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Newsletter - Edition 298 - 08 April 2012
By Christopher Laird



Some of our best predictions in the last year...Gold USD CRB Silver DJW and Dow

Continuing from last week's comments on the DJW appearing peaky, while the Dow also is weakening. We suspected a near topping of both of these and so far (although markets are kind of on a holiday mode) this is panning out as we predicted...



It is also interesting to note that we called the gold peak a while back when it neared $1800 again, and it crashed to the $1600s...quite possibly gold was telegraphing the weakening world economy as we stated then, and the markets are now about to react to this?



We predicted a USD rally April 25 2011, the next week the USD rallied and silver crashed. Same prediction stated silver was in a big bubble and will probably crash.



Fall of 2011 we predicted gold to range from $1500 to $2000 for 2012.



We have a still open prediction that the Euro will test 1.15 USD but the debt crisis in the EU is so severe the CBs appear to be holding the Euro up to prevent more losses in the combined Bond and FX markets for the Euro thus supporting the bonds.

EU debt situation

...is highly deflationary in general and corresponds with the weakening China construction boom. The CRB fell accordingly as we stated right after the China apartment boom busted, starting in Shanghai as I recall but spreading all over China.

Mid-East situation

Both the US and Russia and China have elections or new leadership decisions coming in late 2012 and 2013. In the background of this we know the entire Mid-East power structure was destabilized in this 'Arab Spring' rebellion of the last year, and Iran continues to sabre rattle, while Israel is talking seriously about having to do something about Iran's potential atomic bomb, even alone if necessary. The US and Russia have moved forces around the region, as China repeatedly states they do not want Iran attacked, and China and Russia have huge energy contracts with the Mid East energy producers such as Iran and as I recall Saudi. The stakes of a war there are very very high for all concerned.

No doubt if a war broke out in the ME, say over Iran, especially if Israel gets involved, oil prices would probably skyrocket, and depending on how long this war lasted or on the unpredictable nature of such a war, oil could hit $150 to $200, especially if the Strait of Hormuz was closed for whatever reasons. The last time there were major hostilities there (with Iran and Iraq attacking ships) oil tankers found themselves often unable to get insurance (of course).

With the world economy pretty much seriously depressed, high energy prices would be a kind of last straw on the camel's back, and world GDP would start to plummet. If you think the bank crisis was bad with the Lehman mess and the 2008/9 stock crashes, imagine what an unpredictable war in the ME could do! And what is worse than contemplating a US Russia China conflict starting in the ME and possibly drawing in Nato? The risks are incalculably bad for everybody.

There are some prophetic relationships in this scenario, but I have found the prophecies to be something that can only be interpreted after the fact in many cases. The one that might fit the most was one where Israel would have to stand alone against the world. The rest of the Christian prophecy scenarios are not specific enough in my view to ascertain who exactly would do what, and I find it a little disturbing to have  been following some prophetic bible commentators trying to like predict this actually naming countries and even timelines! I have studied bible prophecy for decades casually, and I have yet to see a clear enough picture.

It particularly disturbs me to read about some US religious groups saying Iran has to be attacked for this or that reason, and weighing in on stuff that is on the verge of being plain irresponsible. There is no doubt in my mind however, that with Iran's outrageous sabre rattling against Israel, them getting atomic bombs would be a potential nightmare for all the countries in their sphere of influence, and for example a likely atomic arms race in all those countries, as the Saudis have repeatedly warned. Iran has been well known to have been trying to destabilize many countries in that region well before this 'Arab Spring' thing appeared out of nowhere.

Additionally, the proliferation of communication networks is making things very unpredictable. (Like social networks with cell phones etc.). Populations have always been susceptible to mass movements and contagion, but now they spring up and proliferate like mad. Unpredictability is now a major assumption. The social networks can flock and appear and disappear like flocks of bees or birds or locusts or you name it (herd behavior). It's a very strange phenomenon and rather new these last say ten years. No doubt all the governments find themselves either fighting with this or trying to control things. That might be a rather hopeless endeavor. Who can say. One prophecy that  I think is related to this is the one of the raging seas, as seas are often related to populations, and that chaos would appear. This could be related.

It is most likely that gold would skyrocket, and in such a  Mid-East war scenario could even exceed $2000, we made predictions gold would range $1500 to $2000 in 2012 - sans a ME war. For all these reasons, we are basically a hold on gold (which is our philosophy anyway as we don't believe gold is so much an 'investment' not having any interest for example, but is savings and security and should be considered like having a rainy day fund. The fact that gold is rising in price steadily merely supports that idea).

Copyright ©2011
Christopher Laird
Editor in Chief