The Great Depression

  • Benjamin Roth: The Great Depression: A Diary

    Benjamin Roth: The Great Depression: A Diary
    It's all here, times change people don't -the endless govt programs that fail to stimulate the private sector -the ups and downs of the economy, the veterans pension stimulates just as the housing credit did, until of course the money runs out -Roth is a attorney in Youngstown Ohio who kept a diary regarding the economy from 1930 until WW II breaks out, he is objective, candid, and forthright which is more than we get from Washington DC now or then highly recommended

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July 18, 2012



Dennis- you seem to believe that commodities and commodity producers, especially gold and energy will dis-connect from the coming meltdown. is this correct? Why do you believe this? In 2008, gold stocks got absolutely hammered, however they recovered first and very quickly. Do you see things playing out similarly? Is your outlook dependent on the Fed printing like crazy?

Dennis Elam

Let me be clear. I believe that before the markets go down, they need to rise high enough to lure those in bonds back into risk assets. Only then can we experience a meaningful decline. The market is not going to reward all those in the Safe Harbor of bonds by going down.Indeed it would take the mass selling by just those folks to cause another calamity. So the short term prediction is that the commodity markets are preparing for a move up. This is being led by energy with oil already up $10 and natural gas up a buck over the last month.
Once bond prices collapse and stocks regain Fall 2007 levels, then we should have the beginning of the 2013-14 decline. I would expect to sell GDXJ and other stocks this Fall. We will look to universal rejection of the Dollar and Bonds at that time for clues, just as they are being embraced as many commodity stocks are near 2009 lows.

Again, stocks, gold, oil up into the Fall, We hit new highs as the Dollar and Bonds fall. Then we begin a third descent in this 18 year no growth cycle. And yes when the margin calls come in, gold and silver stocks will be sold along with everything else just as in 2008.

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