Mac Slavo: Could you imagine the Dow Jones Industrial Average (INDEXDJX:.DJI) rising to over 25,000 points, from its current all-time highs of 16,900?
Given the economic malaise facing the entire globe many would argue that such a value is simply not possible and as soon as it becomes clear later this summer that the U.S. has officially entered another recession stock markets will inevitably crash full-force into a long-term deflationary environment.
But what if the opposite happens? What if the panic caused by a collapsing global economy leads to a limited crash and then sends stock markets soaring?
This is the forecast being proposed by well known cyclical theorist Martin Armstrong, whose past predictions were so accurate that he identified, nearly to the day, the Savings & Loan crisis, the collapse of the Russian Ruble and the crash of Japan’s stock markets.
Even Armstrong himself suggests that his ideas run counter to what one might expect to happen given the state of the world’s political, financial and economic affairs, but stock markets could nonetheless skyrocket 50% or higher from where they are today.
Well, I think the best thing to do is clearly stay in the United States right now. Get out of any emerging markets because what you are going to have is: China is rattling its sabers against Japan and South East Asia; you have all kinds of turmoil in Eastern Europe; and I think you’re going to probably see that start to pick up quite sharply after September. So you don’t want to be involved in those types of assets. I would stay home clearly.
The U.S. stock market, although it sounds a bit crazy, it’s liable to go up very dramatically. I would think we could go up 50% at least. But it’s going to depend upon when the capital flows start coming in very dramatically, and they’ll come when you start to see those types of geopolitical problems [along with]…economic problems from Europe. But, I mean, there will be more dips—one more little crash first—and then it’s going to take off.
You get a lot of these dollar haters, I call them. But what are you supposed to have as an alternative? The Euro is an absolute basket case… Canada doesn’t have a big enough economy… Australia doesn’t… Britain doesn’t… Japan, forget it… So what are you down to? Are you going to use Rubles or Yuan? The dollar is the world reserve currency for a reason… and effectively we are the largest economy and right now we are the only ones really holding anything up.