2017: The Year the World Crosses the Rubicon and Holy
Hell Breaks Loose.
Five major market forecasts that will make or break you in the new year.
è The next surprising move for the U.S. dollar.
è The next big moves in gold, silver and senior miners.
è The collapsing sovereign bond markets.
è The next shoes to drop in Europe.
è The coming wild swings in the Dow and equity markets.
If you think 2016 was a fascinating year with earth-shattering moves and developments in markets and geo-politics — then just wait until you see what 2017 and beyond has in store.
I am not an alarmist. I am simply going to tell it like it is. Just as I have always done. How I see things based on my economic models. How I see the key markets unfolding.
How I believe the new U.S. administration will play out … how a hotbed of revolution … anti-authoritarianism and a backlash against leaders is being ignited all over the globe.
And how those very same governments are ramping up their attacks on you with new schemes to confiscate control over large portions of, and even in some cases, your entire wealth. Your privacy. And more.
I view the world from my background in economic anthropology and the history of the repetitive rise and fall of societies and civilizations. My work is aided by deep historical data bases, my Artificial Intelligence (AI) models and a neural net that can crunch infinite amounts of data to determine patterns and forecasts that are operative that no one else can see.
It’s how I pegged back in September that Donald Trump would win the election. It’s how I predicted Brexit and the collapse of the British pound from 1.487 to 1.3121 in June.
The recent bursting of the sovereign debt bubbles in the U.S., Japan and Europe. The rise of ISIS. The soaring dollar. The still healthy Asian corner of the globe. And more.
No, I am not perfect and neither are my AI models. But they are as close as it comes to accurate forecasting of social, political and market forecasting that I have ever seen and worked with.
And so it should be to protect and grow your wealth in 2017 and beyond.
The reasons are simple. The main one being that according to my work, 2017 will represent the tipping point in the great supercycle sovereign debt crisis that’s developing and that I started warning you about two years ago.
It will be the year the world crosses the Rubicon — just as Julius Caesar did in 49 B.C. — and there will be no turning back.
Don’t underestimate this. 2017 will go down in the history books as a year that all hell broke loose and when the world was turned upside down. A year when everything you thought you knew about the markets was largely proven wrong.
New trends will emerge. Relationships between asset classes will change. Geo-political turmoil will ramp up at a feverish pace. And there will be more money to be made — and lost — than ever before.
But I am prepared for it. And, naturally, I will prepare you as well. And while 2016 was a lackluster year for Real Wealth Report’s performance, I expect that 2017 and beyond will be fantastic.
Below are my major 2017 forecasts for the dollar, precious metals, sovereign bonds, Europe, and the equity markets.
For each forecast, I tell you what I expect to happen and why. I also give you the important market pivot points to watch for, critical support and resistance to help you understand where a market is now heading into year-end 2016 and how the action will likely pan out in 2017.
And I give you my AI forecast chart for each of the above markets.
With that, you’ll have a better understanding of how my forecasts fit in with the all-important technical and cyclical factors. Let’s get started, first, with the markets probably most at the forefront of your minds …
2017 Forecast #1:
Gold and silver will likely fall into the early part of 2017, then bottom and take off like a bottle rocket.
Gold and silver, along with other precious metals and miners, have had a tough year. Fortunately, I was able to help you sidestep a large-but-false rally in the first half of 2016, keeping you out of harm’s way.
While many other analysts implored you to buy metals and miners, I stood pat and told you to steer clear of them. Instead I told you the health of the pullback would be all determining.
And indeed, gold fell from a run-up and a high of roughly $1,377 earlier in the year — all the way back to roughly $1,245 on October 5, a date I gave you weeks, if not months in advance, creating a bull’s-eye forecast for what would look like a solid secondary low and new platform of support to blast off from.
I even recommended getting your toes wet and buying select senior miners.
But then, gold and silver slapped us all in the face. It cracked that critical cycle low on October 5 — and proceeded to plunge below $1,200 … to $1,162 where it stands now as I pen this issue.
