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Deflation Survival Guide: Are We Set Up for a Perfect Storm?
YOUR DEFLATION SURVIVAL GUIDE
Your Deflation Survival Guide for the Greater Depression
By Delwyn Lounsbury - THE DEFLATION GURU
Your Deflation Survival Guide for the Greater Depression: It is going to be more important to have the return of your capital than to have a return on that capital in the coming years.
Deflation and hyperdeflation have direct consequences on you and your family’s survival and safety. History will come to call this the GREATER DEPRESSION. There are, however, ways for you to survive and even get rich while most everyone else loses money.
Wealth can evaporate into nothingness in deflation and hyperdeflation. Real estate prices have deflated by 30% to 70% in some areas. Where did the money go? Trillions - Poof! Gone! Vanished! Stock and bond markets will crash. People's retirement, savings and fortunes will be gone in a neuron nanosecond. All the governments of the world put together can not stop the destructive deflationary depression that is coming our way. It's the only cure for the methamphetamine of credit inflation. Austrian economics tells us credit inflations always crash and become credit deflations. It can happen very quickly.
What is deflation? It is less money in circulation resulting in a rise in it's value and a fall in prices. It is the popping of the crazy credit inflation mania bubble. The world economy actually peaked with the dot com stock market climax blow-off top in 2000. First real estate tanked. Now, stock and bond markets are experiencing a big 13 year topping process and will be the next shoe to drop. Trillions of dollars in perceived value vanish in stock and bond market crashes.
The U.S. government and the Federal Reserve will not be able to stem a contraction of this magnitude. People’s mood wanes and they pay off debt and slow down their buying. "These troubling times." "These tough economic times." You have heard these in the news. Well, you ain't seen nothing yet. Deflation Dead Ahead! Cash will be KING!
Paper wealth is everywhere. There are stock certificates, paper money, paper IOU's in the form of bonds, paper notes and paper deeds of trust on real estate. There are more mountains of paper loans on everything from credit cards to car loans to the paper debt with just your signature. No collateral was needed at all if you had a high enough credit score, good job and good payback history. In a deflation creditor’s trust in the solvency of those assets wanes and then it turns to fear. 100% losses are common if no one is making payments. Our paper money is by fiat. That is French for, "let it be made." It's all a big ponzi pyramid scheme. BEWARE OF FIAT MONEY!
Remarkably, CASH IS KING in a deflation and hyperdeflation. Cas increases in value as everything else looses. You can survive deflation and buy bigger better home free and clear if you just wait and hold on to cash until the bottom in 2016 - 2018. Expect a 90% drop in most asset prices. Even gold may drop in half and unemployment may eclipse 30%.
Define deflation: A recession is when your neighbor is out of work. A depression is when you are the one out of work. A recovery is when President Barack Hussein Obama is out of office.
What the world needs is gold backed private money or we are doomed to repeat this whole inflation inflicted infection mess again. Only gold is not someone else's debt. Only gold should back only private money. Only gold can keep government honest.
The coming stock market crash will be three times bigger than the 1930's and lasting into 2016 to 2018. The Dow will be below 1,000 at that time. Prices will not come back for years and years. The buy and hold investment strategy (because in the long run you will come out ok) does not work when the big developing, deep, dark, dangerous, deflation economy and GREATER DEPRESSION comes a-knocking.
The whole world is experiencing the ending of an eighty yearlong Kondratiev wave business cycle (see article). This cycle went way overboard due to wholesale fiat paper money creation. Then, that morphed into an electronic money credit creation climax binge. Now, we have the insanity of creating money with just a computer entry. The top was the year 2000 dot com mania stock top and crash. We are 11 years into the Greater Depression already! Just look at a long term graph of the NASDAQ stock market. It has only managed to gain back .618 percent (the golden number) of the 2000 high. This is a bear market (fools) rally in a secular bear market.
The federal government in cahoots with the Federal Reserve Bank (not a bank but a monopoly cartel) has supported a policy of letting banks have first minimal reserves backing deposits (fractional reserve banking) and now since the late 1990's no reserves at all. Fractional reserve banking is when multiple banks lend out the same money deposited in a "daisy chain" (ponzi scheme) of money creation. This led to the largest credit creation inflation blow off of all times. It's all coming unwound. The next 5 years will not be pretty!
High unemployment is setting up a snowball effect - a vicious circle cycle of layoffs upon more layoffs. People don't buy as much. Then businesses have to fire workers. Those workers plus the others already without jobs can't buy stuff. In subsequent years employers have to layoff more. This goes on until the excesses of the credit inflation period are liquidated. This is the Multiplier Effect in economics in reverse. Look it up. It feeds on itself! Plus, it goes a lot faster on the way down than on the way up.
That's how you define deflation at this stage. No one, including the federal government can stop the deflation pendulum from swinging all the way to depression. The only cure for inflation is deflation - it's a healing process.
To survive deflation you need the safety of short term 90 day U.S. Tbill or money market funds that only invest in Tbills.
They pay little interest currently. Interest rates will ramp upward (maybe 15% plus) at some point as businesses and people borrow at any rate to survive the depression. U.S. bonds may stay strong for a while, but high interest rates will eventually hammer down their value. Robert Prechter says to short (sell) stocks and commodities. There are ETFs (exchange traded funds) that trade like stocks, to do this with. Contact your broker.
Deflation Survival Guide - stockpiling food, water and supplies and living in a safe place. Have a firearm. No permit is needed for a shotgun or rifle. Just have a trigger lock on it for safety.
See also possible NEW DARK AGES that may result from the collectivist conspiracy.
Copyright 2011 by Delwyn Lounsbury - THE DEFLATION GURU
Use of this article allowed with attribution back to:
http://www.deflationeconomy.com
Deflation Survival Guide - Grow a Garden and learn about easy food dehydrating at link below! Soon we will all need to be planting vegetable in both our back and front yards to survive the deflation.
Delwyn Lounsbury, THE DEFLATION GURU Survival and Gardening Tips
TIP - I do this whenever I plant a garden. Lay down heavy duty black plastic sheets and cut a small X where you are growing a plant. Hold the plastic down with boards, rocks, pea gravel, sand, dirt, tan bark, woodchips or mulch.
You will be amazed! You will use less water, have few weeds, plants will be larger and yields will come earlier in the season.
I get FREE tough (10 - mil) plastic bags my city uses in their trash containers from their large trash collection bins (dump the trash and then slit the two sides and rinse off). Will last for several years.
Poke numerous small holes if you sprinkle irrigate or depend on rain water. Chico of "Chico's Gardening" book fame used to shoot the wadded up plastic from a distance with a shotgun to get plenty of holes.
Best for warm weather crops. Works great for larger cold weather
vegetable plants like brocolli, cabbage, peas, lettice etc.
Learn about easy food dehydrating - Click on link below!