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Gold Deflation in the Greater DepressionBy Delwyn Lounsbury - THE DEFLATION GURU The history of gold and deflation is not good. The history of gold mining stocks and deflation is excellent as prices of mining stocks shares and the dividends they paid soared all during the 1930's depression. Why? They were mining your money! Gold may have peaked August 22, 2011 at $1,912.70. If you look at a price chart you will see it looks like a hockey stick. This is a hyperbolic price chart. It is sign of a definite interim topping action. As they say "a tree can't grow to the sky." Gold should now do an Elliott wave/Fibonnaci retracement if .618% or to about $730 per ounce in the next few years. Then you should load up on presciou metals and their mining stocks. Central banks of the world owned by the Anglo American financial elite who want a formal one world government and new world order with you and I as their slaves are printing money like mad out of thin air. Here in 2012 the money supply has been balooned by 300% since 2008 with FED quantitative easing a.k.a money printing. You will see most other assets will crash 90% or more including stocks, corporate bonds, real estate, art and collectibles. Note - high gold price prima facie proof politicians world wide are not doing a good job economically. The gold price graph went hyperbolic recently to $1,912 per ounce, which is a sure sign of a top. "No tree can grow to the sky." Remarkably, the total asset value of the Gold SPDR ETF (symbol GLD)reached $77.9 billion eclipsing the asset value of the S & P 500 ETF. Now, gold should do a 61.8% retracement to around $750 per ounce. Helping put a cap on people herding into gold were two margin hikes on futures by CME (Chicago Mercantile Exchange) in August of 2011 of a whopping 55.6 percent from $6,075 to $9,450 per 100 ounce contract. Likewise, silver's historic rise was ended by an 84 percent rise in margin between April 26th and May 5, 2011. We recently had a worldwide banking crisis and gold and silver have recently ramped up in price due to monetary stimulus, fear and uncertainty. I am a big fan of gold, but gold and deflation could mean a drop of 61.8 percent in its price peak of $1,912. It is still catastrophe insurance and will probably not drop the 90 percent some other assets may. Gold is money. Gold mining stocks after a deep pullback could soar again as they did in the 1930's depression. After all, they will be mining money. What the world needs is private gold backed 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 enterprise free market money. Don't trust any government sponsored and controlled fiat money. They always play financial repression to ruin the value of paper money and inflate the daylights out of it. They insidiously and fraudulently figure on paying pack their debts with money that has lost value. It's a hidden tax. Neo-Keynesian governments and their central banks are pure counterfeiters. Gold has a 5,000 year history as mankind's money. Egypt flourished due to gold mines they found in northern Africa. Just about every powerful nation or empire since had a gold find inside its boundaries or a gold rip off from another country as it basis. Spain became a great empire due to the South American gold it plundered. America had major gold strikes like the California gold rush with Alaska the last big one. Gold is honesty. Only gold will prevent a future runaway hyperinflation. Hyperinflation helped Hitler hustle everyone. Do not let the world go there again! You will only get the anti-Christ besides the "anointed one" we already have in office. I mean it. Credit inflation debt does this dastardly deed. A deep deflation is only the cure for credit inflation. Gold backed money will keep us from repeating the whole fiat money, inflation, deflation followed by depression "conga line" again and again. ONLY GOLD! Only gold and deflation will cure inflation. Only gold is not someone else's debt instrument. That is why governments are always at war with gold. A high gold price is proof they are doing a bad job with the economy. Money can now be made with just a computer entry. Witness President Obama's Quantitative Easing 1 & 2 (QE1, QE2) The Federal Reserve Bank (a fraudulent monopoly and cartel - not federal at all) prints (it’s actually just a computer entry) and sells over $1.5 trillion dollars worth of bonds and gives the U.S. government the money. It won't work. The Greater Depression is in control. The Greater Depression started with the 2000 dot com stock bubble top and may last until 2016. Inflation could ramp up to the moon if we let our governments keep borrowing and spending more than they bring in. I don't think it will in the next five or six years. The world has to go through a big deflationary crash first to cure the excess credit inflation in the system. Money and wealth is already disappearing faster than governments can create it and the snowball of deflation will only pick up speed. Just look at real estate prices. The Austrian school of economics says all credit inflation bubbles end with a severe credit deflation crash. After 2016-2018, hyperinflation could come roaring back. My guess is that it will unless gold is the backing of a private money system. Do not let government control the money! They will just start up fiat money inflation, credit inflation, fractional reserve banking, financial repression and the rest of the fraudulent Keynesian big government money schemes. Gold would go to way over $5,000 and ounce if government tries to artificially inflate the economy out of the Greater Depression. Only a free market will enable the private sector to create jobs. For the whole world only smaller governments and sound honest money will be the salvation. Most governments of the world, including the U.S. and the