Silver and miners have held up a tad better, but that won’t last.
In terms of fundamental forces, what is happening is this: Big money is flowing out of Europe, Japan, China and the Middle East …
Plus, bursting sovereign debt markets are sending capital flowing into the biggest parking lot in the world, the Dow Jones Industrials, and a handful of major U.S. blue-chip stocks.
I’ll cover this in detail in the Dow and equity forecast section later in this issue. All you need to know for now is that trillions of dollars — way too much for the precious metals or even miners to handle — need that gigantic, deep liquid, bastion of capitalism … U.S. equities … to park itself.
And that means the precious metals are largely still being ignored. Even worse, official government attacks on gold are being ramped higher. The digital cashless society is on its way, being led by the treasuries and central banks of Europe, the U.S. and Japan.
India has already virtually outlawed all gold holdings and is even going door-to-door to confiscate gold.
What about the new Sharia law approved November 19 going the opposite way — and making gold acceptable for the first time as an investment in Islamic finance?
It’s no big deal. Sure, it will improve demand somewhat in Islamic countries.
But it won’t by itself propel a new bull market in gold nor change the current bearish sentiment toward gold.
Nor change the far larger monetary systems of the Western world and their leaders in the U.S., Europe, Japan and even India who are aggressively looking to make gold a dinosaur.
That is when gold will awaken in 2017. When the rest of the world and investors realize that Western leaders are committed to destroying gold.
Instead, those leaders will face increased rebellions and worse …
The unintended consequences of creating what I am officially now calling The Coming New Black Market for Gold.
As it unfolds, I’ll keep you fully informed so you can be sure to safely take advantage of it.
But for now, let’s look closer at the likely price action for gold in 2017. The patterns will be similar for the other precious metals.
First, my 2017 momentum and trend ranges for gold and silver. These are not to be used to make trading or investment decisions. Unless I specifically recommend you do so in an issue or a flash alert.
Instead, they are a guide to annual support and resistance for 2017. Here they are:
2017 Gold Momentum: $1,415.00 – $1,150.80
2017 Gold Trend: $1,834.70 – $1,566.20
Interpretation: Gold remains in a bear trend for now, well below the $1,566.20 lower band of trend indication heading into 2017.
However, momentum is holding up for now, with gold trading just a tad above the $1,150.80 lower limit of momentum as I pen this issue heading into next year.
Overall bearish.
Now silver …
2017 Silver Momentum: $22.9700 – $14.7240
2017 Silver Trend: $38.9200 – $27.3150
The only thing silver has going for it at this time is that it is holding roughly $2.00 above the lower end of its (bearish) momentum range at the $14.7240 level.
Overall posture heading into 2017: Bearish.
Now, my latest AI chart for gold but showing my high-confidence forecast for out to roughly mid-March 2017. The balance of the year will largely depend upon what happens in the first quarter of the new year, what the AI models say at that time, and what technical signals are generated and from what levels.
Silver’s AI chart looks similar, as does platinum and palladium.
Keep in mind when viewing these AI charts, they show patterns and not price. The far-right scale does not, I repeat, indicate price. I have other tools I use to measure and translate it into price objectives. This applies to all AI charts you will see in this issue.
Glancing at this chart though, we can see a lot. Gold and the precious metals should fall into a late January bottom, with gold probably sliding to somewhere between $900 and $1,000.
And then, a new and potentially very strong — precious metals bull market should be born.
Gold bottoms are very difficult to peg. Far more difficult than tops. I don’t even like trying to peg the bottom. But I’ll stick my neck out for the benefit of my members, who almost demand it from me. When I say get your toes wet versus go full in, you will know. Ditto for other precious metals and senior miners.
2017 Forecast #2:
The dollar will pullback in the first quarter then rocket higher again.
Let me be perfectly clear again: There is simply no way the U.S. dollar can remain the world’s largest global reserve currency when the emerging markets of Asia and Latin America are rising like zeniths.
