muses of the moment

December 31, 2009

Martin Armstrong’s 2010 Predictions

Update December 29, 2010:

Since we are nearing the close of 2010, groovygirl thought she should revisit Martin’s 2010 predictions. He is on target.

(For Martin Armstrong’s 2011 predictions, click here.)

The USdollar has gone up, but not past 88 on the good days. We are ending the year closer to 80. Martin talked about volatility in the dollar (in his Jan. 2010 update) and we certainty have seen that.

DOW is still in Martin’s trading range for 2010, not able to break through the 11,800 resistance level, ending the year at 11,577.

Gold is up from $1100 in December 2009, ending the year at $1412. He called a very good year for gold, and it was. Nice!

Real estate still in freeze-frame since many defaults are unrealized in the market. New-starts are way down and the average sale price is down 30% from the 2007 peak and predicted to continue to fall next year. For the long-term real estate outlook, Martin calls for a low in 2012, and short rebound in 2015, and then a slow steady decline into 2033.

Way to go, Mr. Armstrong!

Update: June 10, 2010: since we are coming to the half-way point in 2010, groovygirl thought she should revisit Martin’s predictions. So far, he is on target.

The USdollar has gone up, but not past 88 on the good days. Martin talked about volatility in the dollar (in his Jan. 2010 update) and we certainty have seen that. If the euro recovers in the next 6-12 months, we could see the dollar fall very quickly. The dollar is up because it is the least worse of the global fiat currencies, not because it is stable.

DOW is still hovering around 10,000-10,500.

Gold is up from $1100 in December 2009, currently battling at $1200, expected to go up much more before year-end.

Real estate seems to be in a freeze-frame, and new-starts are definitely down.

And a round of applause for Martin Armstrong!

Actually, Martin Armstrong hasn’t made any predictions for 2010. But he has mentioned some “if, then” statements in his last few letters of 2009. Statements in quotes are from Martin Armstrong’s letters.

Let’s review.

DOW-neutral

“A close above 10,800 before year-end signals new highs sooner rather than later. A 12,500 resistance in 2010.”

We have not reached 10,800, only around 10,500, so the market will go along as it has for a while.

“DOW predictions from Fall 2009:

  • If DOW closes above 10,800 before year-end, inflation is coming faster than expected.
  • DOW below 10,800 is a neutral indicator for 2010.
  • Two yearly targets for yearly crisis are 2011-2012 and 2016.
  • DOW resistance is 11,800 and support 8,800-8,300.”

GOLD-up

“If we close December above 1033.90 per ounce for gold, 2010 looks very good for gold. We are closing the year at around $1100, so gold looks good next year. We need to break $730 to break the trend. There is major support at $800.”

Click here for the Gold $5,000+ letter. The last 3 pages are very informative!

He is more specific for the time period between now and 2012. “Watching the gold price for the next 2 months (this letter was on Nov. 12, 2009) will tell us if we should expect an up-trend in April 2010 or October 2010.” Because of the rapid rise in gold since that letter, although we have retraced, April 2010 is looking good for the next move. We will have to see what happens. Anything can happen within the long-term trend in gold in this unstable economic environment.

Gold is what investors buy when they are not confident in the economic climate. Groovygirl suspects that hedge fund and pension fund managers that have not purchased gold/silver in 2009, have it on the list to buy in 2010 at some point. This may drive price.

Martin sees the possibility for $5,000 gold by 2015. If that is the case, gold could rise in 2010 on its way to that number. But remember, expect volatility in the gold market, do not day-trade gold.

REAL ESTATE-neutral-falling

Martin is calling for a temporary bottom in 2012 and a rise in 2015. Then a slow, very bad decline into 2030. This is a 26-year decline in real estate. Not pretty. So this means that the housing market is not recovering and residential and commercial real estate will still be under pressure in 2010. This pressure is probably reflecting the continued frozen credit market.

Click here for Martin’s letter on the Real Estate cycle. (Real estate information starts on page 8 with a chart.)

DOLLAR-falling

Back in May 2009, Martin said:

Martin suggests from the graphs that the USDollar continuing to close in the range of 81-82 for the rest of the year would signal a stable dollar until 2011. “However, if the USD closes consistently below 79, the dollar could reach a crisis point earlier than 2011.” The dollar has jumped the last month, but it is still below 78, so the dollar is under extreme pressure for more devaluing in 2010. He also notes that gold could rise significantly as the only viable option to the USDollar. Update: January 21, 2010, Martin has released a letter on the floating currency system and USDollar predictions. Click here (last few pages have specifics). His conclusion, extreme volatility and then a currency crisis in the USDollar in 2015.

groovygirl’s conclusion

Mainly, more of the same in 2010. We will see if Martin is right. Groovygirl will keep a look out for Martin’s next letter to see if there are any updates/modifications to the information presented here.