rogue President Barack Hussein Obama, follow Keynesian economic theory. It is a socialistic spending spree that Franklin Roosevelt started our country on. This means they will try and throw massive amounts of money at the problem. It won't work. This is what President Roosevelt did instead of letting business and free enterprise do the job creation and economic healing. Roosevelt outlawed gold ownership on April 5, 1933. How crazy was that! Franklin Roosevelt's socialist policies actually delayed America emerging from the Great Depression. It's a myth that the New Deal saved us. Anyway, his ban on gold bullion ownership was not repealed until President Ford lifted the ban August 26, 1974. Personally, I know Franklin Roosevelt was a Marxist socialist fascist. Fascism is when leaders get control of business people and the military then run roughshod over the judicial, legislative and even his own executive branch. Just like President Obama is doing right now. Our U.S. Constitution is toast under this Obama fascist. Gold could go five thousand of dollars per ounce in a future runaway inflation government spending orgy. But only after the Greater Depression has its way with the world. As far as gold and deflation in the Greater Depression, I expect gold goes back down to $500. Copper silver and platinum are industrial metals and will be quite weak in a deflation economy. One of the best ways to judge if gold is over or undervalued is to compare the price per ounce to the price of a top notch men's dress suit. A great suit was a twenty dollar gold coin back in the 1930's. An Armani suit must be $1,912 here in the fall of 2011 - although, I have not priced one lately. Af for gold deflation investment at the end of the deflation and depression. Don't buy gold at today's prices of $1,600 per ounce. This is nosebleed territory. The price is way too high. Gold mining stocks are another matter when it comes to gold deflation investment consideration. Although gold mining stocks are probably too high right now, you should be aware that Homestake gold mine stock went from $65 a share in 1929 to $544 in 1936 and paid a whopping $56 in dividends in 1935. Why? They were a safe haven and they were mining money. They could even pay their workers in what they were producing. You might want to look into the best gold mine shares at some point but only at much lower prices. Did you know that the American Constitution says all money will be specie? No, not some alien hitching a ride on a spacecraft. Specie is gold, silver and copper coinage. Real money! The government has been violating its own Constitution for years. It is still in there - specie. Look it up! With gold deflation, I would say gold mining company stocks will do remarkably well if bought at lower price levels. Gold deflation may mean their dividends soar. Governments will never stop inflating in the long run so, unless actual gold is backing a privately run paper money and readily redeemable without question the fraudulent monetary medling manipulations of central bank fiat monopoly money are not over. The watering down of paper money is the way the Anglo American financial power elite who own or control 150 central (sovereign) banks get rich. Right! Inflation! Copyright 2011 by Delwyn Lounsbury – THE DEFLATION GURU Use of this article allowed with attribution back to: http://www.deflationeconomy.com See also how the financial power elite central bankster families plan a worldwide dictatorship with you as their serf or slave. That is if you are not culled in the coming phony Iran war leading to phony World War Three and then a New Dark Ages if we don't stop the United Nations totalitarian takeover. http://www.one-world-government.org Hurry GOLD DEFLATIONLikewise, your wealth can also just evaporate into nothingness. Real estate prices have dropped by 30 to 50%. Where did your money go. Trillions - Poof! Gone! Stock and bond market crashes - your retirement, your savings and fortunes - more trillions gone in a neuron nanosecond. All the governments of the world put together can not stop the destructive deflation depression that is coming our way. One thing about gold and deflation investing - at least your investment will not go to zero. Don't forget! When it comes to gold deflation in a depression - cash is king. Not gold gold is king in an inflation. Gold stocks, however, will be mining money. Get gold stocks after gold tanks to around $750 per ounce. The Anglo financial power elite have most of their money in dollars. The dollar is still the reserve currency of the world. They don't want the value of their holdings to erode any more. The same thing happened in the 1930's depression. Banks and lenders pulled back. Then business people hunkerd down. They elite have already sold most of their real estate and will now be selling and shorting stocks, bonds, and commodities like gold and silver. Gold is more of an inflation investment because it is not someone else's debt. Unlike paper money and bonds it has intrinsic value and is not a debt instrument. Governments hate this honesty factor of gold. It is government (and especially the one world government/new world order bunch) that wants inflation so they can print money out of thin air and spend more than they bring in and pay off their debt and profligate spending with cheaper debased money. This is actually a definition of bankruptcy. High gold prices mean government is not doing a good job. For that reason governments are always at war with gold. They are always trying to keep the price of gold down. Gold and deflation still means honesty and safety. It always will. Get some as insurance. 