There is simply no way that our country’s fiscal and monetary policies can continue being exported throughout the world when so many countries are gaining market share and contributing to global GDP like never before.
In a nutshell, the U.S. dollar as the sole global reserve currency simply isn’t fair to the rest of the world and it has to go.
But here’s the irony. Even as the dollar is destined to lose its singular reserve status probably by 2020, it’s still the reserve currency by default.
Plus, there’s at least $10 trillion of newly created dollar debt and liabilities, just since 2006 in foreign economies. And with the run on out of the euro and many other currencies, the dollar is getting a bull-market backing that it hasn’t seen since the mid-1980s.
Plus, if Trump follows through next year, he will attract back nearly $3 trillion of U.S. corporate cash, another bull-market force for the dollar.
But the buck has already had one of its strongest moves in decades. A pullback is overdue. Here are the ranges for the nearby futures Dollar Index for 2017:
Dollar Index 2017 Momentum: 91.9150 – 80.6200
Dollar Index 2017 Trend: 87.3900 – 81.6000
Clearly, the dollar is hugely bullish in terms of its 2017 indications. Well above support.
The flip side of that is that a correction in the dollar’s bull market could easily become quite nasty in the short-term.
Here is my AI chart for the Dollar Index:
You can clearly see the pullback in the dollar, which should stretch into late May, with the euro largely bouncing against the greenback. Thereafter, the dollar should rise again, and dramatically.
If you are worried about a second half 2017-dollar rally killing the precious metals market, don’t be.
By the time that next launch higher in the dollar begins, the millions more investors will be clamoring for precious metals as they see their leaders trying to grab and tax and confiscate more and more of their wealth. The Coming New Black Market in Gold will be hatched.
2017 Forecast #3:
The sovereign bond market bubble has burst. Bond investors will suffer terrible losses in 2017.
It’s already burst, in spades. Between July 8 and December 12 the 30-year U.S. Treasury bond lost $224,558 in principal value (based on $1,000,000 face value bond) and its yield jumped from 2.099 to 3.16 — I repeat, in only a short five months.
The 10-year U.S. Treasury plunged $99,918 in premium value (based on $1,000,000 face value bond), and its yield soared 82 percent from 1.359 to 2.478.
This is the worst plunge in government treasuries that I have ever seen in my now 38 years in the markets.
Total global sovereign debt losses as of December 1: An estimated $2.4 trillion since July.
This is the sovereign debt crisis I’ve been warning was coming. It is going to ruin governments … disrupt entire markets … wipe out central banks and treasuries …
And step on you like you’re a bug if you come anywhere near the sovereign debt markets of Europe, Japan and the United States.
Steer 100 percent clear of any sovereign debt of a maturity greater than one-year. Preferably, stick with 90-day Treasury bills or Treasury-based money markets if you have to park idle cash somewhere.
The collapse of these sovereign debt markets is destroying government pensions and collapsing government benefit programs of all kinds …
And causing leaders to become more and more aggressive with confiscations and outright seizures, not to mention tracking you like never before and moving as aggressively as possible to cashless societies.
The sovereign debt markets are crossing the Rubicon, and it will create the nastiest of conditions since at least the Great Depression.
In the end, probably sometime by late 2020, the only hope will be a new global monetary system where governments are strictly forbidden from ever borrowing money …
And instead, are legally and strictly allowed only to operate within their budgets and receipts, coupled with a new tax system where there is, yes, representation.
As opposed to now, where like the Gestapo, leaders of Western socialist governments can essentially do — and take — whatever they want from you.
Here are the 2017 ranges for the 30-year U.S. Treasury Bond:
2017 30-year U.S. Treasury Bond Momentum: 152.375 – 128.500
2017 30-year U.S. Treasury Bond Trend: 148.1625 – 129.40625
The nearby active futures U.S. 30-year Treasury is trading at 148.5625. That’s neutral in 2017 momentum but barely alive in terms of 2017 upcoming trend.
