Tag Archives: stock market

Last week Obama formally announced that President Bashar Assad and the Syrian government had crossed the “red line” by using chemical weapons against civilians, meaning that the U.S. will begin to send military support to Syrian rebels. Some may question the timing of the announcement – there are certainly reasons to – but as watchers of the financial markets, we must ask, what happens next?

The stock market *could* collapse. Just this past week, Gary Savage, publisher of the “Smart Money Tracker”, called for it to crash “10-20% in the next five days.” Maybe Savage’s prediction will prove to be right. The signs for a crash – whether it’s in the next week, the next month, or later into 2013 – are certainly there. But what will happen, what is happening, and what has always happened is inflation. So how do you protect against it?

The Dow Jones dropped over 200 points on Friday. Weeks from now, we may look back on this as nothing more than a blip on the radar, or perhaps as the beginning of the end. No matter what the case, what truly left some traders “abuzz” on the day was the phenomenon that occurred: the “Hindenburg Omen”.

It has become a beating drum; the Federal Reserve holds its meetings and inevitably someone exits with a proclamation that Quantitative Easing is going to be phased out. As the sole engine backing the stock market’s growth over the past five years, an end to QE could be catastrophic for your stock portfolio. Fortunately for stock holders, it has been one empty promise after another: Quantitative Easing rages on, and the liquidity it has created continues to push stocks higher.

No one can predict the future. The Central Banks can’t. The “experts” in the media can’t. We can’t. But what history has proven is that paper currencies and paper assets can be worth no more than the paper they’re printed on. Gold and silver are real, tangible assets that WILL ALWAYS HOLD VALUE. Central Banks know it. The “experts” know it. (Even if they don’t always admit it.) We know it. You know it too.

Peter Schiff was right in 2007. While many of the other “experts” were feverishly telling you to buy stocks, Schiff was one of the few predicting disaster for 2008. This track record alone should have been reason enough to believe him last year when he first predicted a second financial crisis for 2013. But if you carried some skepticism with the new forecast, there’s simply no denying the latest evidence of the stars aligning.

With the Dow crossing 14,000 and investors seemingly infatuated with the stock market’s latest rally in the last few weeks, gold closed sideways last week and finished at 1,668.25. But before anyone falls too hard for stocks, some perspective may be in order. First, red flags and “sucker alerts” abound as reports surface that insiders have been nine times more likely these past few weeks to sell shares of their companies than to buy new ones. This doesn’t bode well for the long term, not when insider selling usually foretells a drop in the markets. Second, put the value of the Dow today against the price of gold – despite this rally – and the Dow is down since 2009. The moral of the story? An abrupt end to this “sucker” rally could be near. But even if stocks continue to grow, history suggests that gold is likely to continue to outpace them. Keep your eyes wide open.