Today a legendary trader and investor, who recently called the bottom in the U.S. stock market with remarkable precision, gave King World News a stunning interview about what surprise action to expect in gold, global stock markets, and oil. Victor Sperandeo has been in the business 45 years, and has worked with famous individuals such as Leon Cooperman and George Soros. Below are the warnings and predictions issued by Sperandeo.
Eric King: “Victor, you made a fantastic all. When the stock market was getting hit, you said that the Fed would not allow for the market to be taken down prior to the November 4 elections. We then had Bullard come out at the bottom for the Fed and jawbone the market higher. Where are we headed from here?”
Sperandeo: “What has been carrying the U.S. economy for the past six years? Answer, the Fed. Without the Fed the U.S. economy would have had a much more difficult time. There have not been any policies by the current administration which have helped the economy. The political agenda is to move the country toward even greater socialism, not to help the economy….
Continue reading the Victor Sperandeo interview below…
“But the Fed is absolutely a political animal with its own political agenda. What I think the Fed is going to do if the Republicans win is let the stock market go down by 25 percent. So I told you before that the market would not be allowed to fall, and that’s exactly is how it unfolded. Now I am telling you that the market will be allowed to fall within certain limits – they are not going to allow a 2008-style collapse.
This may be a slow decline. Meaning, I don’t think you are going to see the Plunge Protection Team coming in to rescue the markets from heading lower this time around. I think the Fed is going to let the markets fall because the blame is going to go to the Republicans. This will be done by design in order to set up another win for the Democrats in 2016. I see what I see and I have to call it that way. The market was being propped up by the Fed up to this point, but now it will be allowed to fall.”
Eric King: “Victor, we have seen a brutal 3-year cyclical bear market in gold, similar to to the cyclical bear phase we saw in the 1970s, but this is inside of what is a very long secular bull market. What about the gold market?”
Sperandeo: “As far as gold is concerned, we saw a rise in the price of gold for 12 straight years. I don’t know many markets in the history of mankind that have winning streaks for 12 years in a row in one direction. Gold has since declined from its high set in September of 2011.
We saw a decline in the price of gold of 28 percent in 2013. And coming into Friday, gold was down another 2.7 percent this year. So gold has declined roughly 31 percent in the past two years alone, but this was after 12-years of 15 – 16 percent annual compounded returns. That’s a hell of a run that gold was on.
So as a big holder of gold myself and a big believer of gold fundamentally, I am not concerned at all. I’m an investor in gold. This is a rare thing for a trader but I have been an investor in gold for a long time. I don’t believe that gold is going to go much lower, and the reason I say that is fundamental.
Right now we are at the breaking point for most gold mining companies. This is a place where production costs are greater than than the current price. Even Goldcorp recently reported a loss. But when mining companies start to lose money, many of them will just choose to shut down production because they will be hemorrhaging cash in order to supply the additional gold to an already robust market in terms of physical demand. Some will keep producing but they will slow production and let go of workers. This is why you always get contango markets on low-priced commodities. This happens because nobody wants to sell when price are too low.
Part of the reason we have seen additional weakness in gold is because of the recent dollar strength, but I am still a big bull on gold and fundamentally I believe the price is very near its lows. So to answer your question, yes, we are still in a secular bull market in gold. I just don’t see another down year for gold and commodities in general, especially after what the Bank of Japan just did. Nobody has ever done the kind of Kamikaze printing of money scheme as the Japanese are doing. This is just another fundamental pillar for gold in its secular bull market and will be extremely constructive for gold over the long-term.”
Eric King: What about the decline in oil? What should we expect from that market?”
Sperandeo: “Oil is being manipulated down by the Saudis in order to punish Putin for taking over Crimea. This is the way the current U.S. administration is getting back at Putin. The ruble has been hitting new lows. To respond to the decline in the ruble, Russia has been raising its interest rates to even higher levels. This will further hurt the Russian economy. $75 oil is a sure thing, but this market may see oil trade down to $70. But really this is U.S. ally Saudi Arabia driving the price of oil down. So this is payback to Putin. But the U.S. is backing Putin into a corner by taking oil lower, and for the record, I don’t think it’s a good idea to back Putin into a corner.”
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