What this already tells you is that the U.S. sovereign bond market bubble has burst.
Moreover, it points to a potentially devastating 21 full points of premium (down to the 128 level) — which would equate to a loss of as much as 14 percent of principal value in 2017.
Clearly, the potential to wipe out trillions of dollars held by institutional and individual investors, not to mention entire central banks.
Now, my AI forecast chart for the 30-year U.S. Treasury:
Fortunately, bond investors will get a reprieve in the first quarter of the new year. Bonds should bounce fairly strongly from their first leg down. But after the first quarter comes to a close, look out below.
Though not shown fully on the AI chart, the models show bonds going into a very deep and severe bear market from May to the end of 2017, and then even worse in 2018.
2017 Forecast #4:
Europe’s ongoing collapse.
Many think that because Europe has been quiet lately, or because Germany’s economy is hanging in there, and that the euro has not yet plunged below 1 to the dollar … that the European sovereign debt crisis is over.
That view is dead-wrong. All you have to do is read between the lines and see what’s happening in Europe:
First, deflation still has the upper hand.
Second, unemployment is still massively high, with youth unemployment reaching as high as 46 percent in many parts of Europe.
Third, Europe’s leaders are out of their minds. They have already legalized bank bail-ins, should a bank fail, meaning depositors’ funds will be expropriated like they were in the Cyprus banking failure in 2013.
Fourth, the refugee crisis and related ISIS infiltration continues to deepen the financial burdens of country governments and worse cause social discontent, with fascism and neo-Nazi rising rapidly in political parties.
Italy has voted out Mario Renzi, a step toward leaving the European Union and the euro.
In May 2017, French elections come. President Francois Hollande has already said he won’t run again. The far-right socialist Marine Le Pen’s party is now in the lead.
Europe is a basket case. The euro will bounce against the dollar, as noted in the dollar section above, during the first quarter of the new year but thereafter, decline to possibly well below the dollar by the end of 2017.
Here are the ranges for the nearby future euro contract:
2017 Euro Momentum: 1.4243 – 1.2334
2017 Euro Trend: 1.3800 – 1.23460
Clearly, heading into the end of this year and into the new year, the euro is seriously negative in momentum and trend. That allows for a bounce, but the euro is so far blew its 2017 numbers its unequivocally bearish longer-term.
Here is my AI forecast for the euro:
Interestingly the euro should largely resume its decline, or at best trade largely in its current range, between now and early March.
From March to April, we should see a stronger bounce in the euro but then, for the balance of the year, the euro is headed back into a severe bear market as the dollar starts another leg up.
The worst part of 2017 for the euro will be once the political campaigns in France get going in a couple of months with a May 7 election date.
Forecast #5:
Forming a new base — from which the Dow will explode higher to at least 32,000 — if not 45,000.
You know my longer-term forecast for the Dow Industrials and other major U.S. averages: Substantially higher, more than doubling by 2018.
And finally, at the end of November, we got the official confirmation from my systems when the Dow closed above the 18,500 level for the first time.
It took a very long time to get that signal, well over a year. But I want to make a few things very clear right now, as clear as I possibly can.
First, that was not a buy signal, but instead confirmation of the long-term trend and at least Dow 32,000.
Second, it is NOT yet time to load up the truck on equities. Chief reason: More than 60 percent of the past 2,000 odd points of Dow rally came from only five stocks: Goldman Sachs Group Inc., JP Morgan Chase & Co, Caterpillar Inc., UnitedHealth Group Inc. and Boeing Co.
Moreover, the breadth of the rally is not the kind of stuff you want to lean on. On average, since at least the elections, there has been only about one stock rising for every one declining.
That is not a healthy breakout. What you want to see is at least three risers for every loser on a typical day, and you are simply not getting that.
So, my view is this: Let the market settle back down, which it will, probably to re-test the 18,500 level and perhaps even a bit lower.
