by Larry Edelson, October 2011
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We have a lot of ground to cover. In this issue, I’ll give you my analysis and thoughts on …
First, the markets, with important updates on the Dow Industrials, gold, silver, the dollar, and crude oil.
Second, what’s happening in Asia, including why most pundits are wrong about the region’s economic growth (yet again).
Third, an “open letter” to Mr. Warren Buffett and President Obama. I’m thoroughly disgusted by their recent actions. You should be too. I’ll explain why in a few moments.
Let’s get started …
In previous columns, in recent weekly videos, in my Real Wealth Report and Resource Windfall Trader — I have been warning everyone that the U.S. economy was imploding … that Europe and the euro were collapsing … and that the sovereign debt crises in the West were picking up steam.
I also warned everyone — in no uncertain terms — that the broad stock markets were headed lower … that the U.S. dollar would rally in the short term … and that commodities in general were headed into a “2008-style liquidation phase and selling panic.“
My warnings are now coming true, in aces and spades. Europe is melting down. The authorities in Europe do not have a clue what they’re doing … are in denial … and even risk an eventual continent-wide civil war and years of economic depression.
They refuse to deal with the debt crisis and expect the euro to survive when there’s not a single shred of a fiscal or political union to back it.
Europe will fail. The great “United States of Europe” experiment will blow up in its face. Big European banks and financial institutions will collapse (and then get bailed out). The euro currency is destined to continue to plummet in value.
Meanwhile, here in the United States, there’s absolutely no question that the economy is slumping severely, and further into a depression.
As I showed you in my column of September 12, this is no double-dip recession. It’s a depression, period. The real values of virtually everything from stocks to real estate to wages and more are plummeting in value when measured against honest money (gold).
And to top things off, our leaders in Washington, like their counterparts in Europe, are royally screwing things up. I could not be more disappointed in Washington.
So it’s hardly a surprise that between the mayhem in Europe and the United States, stock markets are getting pummeled.
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Which is precisely why in my June 20 column, and again on June 27, I gave you my signals to watch for in the Dow Industrials, which I’ve republished here for reference purposes.
The Dow has now closed below all four of the first sell signals and support levels. The Dow has now plunged nearly 2,100 points, or 16.4%, since I warned you last May that the Dow’s inability to get decisively above the 12,800 mark was a flashing red light that the rally from the 2009 lows was over, kaput.
And it’s also why in June I suggested purchases of inverse ETFs such as the ProShares UltraPro Short Dow 30 ETF (SDOW) … ProShares UltraPro Short NASDAQ 100 ETF (SQQQ) … ProShares UltraPro Short Russell 2000 ETF (SRTY) …and ProShares UltraPro Short S&P 500 Index Fund (SPXU).
If you purchased any of those investments, you’re looking great, with gains of as much as 34.91%.
I suggest holding them. The rout is not over. While there may be some inevitable bounces in the days ahead, the Dow is now headed lower to test the 9,034 level.
The equivalent levels in the S&P 500 and the Nasdaq are 993 and 2023, respectively.
Keep in mind that I also warned you that the Federal Reserve is not likely to come out with any supportive measures until the Dow gets down to the 9,000 level. That forecast too has been right on the money. The Fed right now is trying to manipulate interest rates yet again, by pushing long-term rates even lower.
But the Fed is not yet printing money. Nor is it buying additional assets to support the markets. All of that WILL come, but I repeat, not until you see the Dow much lower.
For now, stay OUT of the broad stock markets in Europe and the United States and stick with my suggested short positions via inverse ETFs.
I suggest taking profits on those positions if the Dow Industrials touch 9,034 at any time!

















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