Wow! So many reader questions! Catalan disaster? Euro crash? Dow correction? Gold. Bonds. China. U.S. bankruptcy? And more!

Never before in the history of my company have I received a bigger avalanche of questions and comments than I did this week during our one-hour Q&A session online! (See recording or transcript.)

I think it’s partly my own fault — because I’ve created such a stir with the stunning predictions in our recent video, and with details on the myriad of profit opportunities they can generate.

Mostly, however, it probably has nothing to do with what I’m doing; it’s because of the swirling storms that are blatantly evident to anyone who pays even the slightest attention to world news.

As you can see from some of the questions that I couldn’t get to during our online session, that’s something our readers seem to be well aware of …

Lotto P. asks: “After Sunday’s clashes in Catalonia, Spain, what do you think will be the reaction of the EU and the markets?”

The most violent government crackdown on Spanish citizens since the brutal dictatorship of Generalissimo Franco.

Madrid’s violent crackdown of the Catalan independence referendum injured more than 800 voters.

It was interpreted as a de-facto declaration of war against the breakaway region. And it set into motion a downward spiral that has barely begun.

Next, expect a surge in already-simmering separatist movements all across Europe: The Flemish movement for independence from Belgium … the Corsican movement for separation from France … the Venetian and Lombardian movements for autonomy from Italy … the Moravian and Silesian movements in the Czech Republic … even autonomy movements in Denmark and Germany. (Just to mention a few.)

This is devastating for the euro — even more so than the EU’s loss of Great Britain, which is not part of the eurozone to begin with. It means another major decline in the currency’s value, and another big wave of European flight capital sweeping into U.S. markets.

Joseph L. asks: “How is this kind of news impacting the stocks Sean has recommended in your Supercycle Investor service?”

A lot of the flight capital — from Europe and elsewhere — is flowing into resources and resource stocks, which has been his primary focus in the early going. As a result, we’ve just seen major surges in his picks ranging from 30.5% to 94.2%.

Robert M. comments: “No word on what happens to China. When or will they have crises like Japan, Europe and U.S???!!!”

What makes China different is its massive trade surpluses and the largest hoard of currency reserves on Earth. This doesn’t mean China will escape the crisis. It has its own set of problems.  But the primary driver of the next global debt crisis will be the massive, over-the-top debts piled up by federal governments. And among the world’s largest economies, those are worst in Japan, Europe and the United States.

Jim A. asks: “When do you anticipate the bond market to move to the downside?”

This is easily the most important question of all. My immediate answer is that bond markets have already begun to decline, although not yet in a big way.

Plus, here’s a broader answer: It’s the government bond markets of Japan, Europe and the United States that will give you the first warning signs of the coming government debt crisis.

Why?  Because that’s where governments borrow the trillions they need to stay afloat. That’s where central banks have poured in trillions of dollars with their biggest bond-buying programs in history. That’s where central banks have bid up prices to the stratosphere — and shoved down yields to ridiculously low levels. And that’s where we see the single-largest speculative bubble in the world today.

George Nate asks: “Do you think we’ll have a correction by the end of 2017?”

Yes. Probably by the end of 2017 or the beginning of 2018.

Ian H. writes: “Using Elliott wave analysis, you can count that the Dow is close to completing five waves up of Supercycle degree from 1932, so why wouldn’t there be an imminent U.S. stock crash?”

How close? And how many times will we see what Elliot wave theorists call “another fifth wave extension”? Meanwhile, we also see a crash in the future, but not imminently.

Stu asks: “Where is Mike Larson hiding?”

Hiding? Ha-ha. Quite to the contrary, Mike is writing market commentary almost daily at our Weiss Ratings division (see our website, above). Go to www.weissratings.com. Then, on the right side of the screen, sign up to receive his reports.

Rakesh writes: “With demographics to increase in older people retiring and curtailing their spending here and in Europe, Harry Dent predicts depression with the market dropping 40% to 50% in the time frame you are claiming market will be going up. What is your take on demographics effect on the markets?”

