Washington, DC -- (ReleaseWire) -- 06/14/2016 --DAWN BENNETT: Bo Polny is a financial trends forecaster and the publisher of one of my favorite reports, Gold2020Forecast, which is an excellent technical analysis for gold and sliver markets. He also is a publisher of two other reports called Polny's Exclusive Turn Dates, and that is for the active trader and investor who's looking to keep a pulse in the gold and sliver markets on the daily and weekly basis, as well as a 2015/2016 stock market index report. This is a technical report which tracks important points in the market since the 2015 market high. We'll start with more detail on that. Bo, welcome back to Financial Myth Busting.
BO POLNY: Dawn, nice to be here and thanks for having me back. Nice to speak with you today.
BENNETT: As far as the 2015/2016 stock market index, we seem to be in a market that continues to go up, but is not really going up behind the scenes. Can you dive into a little bit of that for our listeners?
POLNY: Let's step back and let's just look at the big picture; that's the best place to start, because then you'll see really what's happening. The year 2000, year 2007, and 2015. Okay, what you've got is three tops in the markets, so the world markets have made three cycle highs, and they've basically triple-topped, London, Japan. You can look across all the world markets, give or take price levels; they've all made cycle tops. And so in the past 21 years, the markets have made triple tops, and they're finished. Now, since the year 2015, what we've had is really ugly-looking, it's terrible looking. Some markets some topped in May of 2015, and for the NASDAQ, we call the exact top on the 20th of July. What's happened is since 2015, we've had another triple top series forming. Now, this is more on the weekly basis, so you've got triple tops on the U.S. market last May or July of 2015, then you've got another top occurring in November and December, when we last spoke. Now we're looking for that drop, so we got the drop in December of last year, and then we also had the secondary crash that occurred in January, which was a second leg down on the world markets. So that's what we were expecting to happen; we were expecting lower prices and then it bounced. So now, guess what, Dawn? It's coming back up to make a third and final top, okay? So the world markets now have triple tops across 21 years, and now triple tops across the past year and a half. So now in the markets, the set-up could not be uglier. The best example I can give of where we're at is—I don't know if you've been to an opera before, Dawn...
BENNETT: Right.
POLNY: ...but we're in the very end of an Opera, when what happens? They bring you up, and then it comes down, and then they bring you up one more time, and then it comes down, and it comes up one more time, and then it's lights out. So that's where we're at, Dawn, it's actually at a point where if people are in the market right now, this could not be more dangerous, right here.
BENNETT: So what you're saying—musically and maybe in the markets—is that this is the crescendo, is that right?
POLNY: Absolutely, Dawn. This is it. Anybody believing in the markets, the top came in last year, 2015; that was the third and final top. Now we have triple tops forming on the weeklies, and then also we've got them on the dailies, with right shoulders about to collapse and fail. This is ugly, Dawn. It's terrible.
BENNETT: Just to slow you down a bit, when you're talking about right shoulders, can you go into detail? Because that's a little bit of technical chart analysis, and I want you to explain to them. We talk about it here on the show, but it's always great to have an expert do it too.
POLNY: Okay, so think of a body; you've got a left shoulder, and then the head is higher, and then you've got the right shoulder, which is lower again. So when a markets are form a chart pattern, called a triple top formation or a head and shoulders, then it crashes. But in both of these chart patterns, there's three: one, two, three. Ultimately, they all end in failure. Last year, for example, in the collapse in August, the markets didn't go up in August; they collapsed in August. So that was a failure of a triple top on a 21-year pattern, and so that failed. So the same thing's about to happen now. You've got a triple top on the weekly charts and on the daily charts, which are forming triple tops. Now, all of these, when they fail, they're not like a small drop; it's not a 5% drop on the market that results. These are-- now you've got 21-year tops, you've got two-year triple tops, and now you've got daily triple tops. So you can't break it down any smaller, aside from the hourly. So in terms of time, there's so little time left it's actually scary. And being in the market now, there's nothing but down side, but this down side's not going to be little; this is going to be epic.
