Friday, August 13, 2010

Economic Outlook: Two Scenarios

Jeff Fisher writes:

Best Case Scenario for US Markets:
-Dow/Gold ratio will trade 1.0, possible gold target of $10,000/oz.
-Dow/Silver ratio will trade 40.0, possible silver target $250/oz.
-Severe credit market conditions with interest rates over 10%.
-Some companies will survive, many banks and credit dependent businesses would fail.
-The DJIA could trade in a range of 5,000 to 10,000.

Likely Scenario for US Markets:
-Dow/Gold ratio well below 1.0: gold target well above $10,000/oz.
-Dow/Silver ratio well below 20: silver target well above $600/oz.
-Collapse of the credit market. Interest rates only capped by fiat.
-Collapse of the US treasury market.
-Most companies fail.
-Only the best businesses with no need for credit survive.
-Examples: CL, XOM, KO, PEP, PG
-Banking system shut to depositors.
-Nationalization of many businesses and all pension assets.
-Very unstable political situation, collapse of US empire along the lines of the USSR.

Additional Thoughts:
-In order to see a real recover in the US economy radical action will need to be taken. -A renaissance in thinking will have to occur.
-Centuries ago men realized that for there to be peace, Church and State had to be separated.
-In order for civilization to survive going forward, the Market and State must be separated.
-The role of government in the economy must be eliminated.
-The age of central banks and central planning must end.

read the entire essay

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