It really does feel like we’re stuck in no mans land again. Dollar drifting up, gold drifting down, and now Martin Armstrong (radio interview in post below) believes people are no longer going to turn to gold. He believes the biggest surprise next year will be a rallying dollar as interest rates increase, along with a soaring stock market. Depressing stuff for a PM investor. He has a hell of a lot of experience, so I take it seriously.

One thing is bugging me at the minute – the dollar chart. It’s very clear to me where the cycle should be taking us in the next several years. I’ve posted many times on how I see it. But the dollar isn’t playing ball at the moment. It’s traded back above its MA(200). That’s something it didn’t do in the last 2 cyclical downturns. Is it possible we climb much higher in the next year or two before the real plunge ? Is it possible we have to have a parabolic (even more parabolic) stock market and every metric stretched so far beyond belief that we get a crash so big that it resets everything we know and understand about modern banking and financial systems ? A sovereign debt crisis that blows up the entire global financial system. Maybe, maybe not. Here are the dollar charts for the last 40 years, then a zoomed in look at the last 2 dollar bear markets and our current chart. What do you think ?

The Swiss Franc/US Dollar ratio chart is a good guide…

If the MA(50) fails for gold, we’re heading for $1200 and that triangle apex I posted about a while ago. Skating on thin ice at that point. I’m questioning my thesis all the time, which is something you have to do, unless you want to get caught out. At this point I still believe we’re marching higher with PMs and miners next year, but a big SM/banking/sovereign debt crisis could vaporise pretty much everything except physical. Stay alert and be prepared for this ‘low volatility’ environment to end suddenly at any time.