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Is Gold Really Going To $5,000? My Answer Will Shock You

I have very little respect for Peter Schiff. His predictions and timing in the past have been notoriously wrong. Plus, from what I have heard his clients are losing a lot of money. With that said, his call for Gold $5,000 (see the article below) might actually hold water. Believe it or not, his prediction somewhat matches our forecast.

The macroeconomic setup for gold today is very similar to what we have experienced back in 2007 when the gold price ran up from $600 an ounce to over $1,800 an ounce over a 5 year period of time. Are we in for a repeat? I believe so.

As per our mathematical and timing work we are about to enter a sever bear market that will last between 2014-2017. With the US Economy in deep recession, the FED will be looking at any possible avenue to re-inflate the markets and flood the system with more liquidity. Not tighten. As you can imagine, collapsing equity markets and loose monetary policy by the FED are great drivers for Gold. As such, we wouldn’t be surprised to see Gold between $4,000-5,000 over the next 3-5 years.

Just as a quick note. Stay away from Crazy Perma Bears (like Peter Schiff) who expect an outright stock market collapse and the DOW 1,000. Based on our timing and mathematical work it’s not going to happen. Not even close. If you would be interested in learning exactly when the bear market will start (to the day) and its subsequent internal composition, please CLICK HERE

gold investwithalex

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Is Gold Really Going To $5,000? My Answer Will Shock You  Google

Market Watch Writes: Peter Schiff: Reckless Fed may push gold to $5,000

SAN FRANCISCO (MarketWatch) — Peter Schiff, chief executive officer of Euro Pacific Capital, has been known to make forecasts outside the mainstream, and his long-running belief that gold has the potential to hit $5,000 an ounce is no exception. Prices, after all, are struggling to get a grip on $1,300.

We caught up with Schiff to ask him how gold, a big disappointment for commodities investors last year, gets back its groove. Last year, gold futures GCM4 +0.79%   and heavyweight ETF SPDR Gold Trust GLD +0.59% lost 28%, breaking at least eight years of annual gains.

First off, Schiff’s gold forecast isn’t brand new. The author of “The Real Crash — America’s Coming Bankruptcy” has talked about the possibility of gold hitting $5,000 or higher since at least 2011, when prices for the metal topped $1,900 in intraday trading.

Schiff reiterated his call on the potential for $5,000 gold and beyond during a heated debate with Paul Krake of View from the Peak onCNBC’s “Futures Now” episodeposted on April 15.

In an email interview with MarketWatch this week, he offered his thoughts on exactly why he expects gold prices to continue to climb and under what circumstances, what it would take to change his bullish outlook on gold and whether prices for the metal have already hit bottom this year.

Here’s MarketWatch’s full email interview with Schiff that concluded Wednesday:

Q: Before this year began, what were your expectations for gold prices and how does that compare with the metal’s performance year to date?

Schiff: I thought that the selloff in 2013 was completely out of touch with reality, so I expected the price to rise this year. In this, I was virtually alone in the financial community. Just about every major investment house had predicted even more losses for gold in 2014.

So far this year, gold is the best-performing asset class, but I think the pullback we have seen over the last few weeks is just another indication of how much negative sentiment remains. Ultimately however, the fundamentals will prevail. The Fed will keep printing [dollars] and gold will keep rising.

Q: In a recent interview with CNBC, you said the Federal Reserve’s quantitative-easing program will push gold to $5,000 an ounce. Could you explain that a bit further? What’s your time frame for that forecast? [Watch: Gold bear takes on bug: ‘You’re miles off base’]

I believe the consensus expectation that the U.S. recovery is real and that the Fed will end its [quantitative-easing] program and normalize interest rates is wrong.

Over the past few years the Fed had become [a] serial mover of goal posts, delaying the decision to end stimulus more than anyone would have predicted. When the Fed has to admit that its forecast of a sustained recovery is wrong, it will come to the aid of a faltering economy with even more QE. When that happens, gold will rally.

Last year’s selloff was based [on] the expectation that a strong recovery will lead to tighter monetary policy, which would then undercut the reason for buying and holding gold. That is a false assumption.

Q: Could you offer your thoughts on other factors you see as most influential to the gold market this year, including China?

