Grains & Gold Reinforce 2016 Cycles
01/04/16 INSIIDE Track: Outlook 2016–2017
40-Year Cycle & Food Crises V
“Happy Golden Year! No, that is not a reference to another national or ethnic calendar… but rather a reinforcement to cycles that have been discussed the past ~5 years.
Simply put, long-term cycles in Gold & Silver – that projected an overall decline from 3Q 2011 into/through 2015 – have led to the conclusion that those metals would not be able to experience a sustained (3+- month) advance until 2016.
The Time Has Come
That does not mean that I expect Gold & Silver to suddenly skyrocket into the stratosphere. If anything, 2016 should provide a precursor to what is expected in the ensuing years. It is the year when the first believable signs of a bottom (in precious metals) are expected to materialize. However, it is likely to be a very volatile year as the bulls begin to feel some new life as the bears struggle to maintain a stranglehold on metals.
And, as already described, that could result in Gold & Silver stocks retesting their lows in late-2016 – when their longer-term cycles align.
Exit 2015
2016 ushers in a long-awaited period when multiple cycles & trends have been/are expected to take hold. Even though preceding peaks or troughs were likely in 2015, the oft-repeated refrain has been that patience was recommended & the convincing moves would not materialize until 2016…
The following are a few of the expectations that have been discussed throughout the past 1–3 years… and which apply to 2015/2016…
— Gold & Silver would extend their multi-year decline into/through 2015 and a sustained rally was not expected until 2016. From a price perspective, 1033–1045/GC was the primary downside objective for 2015 and the secondary downside target for the entire 2011–2015 decline.
— Grains & many commodities would extend their deflationary declines into/through 2015 – with some waiting until Nov. or Dec. 2015 to bottom. That would set the stage for an inflationary advance – likely coinciding with a new Food Crisis – in 2016–2017 (and beyond)…
— A new – and potentially culminating – warm-up could be seen in 2016 and/or 2017, providing rationale for alarmist reactions (even though little additional warming has been seen since the late-1990’s spike, following the previous El Nino) and helping to trigger a Food Crisis…
A Clash of Civilizations
While many of these cycles may seem like routine market cycles – that recur every decade or so – the significance is in the synergy. The late-2010’s are simultaneously the convergence of 40-Year, 100-Year, 200-Year (and longer) Cycles that portend a dramatic global geopolitical (and geophysical) shift.
Like every ‘clash of civilizations’ – from last century’s two World Wars to every battle throughout history – there are (at least) two sides & two conflicting perspectives. Otherwise, there would be no clash!
Isolation in 2016?
In the past, sides were often chosen based on regional & geographical concerns or goals. More & more, it has become all about the money… leaving geographical concerns to turn on a dime & shift with barely a warning. The nation that was considered an ally yesterday is suddenly an antagonist today.
In many cases, large concessions are made to appease today’s allies and struggle to congeal the latest multi-national coalition. Every once in a while, those concessions are refused – laying bare the true animosity & distrust between competing nations…
Dillution by Diplomacy & D.U.P.E.
At the other end of the spectrum is the inclusive crowd, with the majority wanting to unite at any cost… and any concession. As discussed last month (and for the past two decades), seminal events – accelerating global unification – tend to clump around the date of December 8th (Date of Unifying Plans & Events… D.U.P.E.).
For the past several years, that has been corroborated by global climate conferences overlapping that date. So, it is now almost automatic that a new round of global unifying decisions are slated to occur in early-December… for years to come. So, how did early-Dec. 2015 fare?
To quote ec.europa.eu, ‘At the Paris climate conference (COP21) in December 2015, 195 countries adopted the first-ever universal, legally binding global climate deal.” Sure sounds like another global-’unifying plan or event’ to me.
(In case no one noticed, the timetable for signing the agreement is April 22, 2016–April 21, 2017… closely aligning with the Date of Aggression, previously known as Date of Infamy, on April 19th.)
Ironically (or not so much), as the world’s global leaders were gathered in Paris debating climate change and greenhouse gas emissions, China was forced to issue its first ever ‘red alert’ smog warning due to pollution levels in Beijing being 1,000% above what is considered safe.
To recognize the seriousness of this alert, it is important to understand that it triggered the shutdown of all schools & factories (for the 3 days it was in effect) and the removal of half of the city’s vehicles from the streets. By many accounts, it forced a temporary ‘shutdown of Beijing’.
Of course, previous climate agreements gave passes to China & other ‘developing nations’… and who knows what conditions and concessions will ultimately be tagged on to this agreement. So, as China accelerates their status as the globe’s largest polluter, they join other nations each December & prod them to agree to dramatic industrial restrictions… but demand a pass for themselves.
Logically speaking, if the heaviest polluter on the globe is given a pass, that means the other nations adhering to the agreement would have to increase their reductions 300%, 400%, 500% or more. The December 8th shutdown of Beijing was certainly a corroborating & magnifying factor in the culminating days of forging the Paris Agreement.”
Food Crisis Cycles are in sync with Golden Year Cycles & inflationary cycles – all focused on an overall move in 2016–2021, with initial phases in 2016. Gold is projected to undergo an initial ~6-month surge even as Soybeans are expected to rally from Nov./Dec. 2015 into 3Q 2016 – before 6–12 month (or longer) peaks take hold. See previous INSIIDE Track issues & Reports for related analysis on the potential for El Nino-related flooding to add another wrinkle in crop production… ultimately contributing to increased topsoil erosion in critical areas – ranging from California to South America… and other regions as well.