In a moment, I’ll give you the lowdown on what’s happening in gold, silver and that other market everyone is so amazed with right now — the price of crude oil.
But first, a more important message that I want to bring to bear:
Later this year, the U.S. equity markets will enter a new bull market, the likes of which has not been seen since the middle of the Great Depression.
That’s when the Dow Jones Industrials soared nearly 382 percent — rallying from a low of 40.56 in July 1932 to a high of 195.59 in March 1937 — even though the global economy continued to sink deeper into a black hole.
And the thing is, only the savviest of investors will understand why it will happen later this year, and even fewer will profit from it.
They are investors who have open minds … who truly understand the lessons of the past … and aren’t afraid to think dynamically. If you’ve been following my work in my Money and Markets columns and in my Real Wealth Report, then you’re one of those savvy investors.
|Only investors who truly understand the lessons of the past will profit from the new bull market.|
You see, back in 1932, three years after the 1929 Crash, 17 countries in Europe started to default on their sovereign debt. Investors yanked their money out of Europe and sent it, guess where?
To the U.S. equity markets. They didn’t buy U.S. bonds because they were afraid that Washington would also have debt problems, even though the U.S. was a creditor nation at the time.
So investors bought up stocks like crazy, sending the Dow into a rocket ride higher.
The same thing has already started in the U.S., and is largely responsible for the Dow’s move from 6,495 in March 2009 to today’s 17,500 level.
But later this year, probably around the third quarter, the next phase of the Dow’s bull market will take hold, and the real liftoff will begin.
That’s because the flood of capital that will rush into U.S. equities will be larger than ever.
And because, this time around, it’s not just Europe’s sovereign debt that will go under, the government debt markets of Japan and the U.S. will also start to plunge.
Mind you, a 382 percent gain in the Dow — taken from its March 2009 low of 6,495 (the equivalent of the 1932 crash low) — would put the Dow a tad north of 31,000 in the next few years …
And just like the mid-1930s, it could happen no matter what the U.S. economy does.
It’s a history lesson you need to heed, for two very important reasons: First, because it’s one of the major ways you can make money over the next few years.
And second, because it’s a lesson about the Great Depression that almost no one tells you about: That stocks can soar even when the economy stinks to high heaven or when interest rates are rising, as they most certainly will do this year.
Right now, in the very short-term, stocks are swinging wildly, and we should see that long-awaited correction take hold, a pullback and consolidation period that could last the entire first half of this year.
But based on 2014’s closing action and my year-end signals, all of my systems now confirm it: U.S. equity markets will explode higher later this year, with the Dow blasting first through 20,000 … then through 23,000 …
And then, even higher — much, much higher — heading into late 2016.
My view: Consider any correction you see in the U.S. equity markets, and any wild swings that accompany it, the markets’ way of merely preparing for a rocket ride higher later this year. And build your ammo, so that you’re fully ready to deploy it when the time comes, in what will prove to be the biggest stock bull market, ever.
What about gold now? Silver? Oil? Other commodity markets?
They are still stuck in bear market mud. Yes, gold and silver are rallying a tad, but those rallies won’t hold. The precious metals will soon head south again, but they will bottom later this year.
As for crude oil, it too has rallied a tad. But don’t be fooled there either. The price of crude oil will most likely plunge to below $40 a barrel in the weeks ahead.
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Until next time,