A renewed weakness in the dollar and strength in oiland other commodities will add to gold’s appeal during 2014. Also, any major geopolitical concerns, particularly if there is a deterioration of the situation in Ukraine, will add to gold’s appeal. I also expect renewed physical demand from emerging markets like India and China.

The World Gold Council recently forecast that Chinese gold demand will rise 20% by 2017 from the current level of 1,132 metric tons a year.

Q: What might alter your bullish outlook on gold?

Gold would certainly be hurt if the Fed surprised the markets by actually ending QE and tightening policy. But that is very unlikely to actually occur.

Q: What would you say to investors who are discouraged by gold’s performance so far this year? (Futures are prices up around 7% year to date, but only partially making up for last year’s plunge.)


FactSetEnlarge Image

Be patient. Many investors in the 90’s believed that gold was a dead asset class. But in the 10 years from 2001 to 2011, gold increased almost 900%. The moves come in waves.

Q: With prices currently under $1,300 an ounce, have prices hit bottom for this year? Is gold a bargain at these levels — is it a good time to buy now? Please explain.

Most likely prices have bottomed, as too many speculators are looking for lower prices. The fundamental case for gold has also never been stronger. From a gold short seller’s perspective, this will prove to be the equivalent of a perfect storm. Their losses will be severe. [Read about gold contrarians saying it’s time to start buying.]

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Why Is Obama Administration Desperate For War? Disturbing

I continue to be amazed and dumbfounded as to what exactly the US is doing in Ukraine. The situation that was a non issue just two months ago has now escalated to a point where there is a real possibility that the US and Russia might somehow end up in a direct military conflict over an irrelevant nation (no offense to Ukraine) that is over 6,000 miles away from an American shore. WTF?

Also note, the EU has backed away to sit quietly in the corner as the US and Russia get closer to tearing Ukraine into little pieces. Should there be a direct conflict with Russia, the EU economy will collapse in short order without Russia’s natural gas. Now, let’s take democracy, freedom, rainbows and unicorns for the Ukrainian people BS off the table. Here are the real drives behind Ukraine and all of them lead back to the White House, not Kremlin.

  • The Obama Administration is desperate to get back at Putin after Putin played Obama like a cheap flute in regards to both Syria and Iran.
  • With wars in Afghanistan and Iraq are now over, the US Industrial Military Complex needs a new enemy. The bigger the better.
  • NATO expansion and warmongers in Washington need something to do.

Anyway, here is the latest and what you need to know as we get closer to war. 

If you don’t believe the markets will react to an actual conflict in Ukraine in a wildly negative way,you are about to lose a lot of money. 

ukraine conflict

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Why Is Obama Administration Desperate For War? Disturbing  Google

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Stock Market Update. April 24th, 2014. InvestWithAlex.com

margin debt2 investwithalex

A volatile day with the Dow Jones up 0.1 points (0.00%) and the Nasdaq up 21 points (0.52%).

The chart above (courtesy of Elliot Wave) contains everything you need to know about the state of today’s stock market. In a nutshell, today’s stock market is being driven by excessive levels of speculation with a smidge of margin debt.  Well, a record $178 Billion of margin debt to be exact.

While we have talked about margin debt before, this chart drives the point home. Most investors have overextended themselves at exactly the wrong time (as they always do). With margin debt levels being substantially higher than their 2000 and 2007 stock market top counterparts, the near term outlook for the stock market is anything but bright.

This is further confirmed by our mathematical and timing work. Again, our work shows a severe bear market between 2014-2017. When it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning exactly when the bear market will start (to the day) and its subsequent internal composition, please CLICK HERE

(***Please Note: Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). 

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Stock Market Update. April 24th, 2014. InvestWithAlex.com  Google

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Shocking Secret Revealed: Why Facebook’s Earnings Are Irrelevant & Why It’s Stock About To Crash

Even though Facebook (FB) reported very impressive results for Q1 ($2.5 Billion in revenue and 72% growth y-o-y), the only place it’s stock price is heading is south….way south. While we can talk about the fundamentals, growth projections, user engagement, mobile Vs. PC, acquisition, new revenue streams, etc…… none of such things are relevant to what will happen to Facebook’s stock price over the next 2 years. Here is why……