BENNETT: So again, you're talking about technical, and then on a fundamental basis, people can see it by the bond yields that are plunging, and now there's, I understand, over 10 trillion in global debt that has a negative yield, if you can imagine. So every fixed income investor starved for yield is either jumping into the stock market or going on the long end of the yield curve, which doesn't make sense. It's a major risk. Is part of the risk factor that you're talking about what happens when central banks start tightening again?
POLNY: You know, it doesn't matter what the central banks do at this point. When we go back to the chart analyses, charts are life. They're basically the energies of the world, and they ultimately represent people's emotions and energies, and they create chart patterns, and these chart patterns are created in nature. It doesn't matter what the Fed is going to or, you know, if they tighten or don't tighten; the bottom line is that, just like in August, when you have the stock market crash, the dollar went down with it too, and in short-term you had bonds go up. I did an interview with Greg Hunter a few months back, and we talked about this concept. You mentioned the world yield, but now imagine, if the stock market crashed and the dollar crashed with it, like it did in August of last year, and the dollar this time drops, say, 10% to 20%, so even though you got a yield of 2%, you're going to get-- if there's a 20% drop in the dollar, that would be a negative 18% yield. So how many investors in the world are going to hold those bonds?
BENNETT: I think that most of us don't think about where the value of our money comes from; we don't think about how cash itself has no intrinsic value in reality, but instead, derives its value from our faith in the institution that issues the currency. I bring this up because you're talking about it, because I think Americans' faith in our government is moving towards an all-time low. I know the dollar got hit pretty hard on Friday; should we expect the dollar's value to continue to take a hit, as a result?
POLNY: I believe the dollar is going to fall with the stock market very soon, here and now. And so should this happen, and I believe it will, what you're going to see is a loss in faith and confidence. The issue with currency is it's a belief; it's, 'I believe the dollar has value, I believe currency has value.' So you have to believe in it, and then the governments that make it have to back it, right? And so what ends up happening is that if faith cracks, it doesn't take long for the snowball effect—the paper that it's written on becomes less and less. Now, it doesn't have to go to zero, but imagine if it lost 10%, 20% overnight or something quickly; that would be very dramatic, and it would create a ripple effect throughout the world. And that's, I see, how this is probably going to play out.
BENNETT: Our own Federal Reserve and other central bankers have succeeded somehow in putting off the day of reckoning you talk about. I mean, this year and last year have been marked by terrible economic fundamentals, bad factory orders, international trade, no new business creation; you know, all this is trending south, yet the U.S. economy has somehow, at least from outward appearances, avoided the lapse into a recession we were expecting, here on Financial Myth Busting. So what is your forecast for the remainder of 2016?
POLNY: Well, again, see, what we're looking at at the equity markets, stock markets, like I've said. In the last interview we did, we had the second leg down on the market, so all it's missed now, Dawn, is the third leg, and the third leg is the collapse leg. So my outlook for the equity markets, stock markets this year is terrible. We'll get a bounce, but first I see a collapse, I see a massive drop. And I don't know how low it's going to go, because the cycle now does not give me price projections, per se; it just tells me the massive direction it could go in. But it gives me also the amount of days or time that it could fall, so for June, here's the problem; we've got a down cycle that's very likely here in June, and the reason being is that we've got an incredibly powerful up cycle for the precious metals in June. So I look at as, if gold and silver mount very powerful up cycles, why? Why would that cycle be indicated to be very powerful, unless the equity markets are going in the opposite direction?
BENNETT: On Friday, the Bureau of Labor and Statistics reported just 38,000 jobs were created in May, and that was the worst job report since 2010, yet the markets didn't seem to care. However, one of the most under-reported events of Friday was the growth of gold and silver that day. Both had big days after Friday's downbeat jobs report. Isn't that fascinating, how the press just wants to continue to be in denial about gold and silver's ability to help out the investor, to help out the fellow American?