This information is not to be used to trade short-term and groovygirl reminds you that you invest at your own risk. This is the information that groovygirl is using to prepare her investments for the coming currency crisis. It lets her know how much time she has to prepare and nothing else. The time to trade was 3 years ago, now it is time to preserve the purchasing power of your savings/capital/retirement.

Side musing: click on the Martin Armstrong tag to the right to view all the posts about his letters. There are links to all the original letters under moregroovyresources.

Click here for Jim Sinclair’s thoughts on all the “bull market” talk at year-end.

John Williams’ latest update from shadowstats.com (you pay for the detail), but here is the headline:

- Tumbling Real M3 Promises Intensified Depression
- Major Double-Dip Downturn Should Be Obvious by Mid-Year 2010

December 30, 2009

Project Mayhem

Project Mayhem has a good weekly sum-up. I especially like the detailed article about how the FED is covertly monetizing debt. This will not end well.

Click here.

December 29, 2009

Alf Fields’ Gold Predictions

Filed under: Gold and Silver Investing, Hyperinflation, Precious metals — Tags: — totallygroovygirlfriday @ 1:04 am

As you may already know, Alf Fields has decided to stop writing his gold predictions. This is his last one from November 2008. Groovygirl is using this as a capital preservation tool, not a trading tool, until I see something different. We are currently in major wave 3 up.

Click here  for the link.

A snippet:

Assuming that the $699 low on 23 October 2008 turns out to be the actual low point of the correction, and that remains to be proven, then we can conclude that we have seen the low point for Major TWO. That will allow us to update my original “back of the envelope” template to much higher levels, as follows:

Major ONE up from $256 to $1,015 (actually 4 times the $255 low);
Major TWO down from $1015 to $699, say $700 (a decline of 31%);
Major THREE up from $700 to $3,500 (a Fibonacci 5 times the $500 low);
Major FOUR down from $3,500 to $2,500 (a 29% decline);
Major FIVE up from $2,500 to $10,000 (also a 4 fold increase, same as ONE)

Once again, you can pick your number for the gain in FIVE and multiply it by $2,500. The numbers become astronomical and can really only be possible in a runaway inflationary environment, something which many thinking people are suggesting has become a possibility as a result of the actions taken during the current crisis.

Groovygirl must warn you, do not day-trade gold. Buy on dips and hold for the coming currency collapse. If you are going to trade during a particular wave period, use only 1/4 of your invested allotment, no margin, and be willing to lose it. This is not the time to trade, it is the time to preserve the purchasing power of your savings.

Click here  for Alf Fields’ latest commentary on hyperinflation.

$10,000 may seem like an incredible price. Groovygirl is taking it one step at a time.

First, Jim Sinclair is calling for a high of $1650, and claiming he could be wrong (or it will go much higher). I agree, $1650 is in the bag at this point. So, if you buy at $1100 now, at $1650, a gain is guaranteed.

Then Martin Armstrong is calling for $5000. So far, Martin has been on target, so I would say $5,000 is a real possibility. That’s a huge gain when buying at $1100.

But $10,000 means that the USDollar will be worthless. This is a real possibility. The FED (and every other central bank) is still printing money with no end in sight. Some sort of currency collapse is coming.

If you can not afford gold, buy silver. It may actually do better anyway.

December 28, 2009

More information from John Williams

Mr. John Williams with shadowstats.com  recently released an updated version of his Hyperinflation Report. You have to subscribe to get the updated version (well worth the money, I get no compensation for saying that), but here is a link to a Fairfield County Weekly interview with John about that recent report.

Click here.

Here are groovygirl’s suggestions for preparation for this period. First, don’t panic, this is just a cycle, it will end.

December 26, 2009

How do I know if my bank is safe?

Filed under: Bank bailout, FDIC, Safe banks, The Banking Crisis — totallygroovygirlfriday @ 12:23 pm

You don’t…..

It is very unfortunate that the US government is allowing banks to completely disregard general accounting rules and basically cook their books. It makes it very difficult to tell if your bank is next on the FDIC hatchet list. Even the professional investors can’t tell.

Here are the 3 lists I go by. I cross-reference these lists and make sure that only one (or none) of my bank accounts are on these lists. I make sure that all my bank accounts are covered by the FDIC. I make sure that all my personal and business money is in at least 3 different banks, so if one goes down, I have access to money to live or run a business. Three banks were closed, not bought on December 18, 2009. That means the depositors are waiting for a check from the FDIC for their money. I am sure that wait was short…for now.

Note: even though the big 5 banks that took bailout money are not on these lists does not make them safe. It is groovygirl’s opinion that one of the 5 will be set up as “the fall guy” in the next crisis and will be loaded with dud mortgages (commercial and residential) and imploded by the government. Right now, I would bet on Bank of America. Could be Citibank or Wells Fargo. It will not be JP Morgan or Goldman Sachs.

Bank list #1 from calculatedrisk. (I think the link is fixed, if not try the main website, click here.)

Bank list #2 from bankimplode-a-meter.

