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Stock market. All these things are related to currencies, and later on, or maybe in another
presentation, Iíll present the picture for the next 20 years, and why itís important
that you have a currency managed account, and why itís extremely important that you
consider getting out of all long-only stock positions. If you have it for your retirement
accounts, you want to be extremely careful in here, because this is getting close to
a very major top, like the year 2000 top, that may be of greater significance than the
top of 2000, for many, many reasons I donít have time to go into.
But hereís a corrective move in the stock market. Thereís all sorts of Andrews lines
of different degree we drew. 1, 2, 3, 4, 5, weíre in a five-wave top; and even this little
wave, 1, 2, 3, 4, 5, smaller momentum, smaller in length than this Wave 3; again, 1, 2, 3
the biggest, 4, 5, pullback to old Wave 4. This one pulls back to that Wave 4 low.
So now I would expect a little bounce and either a pullback to 1100 on the S&P 500 trading
stock, and possibly one more rally to this 1250 to 1300, or ñ and Iíll wait to see
what the lines look like at that point ñ or it breaks 1100 and hits 1000, 900, 650,
and possibly going all the way to 450, or the 1987 low of 350, which weíd be in a major
depression at that point. Which is possible over the next 4-10 years.
Hereís the stock market since 1790, and youíll notice that there tends to be 16-year run-ups
and 20 years of flat to sideways. Itís more or less 20 years up and 20 years down, or
20 years flat. We just finished 18 ñ depending on when you count, if you count from the 1982
low, itís 18 years up; if you count from the 1974 low, 777 on the DOW, we rallied up
24 years. But weíre due for a major correction.
And remember this, folks, remember this: whatever market youíre looking at ñ I donít care
if itís pork bellies, if itís Swiss francs, or if itís the stock market, if youíre looking
at a 1-day chart on a 5-minute bar chart, if the market runs up for 2 hours, itís going
to have a 45-minute pullback. If the market runs up for 70 years, it could have a 24-year
pullback or a 35-year pullback. Whatever it is in life, when thereís a big, big run-up,
thereís a big, big pullback. Corrections are always a percentage of the run-up.
So am I expecting a pullback of Biblical proportions? I donít know yet. I do eventually. And thatís
not a religious comment, but itís just a market comment. But hopefully this is going
to be a very significant pullback, but itís not the end of the markets. But we want to
take advantage of it, and by having a currency portfolio managed by someone with tremendous
experience will help you weather the storm. We want to have our funds, our different programs
diversified, we have multiple strategies that diversifies our program; we want to have our
funds deposited in dollars at certain times, in euros or other currencies at certain times.
Weíre here to protect our own assets, our client assets, and to ride out the next 20
years in comfort.
Why is this a real dangerous time in United States history and the global history is the
gigantic debt load we have. Hereís a chart from Gabelli Associates. Our total debt to
GDP right now is over 300%, and itís currently at 6.25 or 6.4 total GDP, which is a place
when other currencies have crashed, like the Asian currency crash, the Argentinean peso
crash, etc. So sometime in the next 2 years or 4 years, I expect that the dollar will
crash. And whether it goes down to 60 or goes down to 40, or just goes into infinity abyss,
nosedives, I do expect a major problem with the dollar after some kind of rally here.
So stay posted and keep in touch with Dan and Henry.
Hereís the cyclical composite chart that we have access to now. Weíre just getting
all the technology. By the way, our system ñ our predictive overlay uses cycles and
extrapolates the cycles forward currently 25 bars into the future. But pretty soon weíre
going to be able to do this literally, letís say, a hundred years into the future. But
this is take a 16 cycle composite of the stock market, going back to 1700s, and youíll see
that every significant high and low in the stock market was forecasted by the combination
and the composite of these cycles.
Whatís important is, the 2000 high was a composite of the 12 year cycle, the 34 year
old cycle, 42 year cycle, and now weíre in a down mode. Weíre in a strong down mode,
and itís likely that weíll be in a strong down mode until 2014, possibly 2016.
Why? Thereís many, many factors, including demographics, including the fact that the
U.S. governmentís going to have to start paying a tremendous amount of people retirement
benefits, and in 2014 people are going to be forced, the bulk median of Baby Boomers
are going to turn like 70 or something, and theyíll be forced to take their mandatory
retirement benefits and draw off their 401(k)s and IRAs. Probably the market is going to
be tanked before that time, and thatís just going to be the final bucket, where people
are forced to take money out. And that will probably cause a low in the stock market around
that time, a major low.
The Japanese stock market topped in 1989, and Iím sorry I donít have that chart. Our
market is running at a 90% correlation to the Japanese stock market, which means, to
you, that the top in í89 in the Japanese stock market just made a 14-year low in 1993,
and we are going to make a 14-year low in 2014. And theyíre still, after 14 years,
I think the highest they rallied was 40% or 50% of their old high. Less than that, 50%
off the bottom. So I think that sometime youíre going to be looking back in maybe 15, 20 years,
and the stock market still hasnít made a new high, and itís significantly lower than
it is right now. I mean that with all sincerity, so please protect yourself.