Sunday, December 30, 2012

PIMCO's Bill Gross: The Year 2013 Will Be the Year of Gold

Here's the Bill Gross 2013 Fearless Forecast as tweeted by him:
Here's my response:

Bernanke is pumping new money into the system as near double digit rates. If he continues

1. Stocks will  have a spectacular year. perhaps gains of 10% plus.

2. Stocks and bonds shouldn't be linked. Bonds will crash as interest rates climb, because of a flight away from perceived safety and because of accelerating price inflation.

3. Unemployment will trend lower as a result of the Bernanke money printing induced manipulated boom.

4. Here I am in sync with Gross, gold will go up. However, I suspect Gross thinks it will climb because of a poor economy. I suspect gold will go up because of Bernanke money printing, which will also cause a manipulated boom.

5. Housing prices will soar, 10% plus.

NOTE WELL: My forecasts are based on Bernanke continuing his mad money printing. If he doesn't, the trends will be much different, There are no indications that Bernanke is going to shift policy, but he is the most erratic policy making Fed chairman in history, so anything is possible. This is part of the reason investing at present is so difficult. Fed policy sets the direction for the economy, and a mad scientist is in charge of setting that policy.

9 comments:

  1. I thought that rising interest rates will crash the stock market by lowering present value of future revenue streams. what is the mistake in that thinking?

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  2. Anonymous(5:13pm) lol Bernanke will get the trillions to them any which way.
    Oh, Dr El Erian is on HuffPo worried sick that all of the carefully scripted capitulation and feigned concern, might send us off the ethereal f/c. Either way I see another $40trillion of citizen originated, Fed floods to trick small investors in on another huge lurch into more inflation ensured debt. Jobs will retreat, capital will be stashed, loans loansharked or non-existent, and back to bargaining with Evelyn at Bilderberg to perpetrate another property usurping flood. The perfect racket. Thanks for the heads up. Duh, we know that as economies collapse, portfolios engorge on central bank and govt fueled(citizen's $)cleared liquidity of citizen held wealth to untaxed banker/traders.

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  3. I am done with this site...........

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  4. When you manage that much money, as does Pimco, Its not a matter of "What" you say. Its "Why the hell are you saying this?"

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  5. I love the next year predictions game! Here are mine: Sabina quadruples ($10), Silver Wheaton triples ($100), crude oil doubles ($175). Silver over $75, gold over $2500. Shocker special: NZD/USD closes the year above 1.25. Banner year for the inflation trade.

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  6. How will housing prices soar if interest rates are rising?

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    1. My question too. How about it Wenzel?

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  7. My outlook for 2013 is … The peace that came through the world central banks’ monetary easing which began with QE1 will shatter …. causing national leaders to announce regional framework agreements for regional security, stability, and sustainability … currencies, bonds, and stocks will tumble as investors lose confidence in the Fed’s Quantitative Easing and the ECB’s OMT … wealth can only be preserved through physical possession of gold, either by investing in bullion or in reserves on Internet trading vaults such as Bullion Vault or Gold Is Money.

    JPMorgan CEO James Dimon recognized the precarious position of global economics after the 2008 to early 2009 stock market collapse and the resulting potential of global conflict as Bloomberg Business News and Conde Nast Portfolio reported on January 26, 2009, “Last year, when JP Morgan chief executive Jamie Dimon spoke at the opening press conference at the World Economic Forum in Davos, he opened with this line: 'Number one on my list is world peace’. ”

    James Dimon and Ben Bernanke saw the challenge to peace, and in mid 2009, acted to trade out “money good” US Treasury Bonds for the Distressed Investments held by banks, which are traded by the Fidelity mutual fund FAGIX. QE1 stimulated global growth and corporate profitability, and investors funded Global Producers, FXR, and Small Cap Value Companies, RZV, as is seen in the ongoing Yahoo Finance Chart of ACWI, EEM, VGK, EPP, VTI, FRX, RZV.

    Through anticipation of Ben Bernanke’s QE 4, and through anticipation of Mario Draghi’s OMT, all forms of wealth expanded dramatically with a risk on momentum global debt based trade rally from June 1, 2012, through December 20, 2012, which produced Peak Credit, Currencies,Wealth and Peace.

    The Age Of Leveraging is history; the Age of Deleveraging commenced December 21, 2012, as World Major World Currencies, DBV, Stocks, VT, Bonds, BND, all began trading lower, as is seen in their combined MSN Finance chart.

    Excerpts from The Economic Consequences of the Peace by John Maynard Keynes, 1919. pp. 235-248, as provided by PBS, communicates that debt deflation, coming from soon falling Major Global Currencies, DBV, and Emerging Market Currencies, CEW, will be totally disruptive to peace globally. “Keynes is often viewed as an economist who tolerated and supported mild inflation as an unfortunate byproduct of sustained, managed, economic prosperity. Yet this excerpt from The Economic Consequences of the Peace, written just at the end of World War I, makes clear how fully he understood inflation's potential to destroy the fabric of society. It is also prophetic regarding the fate of all government attempts to control the price of goods by force of law. Its later passages also illuminate (by analogy) the negative effects on international trade of any currency crisis (such as the devaluation of Thailand's baht that triggered the Asian economic contagion in 1997). The predicament of the responsible German trader facing rapid fluctuation in international currency values has been reproduced innumerable times across the world in the modern era of floating currency markets.”

    Global competitive currency devaluation will rapidly occur, with the Major World Currencies, DBV, and Emerging Market Currencies, CEW, tumbling, introducing worldwide economic and political chaos. Unfortunately, humanity is unaware that the dissolution of peace is at hand. Investors will be derisking and deleveraging out of both Bonds, BND, and stocks, ACWI, on the exhaustion of the world central banks’ monetary authority to sustain global growth and corporate profitability.

    Through unlimited quantitative easing, Liberalism’s Aggregate, AGG, is a global debt burden that cannot be repaid or forgiven. Inflationism is now pivoting into Destructionism, and peace will evaporate like water in a desert.

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