An email from Backwoods Jack:
DOW will pass through 13,000 before gold hits 2000 and the dollar index 50 as you predicted by this time long ago. No one is starving in the US. Plenty of places to get food and shelter! Sinclair said when Gold hit 1650 it would soar with all the Middle East problems. Recovery will be very slow as far as job growth. No riots in Mpls. or St. Paul. Store shelves are packed. Truck and train traffic strong. Sumdingwong with your predictions? Please continue to help me “see the light” Backwoods Jack
An email to Backwoods Jack:
Talk about hedging and backtracking – you have been saying Dow 14,000 by years end and now you say 13,000. The much more important number is how many ounces of gold does it take to buy the Dow? Ten years ago, it took about 40 ounces, now it takes around seven. I say it will eventually (two to three years) be two ounces or less. It matters not where the Dow goes, just where it goes relative to gold. Gold has outperformed the Dow by 600% in the last 10 years! If the current ratio holds, 14,000 Dow equals at least $2,000 gold and that’s all I really care about. A rising stock market helps me, it doesn’t hurt my portfolio or my business. But the Dow is rising on manipulation, not on a strong economy.
I am not wrong with my analysis! At worst, a bit early in my predictions, primarily because the central banks, led by the Fed, are inflating at a rate never seen in the West in our lifetimes. When you throw trillions of newly printed dollars (and euro) at the problems, you don’t solve the problems, but you can kick the can down the road and buy time.
That said, I am absolutely correct when I told you one year ago that by this time this year “it would be clear by now how bad things are,” and it is clear, even if you refuse to acknowledge my views, or Sinclair’s or Russell’s or John Williams’, or Jim Willie’s, or Bob Chapman’s or Andy Hoffman’s – or even YOUR mainstream sources like Trump, Gross and Mauldin. If the economy sinks by a factor of “10” and then shows “improvement” and moves up to a “9”, which has happened, it is still a disaster. Europe is finished and we won’t be far behind.
When I had lunch with you and your son, four years ago, I said the Euro would drop to 1.00. Your son (Ivy League educated and employed by Wall Street firms) laughed and said NO WAY! Well, now, the very survival of the Euro is in question. I wonder, is he still laughing?
We live in a world of manipulated markets, so “timing” (and most technical analysis) is impossible, because intervention pushes off the expected results. You remind me that I keep pushing the deadline down the road. It is not me that is pushing back the timing, it is the constant market intervention by the Fed (and other crony central banks). I am relieved that the economy is still functioning. The longer the better. But I see NO real improvement and nothing on the horizon to fix the problems. We have political deadlock and any small hope of even trying to fix things is not happening. You know that.
My gut tells me that gold and silver should peak around 2015 (Sinclair’s number too) and it will coincide with the demise of the dollar (falling below 60 and ultimately replaced by a new partially gold-backed currency) and something resembling a hyperinflationary depression (God help us).
That’s my view. You are entitled to yours.