Then, from whatever support level develops at that point, I will recommend you start getting aggressive.
For the 2017 ranges for the Dow, we are already in uncharted territory. So, I cannot give them at this time.
However, after I see some action heading into year-end and the first month of 2017, I will be able to essentially extrapolate the ranges with my AI models and provide you with concrete support and resistance levels to keep your eyes on.
Now, here is the AI forecast for the Dow Industrials. It supports my strategy comments mentioned above.
Notice how the forecast calls for the Dow to be peaking right about now and then sliding into a pullback heading into late March.
From there, we should see a base tested, roughly between 17,500 and 18,500 …
And then a full blown, blast-off for the balance of 2017 with most company shares participating — deep breadth — and likely a move to as high as Dow 28,000 by the end of 2017.
What will drive such a move? Foreign flight capital from Europe, Japan, from China opening its currency system and economy … from the Middle East … from terror and fears of confiscation …
And more, including lowered U.S. corporate taxes and U.S. corporate repatriation cash.
So there you have it. My top forecasts for 2017. My most recent and current AI forecast charts. And my critical yearly support and resistance ranges.
This is an issue you should keep by your side all year long. Naturally my monthly updates and flash alerts will apprise you of any changes that occur that you need to know about.
Now, to your …
Basic Survival Strategies
There’s no question November and December were not kind to you. Gold plummeted through an important cycle low, some miners were stopped out of the portfolio, and more.
But for now, as the dust settles from the recent market action, here are my top recommendations:
FIRST, hold your recently purchased physical gold. If you bought previously at $1,207 and more recently at $1,250, 10 percent each time, your average is roughly $1,228.50. That means you are underwater a bit but these are long-term core emergency holdings.
Moreover, if you followed by recommendations on these buys for 20 percent of 20 percent of the Basic Survival Strategies section, your total allocation should be no more than four percent of your entire liquid net worth (20 percent X 20 percent).
As long-term positions, I believe it’s worth holding these and adding on a scale-down basis. If anything needs to change, or I decide you should hedge, I will alert you appropriately.
Also hold your …
nCore Gold Bullion (GOLDS), up 199.4 percent since originally recommended.
nSPDR Gold Shares (GLD), up 159.6 percent since my initial recommendation.
n Tocqueville Gold Fund (TGLDX), up 27.9 percent.
SECOND, hold any extraneous platinum or palladium you may have purchased, which should be very minor in holdings.
THIRD, for spot silver: Per my standing recommendation, you should now have 5 percent of your Basic Survival Strategies funds invested when silver hit $16.30 on November 23. You’re down slightly 4.3 percent on this buy. Hold. I will let you know if you need to hedge or exit this position.
FOURTH, hold Yamana Gold Inc. (AUY), Goldcorp Inc. (GG) and Kinross Gold Corp. (KGC) — with good-till-canceled protective sell stops at $2.34 … $11.49 … and $2.25, respectively.
Regarding Yamana, please note that the rights-offering to Brio Gold — my mistake — applies only to non-U.S. investors and certain U.S. institutional investors.
So, if you are a U.S. investor in Yamana with a U.S. brokerage account, you cannot take the offer and should not have even received the paperwork.
Overall, however, it is a good move Yamana is making and for the benefit of all shareholders by freeing up money, time and human resources for Yamana.
FIFTH, hold your shares in Vantiv, Inc. (VNTV) with a good-till-canceled sell-stop at $49.74.
If not on board, for whatever reason, using 3 percent of your capital allocated to Basic Survival Strategies, buy Vantiv, Inc., symbol VNTV, at the market. Place a good-till-canceled sell-stop at $49.74.
Finally …
1.Continue to steer completely clear of this riskiest market of all, sovereign debt. This includes municipal bonds and corporate debt rated less than AAA. Bonds are getting crushed.
- As strong as the Dow looks, do not go all in on stocks, no matter who tells you to. Instead, wait for my signals.