  • Highly Speculative & Overpriced: Facebook is selling at about 20 X revenue. I don’t care what the growth or it’s future is, this valuation is extreme. Just as a reference point, two other highly overpriced and speculative companies, Apple (AAPL)  and Tesla (TSLA) are selling at 2.6X  and 12X revenue. Putting Facebook in a league of it own.
  • We Are On A Verge Of A Massive Bear Market: Based on our mathematical and timing work the bear market of 2014-2017 is about to start. When it starts it will very quickly retrace most of the gains accrued over the last few years. High flyers like Facebook will suffer the most. If you would be interested in learning exactly when the bear market will start (to the day) and its subsequent internal composition, please CLICK HERE

In conclusion, based on a simple premise above we believe that Facebook (FB) will see the $20-25 range over the next two years. Basically, at today’s valuation levels, their growth story becomes inconsequential.  As you can imagine, right now would be a good time to sell or better yet, go short.

facebook

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Shocking Secret Revealed: Why Facebook’s Earnings Are Irrelevant & Why It’s Stock Price About To Crash Google

Reuters: Facebook’s next growth engines still warming up

By Alexei Oreskovic

SAN FRANCISCO, April 23 (Reuters) – Facebook Inc has a message for Wall Street: Don’t expect new revenue streams anytime soon.

The world’s No. 1 Internet social network delivered its strongest revenue growth in several years during the first quarter, as its mobile ad business gained steam.

But even as Facebook gave investors the good news, buoying its stock by roughly 3 percent in after-hours trading, the company made it clear that other money-making efforts such as video ads and ads within its Instagram photo-sharing app would not bear fruit in the near future.

“That will probably be the most disappointing statement to come out of the call,” said Macquarie Research analyst Ben Schachter. “Many folks were anticipating a next leg of growth.”

Facebook Chief Operating Officer Sheryl Sandberg told analysts on a conference call on Wednesday that Instagram ads, video ads and a nascent mobile ad network were all still in experimental phases and that none of them would make a meaningful contribution to revenue in 2014.

That may dash the hopes of some investors, who had expected Instagram to start generating revenue two years after Facebook acquired it for $1 billion.

“We’re very focused on consumer growth, and we move slowly and deliberately in monetization,” Sandberg said, referring to the limited number of ads on Instagram. “We don’t see the need or the urge to ramp this as quickly as we possibly can.”

Facebook is also going slow with auto-play video ads. Facebook said earlier this year it would allow a small group of advertisers to display 15-second video ads on Facebook, but Sandberg said on Wednesday the company was still gauging users’ response and was in no hurry to open the service up broadly to advertisers.

The comments are likely to cause financial analysts and investors to re-appraise Facebook’s near-term prospects. In notes to investors released prior to Wednesday’s earnings report, Morgan Stanley estimated that video ads could contribute $900 million to Facebook’s top line this year, while Cowen & Co targeted $1 billion in video ad revenue.

Shares of Facebook remained up in after hours trading, even after the company warned that its advertising revenue growth would slow throughout the year, as it faces tougher year-on-year comparisons.

Investors are willing to give Facebook some leeway, given its strong performance building the mobile ad business, said Macquarie’s Schacther.

“They’ve earned the benefit of the doubt, that even if it doesn’t come this quarter, or the next quarter, that it will come,” he said of the company’s additional revenue opportunities.

TURNAROUND

Facebook’s newsfeed ads, which inject paid marketing messages straight into a user’s stream of news and content, have ignited Facebook’s revenue growth and bolstered its stock price during the past year. The ads are ideally suited for the smaller-sized screens of smartphones and other mobile devices.

Facebook said mobile ads contributed 59 percent of its ad revenue in the first quarter, up from 30 percent in the year-ago period. Facebook’s overall revenue grew 72 percent year-on-year to $2.5 billion in the first quarter, above the $2.36 billion expected by analysts polled by Thomson Reuters I/B/E/S.

Facebook’s first-quarter results underscore how far the company has come since its rocky 2012 initial public offering, when concerns about slowing revenue growth cut its stock price in half. At the time, investors questioned Chief Executive Mark Zuckerberg’s commitment to the financial side of the business, spooked by the hoodie-wearing founder’s comments about that Facebook does not build services to make money, but rather that it makes money to build better services.

Many of the key investor concerns about Facebook’s ability to transition its ad business to mobile phones and a perception that consumers were cutting back their time on the social network have been dispelled, said FBN Securities analyst Shebly Seyrafi.

He noted the proportion of Facebook users who access the site daily increased to nearly 63 percent in the first quarter, up from 61.5 percent at the end of 2013.

