1929 + 89 years = 2018….89 is a Fibonacci number, and in late 1929 the Dow Jones peaked and melted, and did not regain the highs again until 1955, or about 25 years later, 10 years after WW2 ended.
Nobody alive today was trading the markets in 1929, although the parallels are uncanny….and most importantly “history is our biography”. After the 1929 meltdown, the sovereign debt defaults started in the early 1930s. This caused the great deflationary collapse of the 1930s, and the outperformance of the gold and silver miners in that decade.
I would suggest, given this evidence at hand, we appear to be heading into a similar scenario:
1. Stocks peaking this year 2018 (1929 + 89 Fib)
2. Bear market in stocks accelerates down in 2019
3. Sovereign debt defaults and pensions default, starting from 2020 on wards, and into next decade.
4. Equities generally under-perform for the next 10 years, and do not make new highs, until after 2045.
5. The gold miners enter a bull market as a deflationary recession lasting years, develops next decade.
Note: This is a possible scenario, but we should get more clues over the following months. One such clue is the oil price. Below is $WTIC long term chart, showing a potential target around $11, if a retest of $35 does not hold. That scenario would confirm deflation for years to come. Gold and precious metals generally, would be one of the few investments worth holding. The miners profits would explode as input costs, such as energy, drop. The sovereign debt defaults would further accelerate the capital flow into the precious metals and PM miners, as trust in governments collapses, and whose pension promises cannot be fulfilled.
A perfect storm is approaching it would appear, and it could last years.