On the heels of unprecedented actions being taken across the globe, today a 40-year market veteran sent King World News which warns that the whole world is being turned upside down in 2014. He also discusses how savvy investors are positioning themselves ahead of the coming turmoil. Robert Fitzwilson, who is founder of The Portola Group, put together the following tremendous piece below exclusively for King World News.
January is continuing to produce a mirror image of the start to last year. From January 1st to January 24th in 2013, the popular equity indexes rose between 4% and 6%. The Amex Gold Bugs Index, the HUI, fell 8% and gold slid 1%. The divergence between asset classes was quite striking.
For the same time period in 2014, the divergence has been equally striking. The HUI has risen 11%, while the popular indexes are off between 1% and 4%. Gold has also generated a respectable 5% return.
It is not surprising. Unlike the start of 2013, the smell of “fiat money smoke” is in the air. After another year of massive printing and credit creation, the law of large numbers might finally be catching up with the central planners in the U.S., Europe, China and Japan. The sums created since the meltdown in late 2008 have reached staggering, and almost incomprehensible levels.
We are so far down this road that the only option for central planners is to create even more staggering and enormous sums of fiat money. Can they continue engaging in this dangerous experiment? Will they? And will the markets even care? Those are the important questions, and the answers to those all-important questions will be shortly forthcoming. The currency crises in the emerging economies, the social unrest and violence, and the dismal parade of economic and unemployment statistics are suggesting that time is running out for that decision.
With the Wall Street and banking entities having switched from heavily short to heavily long precious metals, the list of people who benefit from lower prices continues to shrink. Triggering a melt up in prices should be highly profitable to those who have repositioned themselves. The funds who are still heavily short will be the “suckers at the poker table” under such a scenario and stand to lose an enormous amount of money.
Source King World News