US $1,293 (Cdn $1,623) gold price - thoughtsMy view continues to be, as follows:
We are moving into a new bull market for precious metals. Some people are finally starting to realize that both the US and Global economic problems have not been fixed. They have actually gotten far worst, but have been masked over through deception over the past 5 years. However, the masses still haven`t figured this out yet. When they do, look for gold and silver to really explode. Eventually - it`s impossible to know the timeframe - gold will take out its all time high of near US $2,000 and silver will pass its all time high of US $50. Big catalysts for this will be:
1) lost confidence in the US economy
2) realization that the US Fed is stuck at near zero % interest rate for a much longer time - they may have to go to negative interest rate as well (similar to Japan, Euro Zone and others)
3) realization that the US Fed will have to launch a new money printing program to try keep everything afloat again - this time they will likely also print and send US dollars to citizens (not just Wall Street)
4) severe downturn in the US dollar - maybe even a collapse
The parties with deep pockets and agendas will likely try to smash the precious metals price lower again, but it will eventually bounce back. The precious metals bull market will be strong enough to eventually bring it back up. When they smashed the prices over the past 5 years the prices did not bouce back. That is because the precious metals bull market power (institutions, etc.) believed the deception and fantasies and moved on. Now that reality has set in, big players are starting to come back in.
Jobs, housing and GDP are always backwards looking statistics. They often do now get hammered down until well into a recession. With GDP, the US government typically has to go back and revise the GDP numbers about 6 months to 1 year into a recession, similar to 2008. The 2008 recession started in Q4 2007, but their GDP numbers didn`t show it at the time. The Lehman Brothers collapse happened in October 2008. The US gov`t had to go back and revised the GDP numbers back to Q4 2007, and it showed that the official recession started at that point in time.
We could be seeing something similar this time. They showed 1.4% GDP for Q4 2015. US gov`t/Fed and Wall Street GDP forecast for Q1 2016 was 3.0% (+). The first cut of the Q1 GDP came in at only .5% (and that was only above zero due to trickery, which I`m not going to get into here). Data for April (Q2) continues to be poor. The New York Fed just published its first prediction for Q2 US GDP - it shows .8%.
The official definition of a recession is 2 consecutive quarters of negative GDP. There is a chance we might be there now. Six months to a year from now, when they go back an adjust GDP for Q4 2015, Q1 2016 and Q2 2016, the revised numbers could show that the recession started in this timeframe - similar to what happened in 2008.
We know that rent is sky high everywhere. Food prices are killing us. Obamacare (healthcare) costs are through the roof. Now, oil price and all other commodity prices are creeping back up a bit - partly due to China stockpiling, but nevertheless. Inflation is there, but it is being masked in US gov`t numbers. Technology products are cheaper, due to advancements with computer (chip) power and such (from appliances to cell phones). However, people can live without purchasing a new cell phone every year. They cannot live without eating food. Medium to low income people spend about 90% of their funds on neccessities.
Sadly, almost 50 million Americans on dependent of food stamps. Also, a study showed that 50 million people visited a food bank at least one time over a period of a year. In addition, I heard that the food banks have big lines and the food often runs out early in the morning each day.
The manipulated gov`t numbers, and continual Wall Street and Media (not just CNBC and Bloomberg, but BNN in Canada also) propaganda, are masking the true pain of the people.
Sadly, I`m starting to see early hints of a possible stagflation situation - no or low growth environment at the same time as inflated prices - if everything continues down the same path.