POLNY: Dawn, what is gold and silver? You know, when you buy a house, what do they force you to get? Insurance, right? You buy a car, what do they force you to buy? Insurance. Everything in this world is like, 'Hey, you want to borrow some money? No problem, but you've got to take an insurance policy out against that.' Same thing. But no one says, 'Hey, if you're worth X amount of money, make sure you have an insurance policy out against your net worth.' No one says that ever, ever. Okay, but what is gold and silver? It is the ultimate insurance policy against everything paper, everything. So if you have car insurance, home insurance, and you don't own physical gold, very specifically physical gold and silver in your possession, why? Why do you buy insurance, but you don't buy insurance on your true value, your net worth, even 10%? But no one talks about that, Dawn, because you're not supposed to, because basically gold and silver are the opposite of paper. So everything paper is paper, and gold and silver are when paper fails, then that insurance policy kicks in and says, 'Here, here's your money.' And so ultimately it's about understanding how the system works and about understanding what gold is, and gold is true wealth preservation. People who study economics understand history; they know that gold and silver are money. They've been money for 5,000 years. It's just that for the cycle work that I do, basically there's a currency cycle that's been in place for 250 years, 252 years, and it ends this year. It's been indoctrinated now in our lives. 252 years times an average generation of 70 years, how many generations is that, right? So what happens is that after all these years, people in the families get indoctrinated into paper, ultimately not realizing that truly wealth and wealth preservation is precious metals. And so, you use paper for transactions, but you need to preserve your wealth and not be confused or tricked as to what kind of insurance policy you have to hold against any financial calamities or issues. Ultimately, Dawn, this is not about paper; this is about making sure that everything you own, especially now, that you do have precious metals as a protection against all the paper that's been created, and literally to infinity. It's just electronic digits. Right now, mathematically, if you look for every ounce of gold they've sold, I think there's 550 people in line that think they own it; that's like selling the same house to 550 different people. Gold's going to go up a minimum, Dawn, ten-fold in value. So if it's at about $1,240 as of Friday, June 3rd, gold's going to go minimum 10,000, okay? That's a ten-fold increase. So if, just as an insurance policy, someone took 10% of their net worth, they bought physical gold or silver, and they're holding it in their possession, they have sustained their purchasing power or their net worth for years to come, because gold will multiply by ten, and so your 10% investment, minimum, in precious metals will preserve your wealth. And so I'm not even in the markets. I think it'd be crazy to be in the markets. This is so important; if you don't own gold and silver, you don't understand economics, you don't understand what paper is, and you don't understand how economics works. And, you have been indoctrinated into 250 years of belief that paper is value, but it's not.
BENNETT: Thank you, Bo. I appreciate it.
POLNY: Thanks, Dawn.
For over a quarter century, Dawn Bennett has been successfully guiding clients through the complexities of wealth management. Her unique vision and insight into market trends makes Bennett a much sought after expert resource with regular appearances on Fox News Channel, CNBC, Bloomberg TV, and MSNBC as well as being featured in Business Week, Fortune, The NY Times, The NY Sun, Washington Business Journal in addition to her highly regarded weekly talk radio program - Financial Mythbusting. Through prudent and thoughtful advice, Dawn Bennett has strived to consistently provide the highest quality of guidance.
About Dawn Bennett
Dawn Bennett is CEO and Founder of Bennett Group Financial Services. She hosts a national radio program called Financial Myth Busting http://www.financialmythbusting.com.
She discusses educational topics and events in the financial news, along with her thoughts on the economy, financial markets, investments, and more with her live guests, who have included rock legend Ted Nugent, as well as Steve Forbes and Grover Norquist. Listeners can call 855-884-DAWN a as well as take podcasts on the road and forums for interaction.
She can be reached on Twitter @DawnBennettFMB or on Facebook Financial Myth Busting with Dawn Bennett.