With the world focused on the Fed decision, today top trends forecaster Gerald Celente issued an important trend forecast for the rest of 2016.
Trend Alert: BIS Issues Warning As Gold Bides Time
(King World News) Gerald Celente — Central Bank policies rule the financial world. Their never-in-the-history-of-the-world negative and historically low interest rate policies, plus massive government and corporate bond buying schemes have enriched equity markets but not the general economy…
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Gerald Celente continues: “In fact, what we have been forecasting and reporting since 2010 in our Trends Journal and Trend Alerts, the Bank for International Settlements confirmed this week with its warning that central bank behavior, not economic fundamentals, hold sway over markets.
BIS Issues Another Warning
Claudio Borio, head of the monetary and economic department of the BIS questioned whether “market prices fully reflect the risk ahead,” and “doubts about valuations seem to have taken hold in recent days.” Indeed true price discovery is dead. Despite massive Federal Reserve intervention in the US that has driven the Dow and NASDAQ to new highs, S&P 500 companies reported five straight quarters of year-over-year declines.
Also on the market fundamental front, with retail sales down 0.3 percent in August, there was no back-to-school-splurge.
The service sector, the main economic driver of the United States economy, fell to its lowest level since 2010. Despite “experts” forecasting US Gross Domestic Product to rise 3 percent in 2016, it’s slogged along at an annualized 1 percent for the first two quarters.
Starbucks And Ruth’s Chris Miss Forecasts
On the dining front, from Starbucks to Ruth’s Chris Steak House, growth forecasts have been missed and businesses are struggling. The market research firm NPD Group reported that visits to casual eateries fell in the last quarter for the first time since it began tracking them in 2004, and Nation’s Restaurant News reported sales at publicly traded restaurants declined on average 1.7 percent in the second quarter.
Housing Struggling, While Economic Growth Weakest Since 1949!
Just yesterday it was reported that housing starts in the US came in at an annualized rate of 1.14 million in August, well below the expected 1.19 million while construction permits fell 0.4 percent to a 1.14 million-unit rate last month.
And while President Obama chastised “Anyone claiming that America’s economy is in decline is peddling fiction,” US economic growth since the recession ended is tracking at its weakest pace of any expansion since 1949.
As the BIS report concludes, “A more balanced policy mix is essential to bring the global economy into a more robust, balanced and sustainable expansion.” Yet, today, all equity eyes are concentrated more on central bank maneuvers than market fundamentals. In Japan, with new data showing exports falling 9.6 percent and imports down 17.3 percent in August, the focus is on what new schemes the Bank of Japan will invent to boost the economy despite its long proven track record of failure.
Similarly, later today in the US, the markets await news of if, and when, the Fed will raise interest rates. Yet, as the data proves since the Panic of ’08, central banks’ “policy mix” has failed …and we forecast despite pending measures, they will continue to fail to generate true economic growth. Thus we forecast continued equity market volatility with increasing prospects for a market meltdown. Thus, in this climate void of true price discovery and central bank manipulation, we maintain our forecast that when gold breaks strongly above $1,400 per ounce, it will spike toward $2,000. … BONUS INTERVIEW: To listen to a special interview that has just been released with one of the legends in the business discussing $8,000 gold and the coming mania in the gold, silver, and mining share markets CLICK HERE.
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