Bank list #3 from bankimplode-a-meter (by commercial real estate exposure only).

Banks loaded with commercial real estate will be very vulnerable in 2010.

FDIC failed bank list.

The FDIC has over 500 banks on their watch list currently, but they aren’t telling us who they are. You have to infer, which is what these lists are doing. It is highly likely that at some point in the next 4 years, these banks will close or be bought by another bank. The unofficial number of banks that should be on the list…..1000. The collapsing US banking system is a slow train wreck for the next 10 years. The only thing that the FDIC is doing is trying to control the implosion so as not to panic the public. At some point they will lose control of the situation.

The US banking system has completely changed (imploded) and no one made an announcement.

Side musing: if you would like to hold your money at a small local bank. Here is a great site with a search by zipcode.

December 25, 2009

Investing cycles

Investment Cycles

Investing and business cycles are very interesting. I have graphed several different cycles. (A little crude, I know, I did this a while ago). These cycles are general business cycles, not for a specific investment. You will notice that they all bottom in 2014-2015. These are not Martin Armstrong’s cycles or his Confidence Model, But Martin expects the beginning of a severe leg down around 2015 as well.

This will be the tough time. This is the time to prepare for. This is the time to buy assets cheap.

Martin’s Confidence Model or the sentiment of investing is different from if it’s a good time to invest looking at the numbers. That’s one reason why Martin Armstrong is right all of the time, his cycles take in to consideration investor confidence or “feelings”.

Groovygirl believes that the general conditions will be so bad in 2014-2015 that it will affect investor confidence for years after. However, that is probably the best time to purchase assets cheap. Investors will need cash, and so they will sell. Debt will be scarce, so capital (or gold) will be king. Baby boomers will sell their assets at any price to live. I believe this process will continue until 2018-2030. This will not be a deflationary depression, but a hyperinflationary depression. Prices so high that economic investment and true growth stops.

December 24, 2009

Misc. news and links for your consideration

Click here for US block of China’s purchase of NV gold mining company.Very interesting. Apparently, China owning an American gold mining company is a security threat.

Click here for Jim Sinclair’s latest radio interview on gold and the dollar. Very good, listen twice or three times. All you need to know is in this interview.

Click here for Jim Rogers and Marc Faber thoughts on the coming crisis.

Click here for an interesting look back at the stock market in the last decade. It was the worst market for investors…..ever. We are in the winter cycle of the K-wave. Invest in assets that will keep their purchasing power in the next 10 years…..precious metals and commodities.

Click here….Project Mayhem on zerohedge (.) com talks about 2010, food, and gold.

Click here…..just a reminder of the reset of mortgages coming down the pipe. The real estate industry is not in recovery. I have created other posts dealing with this huge issue headed our way in more detail. In addition, there are 1.7 million homes sitting on banks’ balance sheets waiting for the foreclosure process.

Side musing: 7 banks took a dive last friday. The interesting thing is that 3 of those banks had no buyers. This will happen more. Make sure your savings in the bank is FDIC insured and that you have your savings in at least 2-3 banks. We are now reaching a point where banks do not want to buy other banks cheap. The FDIC will have to buy them. At this point, the FDIC will start to drop some serious money to protect depositors. The last step will be giving depositors US Treasuries for their money. This is a slow train wreck. The American banking system is collapsing, just like it did in 1930′s, just slower, and the media will not cover it. The result will be the same. Use this time to protect yourself, do not think that the banking system will recover. Click here for the “real” bailout plan from zerohedge (.) com

December 23, 2009

Martin Armstrong’s latest letter dated December 15, 2009

Click here for Martin Armstrong’s latest letter entitled, The Decline of the West: Has Society Come to an End? (18 pages) dated December 15, 2009

Long view look at Western Civilization. I will comment later.

Side musing: If you are interested in Martin’s latest battle for his freedom, click here, several papers available.

December 22, 2009

New data from shadowstats.com

John Williams from Shadowstats.com has created a new free page with alternative data, graphs and explanations of how he arrived at his data.

Click here. Bookmark this page so you can refer to it often.

Next year when food rises and the government “excludes” food prices from the core inflation number, you can know the real inflation number. When the real calculation does not make the government look good, they change the formula. The graphs will show very clearly exactly when they modified the formula. Old trick used by each political party.

This one of the sites I visit regularly (and I subscribe for the good stuff) to navigate this crisis. Very good information there. There are older articles that are free, I highly recommend reading anything on the site.

December 21, 2009

Gold at $5000 is a given

Filed under: Dollar Crisis, Fiat Currency, Gold and Silver Investing — totallygroovygirlfriday @ 7:24 am

From John Williams at Shadowstats.com, inflation-adjusted gold is over $6,000. If gold goes into a bubble or we have a global currency crisis, the sky is the limit. But for now, focus on these numbers for investment. Gold at $6,000 means inflation in prices and devalue of the dollar.

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