Gary, for what it's worth and in my humble opinion, if the US is to escape strangulation from its enormous debt it has to devalue the dollar and run the gauntlet of domestic inflation.
Hence, as the dollar devalues, foreign investors will run for their lives particularly into the Euro, Sterling, Swiss franc or Canadian dollar. Some are even running into the SA rand of all places although, with a big gold price on the cards, that may not be such a stupid thing to do.
This flight of foreigners from US dollar denominated investments, as I see it and notwithstanding all the bullish talk on CNBC, has to bring down the Dow and perpetuate the bear market. Eventually, it is possible that the US stockmarket might be seen as a hedge against domestic inflation, like property is at the moment, but who can tell at this stage?
However, there is another problem and that is the price of goods which are imported into the US, as most goods are, will rise considerably. Wal-Mart and other retailers are not going to like that and the valiant US consumer, on whose head the world economy rests, is going to have one helluva headache.
BTW, I did not congratulate you for your correct "pennant" forecast when POG was below $225. When it broke out, as you anticipated, it certainly broke out. |
