Tracking Bo Polny's Forecast - His Sept. 8th Update

We promised to track the bold market predictions of Bo Polny since he is forecasting a severe stock market decline next year. We noted that we can follow his gold price forecast first to see how that works out. Today he released another public update since gold has fallen below his earlier "summer low" price of $1281 made on 8-1-14.

Is he still confident gold will move to $2000? Yes he is. Here is his latest update.

While it will be interesting to watch and see how well he hits his gold (and silver) price predictions, this quote from his update today caught my attention:

"As Gold rises to $5000, a devastating deflationary crash cycle will grab hold of the stock market and unlike the previous recession that followed the collapse of 2008, there is now way out of the one.  It’s going to go from bad to worse to terrible and our world will change forever!"

"On August 7, 2014 an update titled ‘The Coming Inflationary Spike and Deflationary Bear Market Cycle That Devastates the World!’ (click here to view) was posted.  The article speaks of a possible quick Spike for Gold before the Deflationary Stock Market Cycle is to begin come 2015.  Spike or no spike, physical Gold & Silver are the ultimate Insurance Policy against everything paper to the coming Deflationary Bear Market Cycle beginning in 2015."

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My added comment: 

Originally I suggested that you could watch to see if Mr. Polny hit his gold price forecast of $2000 by year end of 2014 as an indicator of how credible his stock market crash in 2015 forecast might be. Since he missed the timing on his summer low call, it appears this has reset the timing range for his bigger picture forecast (moved it back some). Now he is allowing for gold to move to $2000 by the end of the year or no later than mid 2015.

In addition, he makes a comment (underlined above) that "spike or no spike" gold and silver are the insurance policy needed to deal with the "deflationary bear market cycle beginning in 2015"

This is a fairly significant change in the forecast in both potential timing and also if the gold price spike will now take place or not before a deflation event. 

I find this interesting because his timing now lines up closer to what Jim Rickards and others are suggesting (the fireworks may start up in 2015). This change in his forecast means we can't reallly follow his gold price prediction to see if it foretells the big deflation event in the stock market. It now sounds like he thinks they could happen around the same time in 2015.

Missing the summer low call is not really that significant in the big picture. Mr. Polny notes that gold would have to close below $1240 to cause him to rethink his big picture forecast.

So now that is the price level to watch. If gold closes below $1240 it could be yet another indicator that a deflation event is heading our way. We have noted in several recent posts that it seems like there is a real official concern about that problem.

The gold price (and the oil price) are very real indicators to watch (even if these are somewhat manipulated markets as many believe). If we get a close on gold below $1240, it will just add more credence to the idea we need to watch carefully for a deflation event. If gold can stay above $1240 and start on a significant new uptrend, it may mean the market is anticipating further official reaction to try and stave off a deflation event they see coming. We know that officials would not discuss this in public to avoid any kind of public panic so we have to watch the signposts that we do have. 

So, Mr. Polny's forecast is something we will continue to follow along with anything we find that provides evidence of where things might be headed in the next 6-12 months. If gold does still move sharply higher by year end, it would add more credibility to all the 2015 stock market drop forecasts. So its worth tracking to see what happens and what the official response is if there are further signs of weakness and deflation. Obviously a crash of the magnitude Mr. Polny is forecasting will lead to major monetary system changes.

Added note: We did track this forecast over time and on June 30, 2015 we reported that Bo had missed his timing forecast on gold prices here. At that point we ended following his forecasts.