“If you look at user growth, engagement rates and monetization, the three key levers of value, Facebook delivered on all three,” he said.

While Seyrafi said he believed Instagram has the potential to turn into a near-term money-maker, he said he was not concerned by Facebook’s comments.

“All these things are new shoots of growth for the company,” Seyrafi said. “But I think that they want to deliver first and report it afterwards, rather than guiding beforehand.” (Reporting by Alexei Oreskovic; Editing by Richard Chang)

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100% Of Economists Agree Yields Will Rise. What That Means Should Send Chills Down Your Spine

When 100% of surveyed economists expect yields to rise you better perk up and pay attention. From a contrarian point of view.  In Bloomberg’s recently conducted survey, 67 out of 67 Economists expect interest rates to rise over the next 6 months. In other words, they expect continued economic growth and an eventual tightening by the FED.

That flies in the face of our forecast. In the past I have shown that we expect yields to fall and the yield curve to flatten as the US Economy falls into a severe recession between 2014-2017 What Does The Yield Curve Yield?  In fact, over the next 12 months the FED will be looking for ways to stimulate the economy and to print, instead of tightening. As far as I am concerned, 100% of the economists agreeing on the opposite is a direct validation of that view.

Don’t forget, our mathematical and timing work shows a severe bear market between 2014-2017. When it begins to develop, it is only rational that yields decline. If you would be interested in learning exactly when the bear market will start (to the day) and its subsequent internal composition, please CLICK HERE

10 Year Note Chart

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100% Of Economists Agree Yields Will Rise. What That Means Should Send Chills Down Your Spine  Google

Market Watch: 100% of economists think yields will rise within six months

Economists are unwavering in their assessment of where yields are headed in the next half year.

Jim Bianco, of Bianco Research, points out in a market comment Tuesday that a survey of 67 economists this month shows every single one of them expects the 10-year Treasury  10_YEAR +0.41% yield to rise in the next six months.

The survey, which is done each month by Bloomberg, has been notably bearish for some time now, with nearly everyone expecting rising rates. In March, 97% expected rising rates. In February, 95% expected yields to climb. And in January, 97% held that expectation. Since the beginning of 2009, there have only been a handful of instances where less than 50% expected rates to rise.

10_Year

Still, the fact that every single survey participant is bearish is striking. The last time the survey had that result was in May 2012, when benchmark yields were well below 2%.

“Literally there is maybe one economist in the United States straddling the bullish/bearish divide on interest rates. The rest are bearish,” Bianco writes.

He adds that a J.P. Morgan client survey shows that the percentage of money manager respondents who said they are underweight Treasurys is the second highest in seven years.

This is all the more surprising when we consider that investors went into 2014 thinking yields would rise significantly. Instead, the benchmark yield is lower than when the year started, as the market waded throw subpar economic data, geopolitical tensions, and uncertainty over the Federal Reserve. The 10-year note last traded at a yield of 2.72% on Tuesday, down from just over 3% on Dec. 31.

Then again, a separate poll of economists recently showed that exactly zero expect the economy to contract.

But when the entire market thinks one thing is about to happen, the opposite outcome is often in store, notes James Camp, managing director of fixed income at Eagle Asset Management. So don’t count out that result with Treasurys, he advises.

“It’s the most hated asset class,” says Camp, but Treasurys are some of the best performers year-to-date.

 

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Russian Powder Keg Is About To Blow Sky High. US Stock Market About To Collapse?

I continue to maintain that the situation in Ukraine is a ticking time bomb. With American troops landing in Poland and with the Ukrainian forces now attacking Pro-Russian strongholds in East Ukraine, it’s just a matter of time before Russia “officially” invades. I say officially because Russia troops are already operating and technically in control of East Ukraine. Here is the latest and what you need to know.

Let’s see how markets react when this powder keg blows sky high. 


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Russian Powder Keg About To Blow Sky High. US Stock Market About To Collapse?  Google

 

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Stock Market Update. April 23rd, 2014. InvestWithAlex.com

daily chart April 23 2014

A negative day with the Dow Jones down 13 points (-0.08%) and the Nasdaq down 34 points (-0.83%). 

