Deflation investing - important to your and the world's survival.
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Deflation Investing: Are We Set Up for a Perfect Storm?
Video: Prechter On Market Rally
(Note: This interview was originally recorded on September 20, 2010)
In the video below, Robert Prechter talks to Yahoo! Finance Tech Ticker host Aaron Task and Henry Blodget about extreme readings in various indicators that confirm his bear-market forecast.
When you consider deflation investing you should know the depression investing cycle started with the 2000 dot com stock mania bubble climax peak and crash and may not end until 2016 to 2018. At that time, most of your assets may have lost 90% in price and unemployment could be down to 50%. Even the price of gold may drop 61.8% from it's intermediate term hyperbolic blow-off of $1,912 per ounce. CASH IS KING in deflation investing so says soothesayer Robert Prechter.
Japan has seen deflation for 20 years and now the rest of the world is catching the epidemic. You cannot stop the pendulum from swinging. Deflation and depression will continue until the inflation is wrung out of the system by hyperdeflation in this Greater Depression. Austrian economics tells us that the only cure for credit inflation is a crash as debt gets liquidated.
Robert Prechter's deflation investing advice is to look for safety as the economies of the whole world experience the Greater Depression. He has a list of the safest banks. Join his Club EWI for free at my site. Prechter says to pay off debt and only own the safest and shortest term credit instruments.
Most people including your broker and financial advisor will not have a clue about what is going on in regards to deflation investing. They will think inflation is going to come roaring back. It will not for years. This is the big one folks - three times larger and three times longer than the 1930's depression. That reminds me. Lobby for a private money backed by gold. Do not let government control the money. The always choose inflation with fiat (no backing) money. Government fraudulently figures it will borrow and pay back the money it owes in the future with inflated (worth – less) money. Technically this is called “financial repression.” It is a rip off of savers, the elderly on fixed incomes and anyone that buys the government’s long term bonds or thinks the money will hold it’s value in the future. Be a contrary investor when you do your deflation investing! Again! CASH IS KING IN YOUR DEFLATIONARY DEPRESSION!
Copyright 2011 by Delwyn Lounsbury - THE DEFLATION GURU
Use of this article allowed with attribution back to:
http://www.deflationeconomy.com
These are U.S. listed SHORT THE MARKET ETF's (Exchange Traded Funds that tade like stocks) that averaged more than 100,000 units per day in the last 3 months of 2010. Only positioned for a bear market.
List Only-Not A recommendation to buy or sell. Information only.
Source: Futures Magazine March 2011 issue
Bear Market (Equity & Fixed Income) Avg. daily Assets 3-month
ETF name Ticker F, O Fund family Exchange Fees volume (000s) ($M) return (NAV)
Direxion Daily Financial Bear 3X Shares FAZ F, O Direxion Funds NYSEArca 0.94% 33,136 1,030.00 -24.64%
ProShares UltraShort S&P500 SDS F, O ProShares NYSEArca 0.95% 26,376 2,660.00 -23.12%
Direxion Daily Small Cap Bear 3X Shares TZA F, O Direxion Funds NYSEArca 1.15% 20,334 694.36 -48.11%
ProShares UltraShort 20+ Year Treasury TBT F, O ProShares NYSEArca 0.95% 15,321 5,040.00 14.61%
ProShares UltraShort QQQ QID F, O ProShares AMEX 0.95% 11,230 755.62 -32.26%
ProShares UltraPro Short S&P500 SPXU F, O ProShares NYSEArca 0.95% 5,449 362.60 -33.07%
Direxion Daily Large Cap Bear 3X Shares BGZ F, O Direxion Funds NYSEArca 0.95% 5,375 249.43 -34.53%
ProShares UltraShort Russell2000 TWM F, O ProShares NYSEArca 0.95% 4,803 348.39 -34.62%
ProShares UltraShort Financials SKF F, O ProShares AMEX 0.95% 3,872 495.22 -16.71%
ProShares UltraShort DJ-UBS Crude Oil SCO O ProShares NYSEArca 0.95% 2,451 103.10 -24.56%
ProShares UltraShort Silver ZSL F, O ProShares NYSEArca 0.95% 2,407 76.54 -56.50%
ProShares Short S&P500 SH F, O ProShares AMEX 0.95% 2,291 1,970.00 -12.17%
ProShares UltraShort Real Estate SRS F, O ProShares AMEX 0.95% 2,199 315.32 -15.97%
ProShares UltraShort Euro EUO O ProShares NYSEArca 0.95% 1,915 464.68 -6.29%
ProShares UltraShort Dow30 DXD F, O ProShares AMEX 0.95% 1,781 438.06 -19.49%
Direxion Daily Emrg Mkts Bear 3X Shares EDZ F, O Direxion Funds NYSEArca 1.09% 1,411 N/A -33.49%
PowerShares DB Gold Double Short ETN DZZ - Deutsche Bank AG NYSEArca 0.75% 1,161 N/A -19.56%
Direxion Daily Energy Bear 3X Shares ERY F, O Direxion Funds NYSEArca 0.95% 1,101 54.49 -48.46%
Direxion Daily 20+ Yr Trsy Bear 3X Shrs TMV O Direxion Funds NYSEArca 1.13% 988 238.70 24.17%
ProShares UltraShort Basic Materials SMN F, O ProShares AMEX 0.95% 786 95.79 -33.98%
Direxion Daily Real Estate Bear 3X Shrs DRV F, O Direxion Funds AMEX 1.13% 719 71.76 -25.10%
ProShares UltraShort Yen YCS O ProShares NYSEArca 0.95% 615 214.48 -1.49%
