What Will Happen as $1,000,000,000,000,000 in Global Debt Winds Down? By Elliott Wave International The biggest balloon in the world is deflating. This balloon had been inflated with a quadrillion (1015) dollars, which is to say: This balloon was filled not with air but with debt from around the globe. What will happen as this global debt winds down? In two words: Deflationary Depression -- the likes of which could be unprecedented in history. A thousand trillion in debt can't be wished away or swept under the rug. No one can "forgive" the debt. The consequences of unwinding this debt could be as massive as the dollar figure itself. … [Read more...]
A Deflationary Double-Dip?
Bring Out Your Dead Last week, the price of gold again broke below its new base at $1,200, and the U.S. stock market was again under strong pressure, due to a confluence of fears, most of which point to a deflationary double-dip. The fears were fanned by disappointment in the just-released early quarterly results, by the latest CPI reports that show inflation continuing to moderate, and by yet another poll revealing faltering consumer confidence. The market is also spooked, no doubt, by notes from the latest Fed Beige Book that make it clear that the Fed is (finally) beginning to understand the entrenched and endemic nature of this crisis. While the notes are written in shamanic … [Read more...]
Gold, Silver, Plus #3, for Profit & Protection
By Deepcaster Equities-in-general have gone nowhere for the past decade (and have lost 30% or more when their prices are adjusted for inflation), and are in a Bear Market, with no end realistically in sight. And most Bonds and CD’s provide miniscule or even negative returns after adjusting for Real Inflation. And even many Commodities have not been consistently appreciating lately. We have long been an advocate of Gold and Silver, "the ultimate monetary metals". We still consider thems our #1 and #2 selections as the best fortress assets for profit and protection. Indeed, Deepcaster has two open ‘Buy’ Recommendations on a particular form of these Metals. And, as regular readers know, … [Read more...]
Energy Inflation- Oil and Gas Inflation
By Tim McMahon, editor It is extremely difficult to decide how over or under priced a commodity is when the scale we are comparing it to is constantly changing. By adjusting for inflation we can see what is happening to the price much easier. It pays to know what prices are in "Inflation Adjusted Terms". Once we adjust the gasoline price for inflation we can see that the average price for a gallon of gas since 1918 in June 2010 dollars is $2.39. So it is easy to tell whether gas is currently "cheap" or "expensive". For instance, the Annual Average gasoline price for 2009 was $2.34, which was extremely close to the long term average price of $2.39. While in 2008 the annual average … [Read more...]
What is the Real Definition of Inflation?
By Tim McMahon Define Inflation: A simple way to define inflation is "an increase in the price you pay for goods" but that only tells part of the story... It could also be seen as a "decline in the purchasing power of your money". But there is more to inflation than that. There are two sides to inflation "Price Inflation" and "Monetary Inflation". Jump to: Inflation Definition | Inflation Cause | Inflation Risk | Inflation Rate | Inflation Hedge Price Inflation vs Monetary Inflation: Technically, Price Inflation is when prices get higher or it takes more money to buy the same item and this is what people commonly think of when they hear the word inflation. Monetary Inflation … [Read more...]
The Con of the Century
By deepcaster.com “…In essence, these private banks and corporations now own the revenue stream of the Federal government and its taxpayers. Neat con, and the marks will never understand how "saving our financial system" led to their servitude to the very interests they bailed out. … [Read more...]
The Bear Market and Depression: How Close to the Bottom?
By Elliott Wave International While many people spend time yearning for the financial markets to turn back up, a rare few have looked back in time to compare historical markets with the current situation -- and then delivered a clear-eyed view of the future informed by knowledge of the past. One who has is Robert Prechter. When he thinks about markets and wave patterns, he goes back to the 1700s, the 1800s, and -- most tellingly for our time now -- the early 1900s when the Great Depression weighed down the United States in the late 1920s and early 1930s. With this large wash of history in mind, he is able to explain why he thinks we have a long way to go to get to the bottom of this bear … [Read more...]
How Paper Money Fails
About right now, I imagine 90% of our subscribers and most of the analysts in my building think I'm nuts. Truthfully... I feel a little bit like Chicken Little. I've been saying the risk of hyperinflation is a more serious threat to our wealth (and way of life) than a massive deflation. Meanwhile, just about every month it looks more and more like Europe's banking crisis will cause another round of serious deflation in the world's asset prices. I'm starting to look pretty foolish... I thought economic growth would be stronger than expected, not weaker. I thought job growth would be stronger than expected, not weaker. I thought yields on long-term Treasury bonds would move higher, not … [Read more...]
Global Inflation and Double-Dip Recession Prospects
By Martin Hutchinson, Contributing Editor, Money Morning Last week's stock-market meltdown was a worldwide affair, and was touched off by trader fears of a global "double-dip" recession. However, the truth is that the odds of a recessionary reprise are high in just a few countries - primarily those that have experienced excessive fiscal and monetary "stimulus," or that have real inflation problems. The rest of the world is recovering just fine. … [Read more...]
20 Questions with Robert Prechter: Long Decline Ahead
Long Decline Ahead July 2, 2010 By Elliott Wave International The following article is an excerpt from Elliott Wave International’s free report, 20 Questions With Deflationist Robert Prechter. It has been adapted from Prechter’s June 19 appearance on Jim Puplava’s Financial Sense Newshour. Jim Puplava: I want to come back to government spending, but first I want to move onto the stock market. In your last two Elliott Wave Theorist issues, you laid out a scenario that would put the Dow and S&P, which in your opinion may have peaked on April 26, as the top from here. You feel that this top is the biggest top formation of all time, a multi-century top and we could head straight down … [Read more...]