The Dow volume remained low as share distribution continued. Even though both the S&P and the Dow are sitting just a smidge away from their all time highs, that in itself doesn’t tell the whole story. For instance, please note a possible head and shoulder technical pattern developing on the Dow. All we need now is a quick leg to the downside to finish a textbook head and shoulders. Such patterns, of course, are indicative and most often seen at stock market tops. What follows thereafter is typically fairly ugly.

This sort of thinking is further confirmed by our mathematical and timing work as it continues to show that the bear market of 2014-2017 is just around the corner.  When it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning exactly when the bear market will start (to the day) and its subsequent internal composition, please CLICK HERE

(***Please Note: Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). 

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New Home Sales Plunge. Why The Upcoming Real Estate Crash Will Be Much Worse Than The 2006-2010 Decline

As per the Commerce Department report released a few months ago new home sales have collapsed 14.5% to an eight month low.  While industry insiders blame everything from unusually cold weather to baby Jesus for this catastrophic drop, the reality is quite simple. The real estate market is slowly rolling over into a massive bear leg (stage 3) after it’s “dead cat” bounce between (2010-2014). I have outlined all of this in my comprehensive report dating back to October of 2013. Real Estate Collapse 2.0 Why, How & When Thus far, it’s playing out exactly as I predicted.

Here is what most people don’t get. Secular bear markets do not move in straight lines nor do they move fast. Just as bear/bull cycles in the stock markets last 17/18 years, same applies to the real estate cycles.

  • Real Estate Bull Market: Arguably, the US real estate boom began at 1991 recession bottom. It lasted until 2006/07 top or 17 years. Stock market equivalent: 1982-2000 bull market.
  • Stage 1 – Initial Bear Market Leg In Real Estate. 2007-2010 (3 years). Nationwide, prices declined 20-40%. Stock market equivalent: 2000-2003 Bear Market. The Dow declined  about 40%.
  • Stage 2 – Real Estate Bounce.  Also known as the “Dead Cat” bounce 2010-2014 (4 years). Stock market equivalent 2003-2007 bull market.
  • State 3 – Real Estate Collapse:  2014-2017. Stage 3 collapses are notoriously sharp, fast and very nasty. The stock market equivalent would be the bear market of 2007-2009 when the Dow lost 56% of it’s value in 18 months. 

Conclusion: While the analysis above is fairly simplistic, it is also extremely accurate when we take our mathematical, timing and cycle work into consideration. The analysis above clearly indicates that the real estate market/sector is about to eat dirt in a massive and a severe Stage 3 decline. This is further confirmed by the undying love for Real Estate in today’s American culture.

Remember, before any bear market terminates itself any sense of “love for an asset class” must be crushed out of the prevailing culture. I am afraid we are at least a decade away from that point when it comes to the American Real Estate.

infographic 2 - real estate - main picture

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New Home Sales Plunge. Why The Upcoming Real Estate Crash Will Be Much Worse Than The 2006-2010 Decline Google

Reuters Writes: New home sales dive to eight-month low in March

WASHINGTON (Reuters) – Sales of new U.S. single-family homes tumbled to their lowest level in eight months in March, dealing a setback to the housing market recovery.

The Commerce Department said on Wednesday sales dropped 14.5 percent to a seasonally adjusted annual rate of 384,000 units, declining for a second consecutive month.

February’s sales were revised up to a 449,000-unit pace from the previously reported 440,000-unit rate.

Economists polled by Reuters had forecast new home sales at a 450,000-unit pace last month.

Compared to March last year, sales were down 13.3 percent, the largest decline since April 2011.

The housing market has been slammed by an unusually cold winter, higher mortgage interest rates and a shortage of properties that is limiting options for potential buyers.

House prices, whose increases have outstripped wage gains, are also weighing on the sector.

New home sales are counted at the signing of contracts. Last month’s surprise decline could still be reflecting some of the impact from the cold weather. Sales plunged in the Midwest and the South. They also fell in the West, but rose in the Northeast.

Data on Tuesday showing a mild decline in home resales last month had offered hope the housing market could be stabilizing.

The inventory of new houses on the market increased 3.2 percent to 193,000 units in March, the highest since November 2010. While the stock of new houses on the market has come off a record low hit in July 2012, it remains less than half of its pre-recession level.

March’s weak sales pace pushed the months supply of houses on the market to 6.0, the highest level since October 2011. That was up from 5.0 months in February.

The median price of a new home last month rose 12.6 percent to $290,000 from March last year.