop until the debt is purged or written off. The astronomic magnitude of the debt means that the situation could quickly get out of control leading to a global economic calamity. Few investments will be spared as the liquidation intensifies, and the dollar will be the prime beneficiary of this especially as a torrent of funds will flee Europe as it backslides into chaos.

That’s enough of an introduction, now let’s look at the charts starting with the dollar.

The dollar index chart looks very positive, with it now breaking out upside from a Triangular consolidation that allowed its earlier heavily overbought condition to unwind. Note the strongly bullish alignment of its moving averages. It is now in position to take off and this upleg is likely to be as big as the one that ran from last July to March – or bigger – meaning that it could advance towards 120.

Of course, a big reason for the dollar’s strength is the malaise of the dying euro (the dollar index is made up 57% of the euro), with the bungling incompetent actions of the EU’s leaders in respect to Greece making plain to the world that they are unfit for office, and that the European Union will probably eventually unravel. Having seen what was done to Greece, we can be in no doubt that the leaders of Italy, Portugal, Spain will be considering their options. The euro look set to drop hard as shown on its 2-year chart below.

Of course a strongly rising dollar will wreak havoc on commodity prices, as it did when it rose strongly the last time, from July of last year through March. The commodity index shown below should plunge as shown by the red arrow.

Copper appears to have been marking out a massive top pattern on its long-term charts, and it looks set to plunge to strong support at its 2008 crash lows in the $1.25 area, and perhaps lower. Its COTs are currently quite bullish, so we may see a relief rally at some point. However, its key support has already failed some time ago and it is now very vulnerable.

The oil chart has some similarities with copper, which is because they are both dropping due to deflation. Oil looks set to be particularly hard hit and may drop into the mid-$20’s.

Gold, which has been struggling to find a footing for 2 years now, is expected to be forced into another downleg by another strong dollar upleg, and should drop to the $850 - $100 area, probably nearer to $850.

Silver will crash support and drop towards the lower boundary of its long-term downtrend channel, which means it may drop to below $10.

The scenario set out here is a grim prospect, it is true, because of its implications for many aspects of life, but it will considerably easier if you are on the right side of the trade – and we plan to be.


| Digg This Article
 -- Published: Monday, 20 July 2015 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus

Web-Site: CliveMaund.com



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2017



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer

The views contained here may not represent the views of GoldSeek.com, its affiliates or advertisers. GoldSeek.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, is strictly prohibited. In no event shall GoldSeek.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.