5 to 10% of a portfolio. At lower prices. The only cure for inflation is a deflation. Let's hope a private gold backed money is developed in the future. That would prevent a hyperinflation in the future. Don't trust the money if it is a government run program! Until there is private gold backed money to keep government honest things will not be right. Remember private enterprise gold backed money. Not some paper gold like they tried to stuff down our throats before. Get gold, silver, platinum and palladium at cheaper prices in 2016 or so. That should be your gold and deflation investment strategy. Think of it as insurance just in case they open the inflation spigot again under the guise of jump-starting the economy. You know they will. Gold coins in 1 ounce mintage of no collector value are great ways to buy. Store in a safe vault or bank safe box. The XAU trades on the stock exchange. It is an index of gold mining stocks. You can buy it, short it and buy call & put options on it. Remarkably, gold stock shares soared during the 1930's depression. Why, well they were mining money. Gold has been money for 4,000 years. Homestake gold mine shares went from $65 to $544 in the 1930"s. Homestake paid a remarkable %56 per share dividend in 1935. Gold mine stock share prices are sky high here in the middle of 2011 with gold price near $1600. Buy gold mike stocks at lower levels. Also, the shares in CA: CEFA (Central Fund of Canada on the Toronto Exchange) is a pure gold and silver play. It trades like a stock. Remarkably, one can now buy and sell and short gold, silver, palladium and platinum through your stock broker with a new ETF (exchange traded fund). The symbol for gold is GLD, silver SLV, palladium PALL, type PLATINUM platinum. There are even options on the gold ETF - puts (betting the price will go down) and calls (betting the price of gold will go up). These have a time expiration and you could loose everything you put up if there is no movement in price. There is also a platinum index stock fund ETF - PLTM. A new ETF - symbol DUST is short or bearish gold mine stocks. Silver, palladium and platinum are industrial metals and do not do well in a deflationary depression When you think of gold and deflation. Think insurance against big breakdowns in law and order and the usual ways of business. Who knows what will happen. Riots. Atom bombs going off. The GREATER DEPRESSION will be 3 times larger and longer than the 1930's depression. So, all bets are off except survival. As for gold and deflation - get some as insurance. You will probably be able to buy gold at 1/2 or less than today's $1,600 per ounce price at some time in the next 5 years. Always be prepared! For more about gold and what is deflation get Robert Prechter's New Your Times best seller list book CONQUER THE CRASH. Get 8 chapters FREE by joining Club EWI at links. PS CASH IS KING IN A DEFLATIONARY DEPRESSION ALTHOUGH GOLD STOCK MAY SOAR DUE TO TO FACT THAT THEY WILL BE MINING MONEY. GOLD ITSELF ALONG WITH SILVER MAY LANGUISH. Alan Greenspan – Gold Bug "In the absence of the gold standard there is no way to protect savings from confiscation through inflation. There is no safe store of value without gold. This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the hidden confiscation of wealth. Gold stands in the way of this insidious process that stands as a protector of property rights." - Alan Greenspan - 1966
GOLD AND DEFLATION CONTINUEDThe following is from Elliott Wave International. Join Free Now! Quadrillion Dollar Debt: 'Day of Reckoning' Looms What Will Happen as $1,000,000,000,000,000 in Global Debt Winds Down? July 22, 2010 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. Want to Know How to Prosper in a Deflationary Depression? If you haven't yet given Robert Prechter's deflation argument your full attention, you should know now that yesterday was the best time to do so. Download Prechter's 60-Page Guide to Understanding Deflation here. 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. We've heard plenty about the debt problems of Greece, Spain, Portugal and Italy. But how about the world's second largest economy? Consider this fact reported in the Japan Times (July 8): "Japan's government debts are the highest the world has ever seen, at 219 percent of gross domestic product, according to the International Monetary Fund." Then there's the world's sixth largest national economy. In January 2009, Robert Prechter wrote this in the Elliott Wave Theorist: "British banks have amassed $4.4 trillion worth of foreign liabilities, twice Britain's annual GDP. ... England, moreover, 'has not defaulted since the Middle Ages.' The possibility that it may do so again is yet another indication that the bear market is of ... (larger) degree, exactly as Elliott wave analysts have predicted all along." Remember, Japan and Great Britain are major world economies. Imagine what the debt totals would look like in a line-item analysis of other nations, regions, states, provinces and municipalities around the world, including the U.S. De-leveraging will likely lead to a deflationary crash -- a "day of reckoning." How can you prepare for a deflationary crash? To start with, keep your money safe. As Bob Prechter mentions in the June 2010 Elliott Wave Theorist: "Investors should be primarily in greenback cash and Treasury bills." He also describes holdings which should be strictly avoided. Want to Know How to Prosper in a Deflationary Depression? If you haven't yet given Robert Prechter's deflation argument your full attention, you should know now that yesterday was the best time to do so. Download Prechter's 90-Page Guide to Understanding Deflation by joining Club EWI FREE at links. This article, Quadrillion Dollar Debt: 'Day of Reckoning' Looms,was syndicated by Elliott Wave International. EWI is the world's largest market forecasting firm. Its staff of full-time analysts lead by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world. Money Coiner Convicted by Fake Fiat FBI - Case
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