As This Chart Clearly Shows, Stock Will Crash

By Dominique de Kevelioc de Bailleul

Harkening back to the Charles Nenner’s interview on Fox’s Bulls and Bears of early May 2011, his prediction of Dow 5,000 by the close of 2012 stood back then and stands today as a bold call.

But, here’s why stocks are very vulnerable to a Nenner crash scenario and why, even in the absence of a false move by the Fed, stock will most likely decline hard anyway.

A look at the Baltic Dry Index (BDI) suggests either the global economy is about to soar, or Nenner’s Dow 5,000 call could be on the money, or close to the money.

As of Sept. 12, the BDI stopped short of one point of its all-time low of 661, a level not seen since the S&P 500 crash low of 666 points, during the height of the Lehman crisis of Mar. 9 2009 [see graph, below].  But as the S&P closed on Sept. 12 at 1,463, a 130 points, or so, off its all-time high set during the second half of 2007, Bernanke manipulation of stock prices has set equity investors up for a fall—a very big fall.

Stock prices, which many regard as a leading economic indicator, need to explain, then, first: why have there been so many stock market crashes?  Did, suddenly, everyone change their minds about the economy and its health to deliver corporate profits?  And second: if the gold and silver markets, bond market, currencies markets and commodities markets are obviously ‘manhandled’ quite frequently by the Fed, why not stocks?  Why are stocks sacred cows of the Fed’s deception racket?

Economic, export and labor data, which show the U.S., European and Chinese economies either collapsing, in the case of the U.S. and Europe, or rapidly slowing, in the case of China and its Eastern satellites, serve as an underscore to the BDI’s low levels.

Just as the Fed used Morgan Stanley to prop up credit through the credit default swaps (CDSs) market as well as enlisting JP Morgan to suppress the price of PMs, it’s most likely that the Fed has buoyed stocks through the purchase of S&P futures via the NY Fed’s Exchange Stability Fund (ESF).

And here’s where it gets interesting.  The U.S. dollar broke through 80USD support rather easily this week, adding yet another negative for owning stocks.

At some point there will be an evaporation of the multi-year nonsensical mantra: that there is a ‘risk on’ trade and it means, buy stocks.  Instead, it’s more likely that a falling dollar against its rivals will turn out to be the foreshadowing of a crashing stock market and a soaring gold price.

The gold price did take a hit leading up to the Lehman bankruptcy of 2008, but at that time investors had not been prepared for the initial shock of the prospect of a global meltdown.  Gold had since recovered long before the crash low of 666 in the S&P was set on Mar. 9, 2009.  At the nadir of the S&P crash, gold was trading back up near its all-time high above $1,000 per ounce.

Today, however, there’s too much talk, evidence and time passed since the fall of Lehman to catch alleged ‘smart money’ much off-guard again.

From the looks of the gold chart, today, the buying on the dips to snag a better gold purchase before Armageddon arrives suggests that gold will not sell off during a crash in stocks; it will, instead soar in price, taking the number of ounces to buy the S&P to new post-1981 lows.

Many predictions of an October Surprise swirl the Internet, a stock market crash may well be that surprise, but the catalyst for the crash may come from anywhere—maybe war, as Nenner had predicted in May 2011.

No Time Left, Gold & Silver to Go Sky High

By Dominique de Kevelioc de Bailleul

Either something huge is coming to the financial markets, or something huger, or even huger yet lurks.

Consider the following, though not close to being all inclusive of the warning signs riddled throughout the global geopolitical-financial landscape.

  • George Soros dumps stocks and loads the boat with gold
  • John Paulson has nearly half his portfolio invested in gold
  • PIMCO recommends gold
  • Chinese importing record-high shipments of gold
  • U.S. Mint sold 191 times silver ounces to gold ounces for 1st week of Aug.
  • Spanish bonds drop nearly 200 basis points within two weeks
  • Baltic Dry Index makes fresh all-time lows.
  • The German, Dane and Dutch people balk at PIIGS bailout
  • U.S. and China economies are rolling over; Europe in depression
  • Israel’s allegedly insane PM may trigger WWIII with Iran
  • Invasion of Syria likely
  • U.S. government preparing for revolution
  • Lyndon La Rouche says threat of nuclear war the highest since Bay of Pigs
  • Rule of law unofficially suspended in the United States
  • Gun sales and “prepper” industry go vertical

And all of those troubling events, and many more, are unarguably traced to a coming collapse of the U.S. dollar.  The world has been dependent upon the dollar for trade and banking reserves for 68 years, and it’s removal as a working global exchange vehicle cannot lead to anything favorable, financially or politically.  History tells us so.

Adding to the chorus of dollar collapse prognosticators comes the folks at Charles Nenner Research Center, an outfit that’s been on a long winning streak of successfully predicting with astounding accuracy the cycles of the gold market, currencies and equities.

Nenner warned of an intermediate top in gold as it crossed $1,900 and not to expect anything too troubling for the euro during drama surrounding the crisis in Greece.

Though not as well-known as heavyweights John Taylor of FX Concepts or the parade of guests of Eric King’s King World News, Charles Nedder’s work deserves a fair amount of attention.

Though his demeanor on camera appears somewhat awkward and unpolished, the man who frequently wears a yamaka on air has outshone the best analysts of economic and market cycles.  He doesn’t mince too many words and gets to the point rather quickly during his interviews.

Speaking with Financial Survival Network host Kerry Lutz, managing director of Charles Nenner Research Center, David Gurwitz, says Nedder’s research indicates that gold should easily go to, “for sure, $2,100, $2,500” per ounce as the world begins to scramble out of the U.S. dollar—the world’s reserve currency that, he predicts, will collapse within 15 to 18 months.

“Gold is going to $2,100, $2,500 and silver should go back up to $49 . . .” says Gurwitz.

Moreover, Gurwitz says Nenner expects a strong euro against the dollar in the coming year, or so—a prediction that’s also consistent with other extreme dollar bears, such as Europacific Capital’s Peter Schiff and ShadowStats’ John Williams.  Both Schiff and Williams see 2013 as the turning point in the dollar’s relative strength against other major currencies.  And all three forecast a dollar collapse within two years to 30 months.

“Our dollar should fall apart in about 15 to 18 months, which is just going to create a whole mess of things,” says Gurwitz.  “And the euro will be the currency of choice, which it is now, believe it or not.  And he [Charles Nenner] has been saying to people for a while, ‘don’t short it; don’t short it; don’t short it’ and he’s been right.”

In March of 2011, Nenner told Fox’s Bull and Bears the DJIA would drop to 5,000 and that war would break out by the close of 2012.

In May of 2012, Nenner told Bloomberg if the weak nations of the eurozone left the supranational currency, the euro would take over the role as the safe haven currency, which suggests, maybe, that a resolution of the global financial crisis will include some, or all, of the PIIGS leaving the common currency by 2014.