ProShares UltraShort Oil & Gas DUG F, O ProShares AMEX 0.95% 613 105.87 -34.87%
ProShares Short QQQ PSQ F, O ProShares AMEX 0.95% 554 229.42 -17.45%
ProShares UltraPro Short QQQ SQQQ - ProShares NYSEArca 0.95% 548 N/A -44.73%
ProShares UltraShort FTSE China 25 FXP F, O ProShares AMEX 0.95% 538 204.46 -21.83%
ProShares Short Russell2000 RWM F, O ProShares NYSEArca 0.95% 533 290.11 -18.73%
ProShares Short 20+ Year Treasury TBF - ProShares NYSEArca 0.95% 458 694.58 7.44%
ProShares UltraShort MSCI Emerging Mkts EEV F, O ProShares AMEX 0.95% 409 120.37 -22.91%
ProShares Short Dow30 DOG F, O ProShares NYSEArca 0.95% 341 277.23 -10.16%
Direxion Daily Technology Bear 3X Shares TYP F, O Direxion Funds NYSEArca 1.14% 328 51.78 -41.58%
ProShares UltraShort Gold GLL F, O ProShares NYSEArca 0.95% 314 81.10 -20.72%
PowerShares DB Crude Oil Dble Short ETN DTO - Deutsche Bank AG NYSEArca 0.75% 292 N/A -23.61%
ProShares UltraShort 7-10 Year Treasury PST O ProShares NYSEArca 0.95% 275 428.75 0.33%
PowerShares DB US Dollar Index Bearish UDN F, O PowerShares AMEX 0.5% 229 168.38 2.49%
Direxion Daily Dev Mkts Bear 3X Shrs DPK - Direxion Funds NYSEArca 1.13% 223 N/A -27.08%
ProShares UltraShort MSCI Europe EPV - ProShares NYSEArca 0.95% 215 69.10 -18.69%
PowerShares DB Gold Short ETN DGZ - Deutsche Bank AG NYSEArca 0.75% 210 N/A -10.19%
ProShares UltraShort MidCap400 MZZ F, O ProShares NYSEArca 0.95% 184 31.56 -30.52%
ProShares UltraPro Short Russell2000 SRTY - ProShares NYSEArca 0.95% 182 30.79 -48.06%
Direxion Daily Semicondct Bear 3X Shares SOXS - Direxion Funds NYSEArca 0.95% 135 N/A -55.38%
ProShares UltraShort Semiconductors SSG F, O ProShares NYSEArca 0.95% 116 21.93 -40.68%
iPath Inverse S&P 500 Vix S/T Fut ETN XXV - iPath NYSEArca 0.89% 110 N/A 28.71%
ProShares UltraShort MSCI Brazil BZQ - ProShares NYSEArca 0.95% 103 21.81 -21.72%
Deflation Investing: First Step, Understand It
There is still time to prepare if deflation is indeed in our future.
August 16, 2010
By Elliott Wave International
"Fed's Bullard Raises Specter of Japanese-Style Deflation," read a July 29 Washington Post headline.
When the St. Louis Fed Chief speaks, people listen. Now that deflation -- something that EWI's president Robert Prechter has been warning about for several years -- is making mainstream news headlines, is it too late to prepare?
It's not too late.
There are still steps you can take if deflation is indeed in our future. The first step is to understand what it is. So we've put together a special, free, 60-page Club EWI resource, "The Guide to Understanding Deflation: Robert Prechter’s most important warnings about deflation." Enjoy this quick excerpt. (For details on how to read this important report free, look below.)
When Does Deflation Occur?
By Robert Prechter
To understand inflation and deflation, we have to understand the terms money and credit.
Money is a socially accepted medium of exchange, value storage and final payment; credit may be summarized as a right to access money. In today’s economy, most credit is lent, so people often use the terms "credit" and "debt" interchangeably, as money lent by one entity is simultaneously money borrowed by another.
Deflation requires a precondition: a major societal buildup in the extension of credit (and its flip side, the assumption of debt). Austrian economists Ludwig von Mises and Friedrich Hayek warned of the consequences of credit expansion, as have a handful of other economists, who today are mostly ignored. Bank credit and Elliott wave expert Hamilton Bolton, in a 1957 letter, summarized his observations this way:
In reading a history of major depressions in the U.S. from 1830 on, I was impressed with the following:
(a) All were set off by a deflation of excess credit. This was the one factor in common.
(b) Sometimes the excess-of-credit situation seemed to last years before the bubble broke.
(c) Some outside event, such as a major failure, brought the thing to a head, but the signs were visible many months, and in some cases years, in advance.
(d) None was ever quite like the last, so that the public was always fooled thereby.
(e) Some panics occurred under great government surpluses of revenue (1837, for instance) and some under great government deficits.
Near the end of a major expansion, few creditors expect default, which is why they lend freely to weak borrowers. Few borrowers expect their fortunes to change, which is why they borrow freely. The psychological aspect of deflation and depression cannot be overstated. ...
Read the rest of this important 90-page Robert Prechter's report online now, free! Here's what else you'll learn:
What Makes Deflation Likely Today?
How Big a Deflation?
Why Falling Interest Rates in This Environment Will Be Bearish
Myth: "Deflation Will Cause a Run on the Dollar, Which Will Make Prices Rise"
Myth: "Debt Is Not as High as It Seems"
Myth: "War Will Bail Out the Economy"
Myth: "The Fed Will Stop Deflation"
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