Top trends researcher Gerald Celente pulls no punches when he predicts, “The world is going to war.” Celente says what is happening today happened before, prior to World War II. Celente says the pattern is the same as the one that started in 1929, “crash . . . depression, currency wars, trade wars, and world war.” Celente says, “When you follow the time lines, we are now in the late 1930’s…. People are going to be going into gold.” Join Greg Hunter as he goes One-on-One with Gerald Celente.
This article is based on a Q&A with Andy Hoffman, marketing director at Miles Franklin, the largest bullion dealer in the US.
The general macro economic outlook of Andy Hoffman is based on the expectation we will see “more of the same,” including more money printing, weaker economies, higher unemployment, social unrest … and importantly weaker currencies. With the Dow Jones index almost at all-time highs (14,009 closing price on February 1st) and the VIX indicator close to all time lows (12.90 on February 1st), weakness is not reflected in equity prices.
Markets are not real; they no longer exist. Every market is manipulated to levels we have never seen before. Governments have always been buying bonds. Now they admit that they are buying stocks as well; they use the exchange stabilization fund to manipulate currencies. They have so thoroughly taken over the market that they have literally destroyed volatility. That is why the metals are the safest place to be.
This is clearly an artificial situation and cannot go on forever. These conditions have continued for much longer than expected. Andy Hoffman can hardly believe the slow motion pace at which conditions are deteriorating, saying “this will continue until it stops.” Case in point is the debt situation which went from arithmetic to parabolic growth. Somewhere it will stop; the point is nobody knows when and how exactly. The first signs of higher interest rates are there in the US and Japan, with the 10 year Treasury yield moving to 2% very recently. Governments will react with even more monetary easing (QE). Japan has just announced QE11….
In September 2010, the Brazilian Finance Minister, Guido Mantega, pointed a rhetorical finger at the United States and accused the world’s largest economy of conducting a “currency war”. Suggesting that emerging markets were being unfairly squeezed by a falling dollar, which makes US exports more competitive, Mantega lit the touch paper on a controversy that won’t go away.
For now, “currency wars” are a relatively arcane debate limited to foreign exchange specialists and diplomats. But this issue has already adversely affected hundreds of millions of people who consider themselves largely immune to the vicissitudes of international markets, not least in the UK. History shows, also, such currency disputes can escalate from rhetorical spats into disastrously counter-productive economic conflict.