Larry: "Here we go again."

"Here we go again" is the title of Larry's infomercial. Having failed in his last year's forecast of the DOW 9,500 and gold below 1,400, Larry Edelson is at it again. This time he forecasts the DOW to fall below 12,000 and gold to plunge below 1,400. This is a different forecast though. This time the plunge is to be followed by wide scale money printing by the Central Banks of Europe and the US and THEN gold to rise above $5,000. Larry Edelson offers a service that tells you for a paltry 7 grand a year when and how to profit from this change.

Larry's work is NOT to be dismissed even though he was wrong last year. His thesis is that due to the debt crisis in Europe (and the recession that is hitting Europe) wide scale printing of money will be undertaken, which will propel gold prices. While, the American economy is not in recession, neither is it healthy, so that the FED will also print.

European banks are teetering and Europeans are converting Euros to US Dollars. This has propelled the rise of the US Dollar (see second figure), which then reduced gold prices (top figure).

Larry is not tuned in to the markets (though he claims he trades the market) in the sense of following individual trades, so he disregards the following: 1. the USD has stopped rising and shows a double top and 2. gold has stopped falling and even its sideways trading is flattening out. There are orders for gold below current prices that under gird the current price.

My prediction was that gold would hit a new high at the end of May (based on length of previous correction calculations). This has not happened so far. But a bottom in gold prices and mining stocks seems almost imminent.