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The Currency War Big-Picture Analysis for Gold, Silver, and Stocks


If Europe starts printing money like crazy, the US dollar should go up in value.

I think you will admit that we are in the middle of one major, crazy financial mess. The part that makes things really crazy is that it's not just in the United States anymore but rather is a serious global problem. And if it's not handled properly, it could change the way we live our lives going forward or possibly even spark some type of war, hopefully things don't get that crazy… but I do know one thing: Fear is the most powerful force on the planet and people do outrageous things when they are backed into a corner.

On a more positive note, yesterday China decided to help provide more liquidity for the financial system along with the central banks. This news triggered a monster rally in overnight trading making the market gap up sharply at the opening bell. This news did hit the US Dollar Index hard sending it sharply lower, but the question remains: Will this news be a one-week hiccup in the market? If Euroland starts printing money, it will likely send the dollar higher and stocks lower for six to 12 months.

Just today I was joking with Kerry Lutz of the Financial Survivor Network about how each country should just give each other country a second chance; wipe the dept clean and start over knowing this time around exactly how each country truly operates at a financial level, allowing everyone the chance to avoid a repeat of all this nonsense. Some countries would get off way better than others because they would get a great deal of debt wiped clean, but wouldn't that be better than years of problems and possibly wars over food, gold, guns, oil and Canadian water?

All joking aside, let's take a look at the weekly long term charts.

Dollar Index Showing Possible Massive Rally If Euro Starts Printing Money:

I'm sure my off-the-cuff options/thoughts will cause a stir, but I am fine with that. Everyone I talk to is thinking the dollar is about to fall off a cliff while I think it's very possible that it does just the opposite. Either way I will be looking to benefit from whichever move unfolds.

Weekly Gold Chart

Weekly Silver Chart

Weekly S&P 500 Chart

Long-Term Thoughts:

I would first like to say that today's report is not the norm. Generally I do not focus on negative stuff in the big picture, and I like to avoid doing that for a few reasons. First, it's just downright depressing to talk and think about. Second, I don't want to be labeled as a "Sky Is Falling" type of guy.

That being said, I think the charts above show a situation that could likely happen in the coming six to 12 months. Keep in mind that my focus is on short-term time frames as it allows me to avoid and actually profit from major market moves while providing enough information for readers to learn technical analysis and trade management. It also helps me avoid looking too far into the future with a negative outlook.

With headline risk changing the market direction on a weekly basis, this negative outlook could easily change in a couple months. I will recap on the big picture as things unfold in January/February.

Editor's Note: Chris Vermeulen offers more content at his site,

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No positions in stocks mentioned.

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