10 Forecasts for 2011 – Gold, Dollar, Stocks, Politics

The Market Oracle
Jason_Hamlin

My first prediction is that my forecasting abilities will worsen each year, as today’s markets are driven less by fundamentals and increasingly more by the whims of elite bureaucrats deciding how many Trillions of taxpayer dollars to toss to their bankster friends. I’m not sure if we’ve ever had truly free markets, but I am certain it is not the case in modern-day America. But, let’s give it a go anyway…

#1 Gold will climb to a minimum of $1,800 and silver to $45. Mining stocks will perform much better than in 2010 and return to offering leverage of at least 2X the advance in the underlying metal. Juniors will continue outperforming the major producers by a wide margin. Corrections will become less severe both in magnitude and duration due the winding down of the manipulation scheme by JPMorgan, HSBC and other banks. The potential for CFTC position limits and sudden willingness of long-term investors to stare down the shorts and clench their gold all the tighter during sudden take downs will also help to moderate declines.

#2 The dollar index will enjoy some strong rallies throughout the year on Euro weakness, but will end the year down 10% or more against the stronger currencies. It might not be the year the dollar dies quite yet, but the weakness in the Federal Reserve’s fiat currency will become more and more evident around the globe.

#3 The FED will be forced to step up its stimulus in order the keep the economy afloat. Look for QE 3 during 2011. Similarly, Bernanke will increase the monetization of U.S. debt in order to keep rates low and fund growing government deficits. U.S. citizens will become increasingly aware of the FED with growing negative sentiment thanks to Congressman Ron Paul’s new position as head of the Fed Oversight Panel.

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