Unquestionably, the aging of populations in industrial nations has far-reaching economic consequences.

But the first place we see the impact is not in the spending habits of consumers or the level of the Dow …

Among all countries, whether large or small, advanced or underdeveloped, Japan has, by far, the largest percentage of elderly.

It’s in the borrowing habits of governments, which face insurmountable deficits in pension and health programs.

And nowhere is that problem more extreme than in Japan, where the government now owes $2.50 for every $1 of GDP, far more than Greece or the United States.

Carole D. has this question: “You are focusing on stocks that have risen and are expensive. Are you going to recommend stocks that are promising and are low in price so I can make the profits that you have made?”

Yes. It is not difficult to avoid overpriced stocks: Find those that are undiscovered or under-covered by Wall Street. Wait for a correction. Or both.

Paul writes: “Japan has been doing very well recently under its present debt. Why do you think it will suddenly have a recession? Could it not carry on like this for years?”

We do not foresee a recession hitting Japan so suddenly. We believe their crisis will begin first in the Japanese government bond markets.

Susan G. has this comment: “This week the House of Representatives will vote on a budget bill. The proposal is to slash federal benefits by at least $32 billion over the next decade. Do you believe that people’s pensions and Social Security awards will be reduced or eliminated altogether?”

The trigger event that will force the government’s hands to make major cutbacks in federal benefits will not come from Congress or the president. Nor will it be the result of an election.

Instead, it will come from major holders of U.S. government securities — fed up with the miserably low yields they’re getting … fearful of an inflationary surge … deeply concerned about the government’s massive debt load … and terrified by the impact any major war could have on all of the above.

It’s highly unlikely Social Security checks will be eliminated entirely. But other dire scenarios, starting with a reduction of their purchasing power, are very possible.

“Where do you see the precious metals by year end?” queries a subscriber by the name of Larry.

Our cycle analysis indicates a good chance of a moderate correction that could continue into early December, and then a major rise to new 12-month highs.

Jere R. asks: “What do you invest in after the USA goes belly-up?”

Perhaps you’ve misunderstood or we’ve not been clear enough in our communication. We are not predicting that the nation as a whole will go bankrupt. Rather, what we see ahead is a very serious crisis in government debt and government bond markets. The crisis will start overseas and then spread to the United States.

By 2020, Washington will reach a critical fork in the road: The government will either find some way of effectively defaulting on its bonds (a de-facto bankruptcy) … or it will find a way to renege on many of its other obligations, such as Social Security, Medicare and Veterans’ benefits (also a de-facto bankruptcy). What to invest in is best determined when that time comes.

Charles D.’s question is similar: “When is the best time to jump back into the markets, 2020 or 2022? How bad is it going to get?”

It’s too soon to pinpoint the best entry point. The decline itself has yet to begin. And what we know today — about the cycle or how it will play out — is not nearly as valuable as what we will know then. That’s why we will continue to publish our analysis and recommendations. And it’s why you need to stay in touch. It’s also too soon to say how bad it will truly be. Let’s pray for the best and be prepared for the worst.

Wayne K. asks: “When the ‘crash’ occurs and the government tries to confiscate cash in money markets or bank accounts, how do you access your funds?”

Right now, our Weiss Ratings indicate that, despite some notable exceptions, most of America’s banks are quite a bit stronger financially than they were eight years ago. Meanwhile, although almost anything is possible in the midst of a major breakdown of government financing, confiscation of your money in bank accounts is definitely not a current concern. If that risk rises in the future, we will let you know and give you more specific recommendations for protecting your money.

While watching our broadcast, Tom wrote in, saying: “My volume is all the way up and I can hardly hear you.”

We apologize for any technical issues you may have experienced during our Q&A session. To review the recording, click here. For the transcript, go here.

Good luck and God bless!

Martin