Its Over, page-23308

Highly interesting video of interview with Henrik Zeberg in my early post.

So according to Henrik, we are likely to face the following sequence:
1. A Blow Off Top to 6100-6300 on the S&P500 (implying a further increase just north of 10%)
2. A Deflationary Bust which causes a bust across all Risk asset class including Gold, Silver and commodities- equities to face a sharp crash correction - during which the place to hide rest in TLT, USD (DXY going to 120), and I add Cash
3. Fed intervention (aggressive rate cuts, QE++) - strong impetus for Gold, gold stocks, silver and equities (but just a recovery rebound)
4. Stagflationary Phase - Gold could shoot past $10k, and commodities bull cycle commences (I add: this would be a strong time for ASX)

This is consistent with my holding sequence strategy of:

1. Cash (now) plus some Gold (physical/digital/ETF)
2. Aggressive Gold buying after Gold's decline in the deflationary bust (Henrik thinks Gold could lose a material % during this period)
3. Move into Quality stocks during the equities recovery phase following Fed intervention
4. Move into Commodities ETFs and ASX blue chip resource stocks during Stagflationary phase

It is difficult to put a timeframe to it but if I were to guess, then

1. From now till Q1 2025 (latest)
2. Q2-Q4 2025
3. Q3-Q4 2025
4. Q2 2026

If you hold say 50% of assets in Gold and Gold stocks today, a deflationary bust that causes them to decline substantially could result in a large dimunition in wealth. And reduced capacity to buy more of them at the bottom of its decline during the deflationary phase. Gold fell -25% in 2008 from peak to trough during GFC. If that happens, it could result in Gold retracing to $2000 after first rising to $2700.

So if Zeberg is right, then this Blow Off Top phase represents a good opportunity to sell into strength for those who are overexposed in Gold (from prior accumulation) especially gold stocks.

Other than Gold stocks, I think risk reward for ASX stocks remain poor during the Blow Off Top phase, so there will be a small window left to re-calibrate highly risk weighted position for Cash. Rather than being eaten by inflation, Cash will be King during the deflationary bust and will provide a strong leverage and enabler to move into commodities during the stagflationary phase.