Charles Nenner, technical analyst and founder of the Charles Nenner Research Center, is confident the U.S. will experience a deflationary crisis even with strong reflationary policies in place by the Federal Reserve. From Bernanke's speech in Jackson Hole a few months ago: "the FOMC will strongly resist deviations from price stability in the downward direction". Also don't forget the trillions in Fed loan programs, TARP bailouts and securities purchases that helped reflate the economy and asset markets. Watch Bernanke on 60 Minutes last night. He's leaving the option open for additional Treasury purchases.
Nenner believes additional Treasury purchases won't make a difference. So, add Nenner to the deflation camp with Robert Prechter, Gary Shilling, and David Rosenberg. He didn't mention commodities but he sees a stronger Dollar. So I assume commodities would fall with the market. If that's the case, it will be interesting to see how commodities and the Dollar react during a deflationary crisis and forceful policy response.
Nenner mentioned on CNBC last week that the NASA sunspot cycle forecast was predicting another major crisis in 2013. On Tech Ticker, Nenner gave a more detailed outlook on Gold, the U.S. Dollar, Dow, S&P, semiconductors, 10-year Treasury bonds, deflation and geopolitical conflict down the road. Below are important points he made and the embedded videos from 11/30/2010.
*Market forming important top, maybe go sideways for a while (couple of months)
*In short term we could test 1230 again on lower momentum
*He continues to like semiconductor stocks
*Dow will hit 5,000 in 3 years during deflationary crisis, military conflict (war/peace cycle)
*Interventions won't make any difference
*Nowhere to hide during deflation, 10-year Treasury bond (he's trying to lock in 4%)
*Gold sees a cycle high in the middle of February 2011, longer term gold target $2500
*Following path of Japan (CPI moving in tandem)
Watch the first video for a deeper explanation on his deflation view.
Courtesy of Tech Ticker on Yahoo Finance: http://finance.yahoo.com/tech-ticker/stocks-fine-for-now-but-then-dow-will-crash-to-5000-says-nenner-535663.html
Courtesy of Tech Ticker on Yahoo Finance: http://finance.yahoo.com/tech-ticker/deflationary-hurricane-will-slam-into-u.s.-economy-charles-nenner-says-535664.html
On Tech Ticker, on June 22, 2009, Nenner was predicting another 18 months of deflation (which ends around today) and then 30 years of inflation. When did he push back this view? He mentioned that he didn't know if military conflict would lead to inflation or deflation.