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World Deflation - Your Peaking, Fall and End of the American Empire
By Delwyn Lounsbury - THE DEFLATION GURU
How Did The U.S. Empire Get The Tribute It Deserved For The Last 100 Plus Years?
I ask you this world deflation related question about the end of the American empire. I never get the right answer. So, here goes. It is your turn!
Rome was an empire. Rome at its peak had conquered all its neighbors. Empires can demand and get tribute from those it has vanquished in the form of gold, grain, slaves, spices, silk, olive oil, wine, wild animals for the coliseum blood sports etc. The United States of America has been the main empire in the world for the past 100 plus years. We have 725 military bases around the world. So, don't you tell me otherwise.
How and why did America get the tribute it was due? Tribute is a Roman word for pay as an acknowledgment of subjugation, for protection from invasion, etc. We ruled the seas, the air, most of the markets. We were strong. We were and still are the policeman of the world. That was a big part of the reason Rome fell, by the way. They spent all their money trying to police their empire. We are rich. Wall Street ruled the world money markets. Business across the land flourished. We had natural resources (gold, iron, coal and lumber) and fertile farm land. We deserved it and I say we deserved and got tribute – IN SPADES!
How? We lived the high life all these 100 years and exported our inflation to other countries. Yes, the rest of the world had to take our rotten fiat paper money that was consistently losing value. The U.S. dollar of 1913 is now worth only 3 cents thanks to inflation caused by the combination of the Federal Reserve watering down the money, fractional reserve banking and excess government borrowing and spending. The politicians wanted inflation so they could spend more and pay back later in dollars worth less. This is also know as financial repression. What a global casino musical chairs Ponzi scheme! It puts Bernie Madhoff to shame.
We made out like bandits. We could afford a throw away society. We lived the life of luxury and drove around in big gas guzzler cars. Other countries had to take our stinking paper money that was losing 5% per year in value some years. They had to choke on it. All the while, we lived high-on-the-hog. Inflation and paper dollars were America's biggest export. Oil, gold, and most other commodities and industrial materials are priced in dollars. The dollar is reserve currency of the world. So the other countries "reserve" was constantly losing value. They had to convert their money into "watered down" dollars to buy the natural resources. We ripped off the whole world with our made-up fiat monopoly money. No wonder other countries hate us.
95% of all U.S. paper money ever printed is in other nations. There is a huge market hedging interest rate risk on our dollars in Europe. It's a debt instrument on the commodity exchange called Euro Dollars - not the Euro currency. Total Euro Dollar open interest on 1/26/2011 was a whopping $7,830,000,000,000 as people try to hedge interest rate and currency rate risk.
Our empire is ending. The GREATER DEPRESSION started in year 2000 with the dot com stock market mania peak crash and may not bottom until 2016 - 2018. China will be the next empire (20 years down the road).
You can plan on big time 90% drops in prices of real estate, stocks, corporate and municipal bonds (junk bonds may go to zero). Commodities and especially silver, palladium and platinum lose big since they are all industrial metals. They price of gold may drop in half. Finally, unemployment rates may reach 35% or more. Remarkably, gold mine stocks may soar as they will be mining money.
Antiques/art/collectable items prices will crash in the world deflation. I expect "Antiques Roadshow" to go off the air. You can't eat that stuff. I was watching it the other night and someone on the program said prices were down by 33% in some areas of collecting plus the value ranges they give are getting wider.
We are firm believers in Robert Prechter's Elliott Wave Principle and socionomic analysis. How markets and indeed all nature appears to work. Socionomics is his new joining of sociology and economics in relation to mans mood swings from positive (waxing) to negative (waning) and someday back to positive again. For now, Prechter sees societal mood waning (getting more pessimistic) until 2016 - 2018. He says the effect on investment markets will be disastrous due to the fact that man is a herd animal and always buys more at the top - right when he should be selling. Just think real estate in 2006.
Prechter has found it is better to be a contrarian investor. As the direction of the Kondratiev long wave 80 year cycle changes to deflation, you will see more media coverage of world deflation. Robert Prechter says get cash and T Bills for safety. Cash will be KING in The Greater Depression!
The Anglo financial power elite (Banksters I call them - modern day Caesars in the form of mega rich world central banking families) who will have most of their money in the safety of the U.S. They will have already sold their excess real estate and will now be in cash, safe government bonds and getting ready to short stocks, bonds and commodities. They want a global government under their complete control and they may go as far as depopulating the earth with World War Three. They don't want the dollar to lose any more value. The money they lent out would be worthless. The dollar will be strong. The power elite will be buying these assets back at ten cents on the dollar in 2016 - 2018. You should do the same.
The same thing happened in the 1930's. Inflation in the Roaring 20's led to banker's fear of lending out a depreciating asset. They got scared and quit lending. Prices of everything crashed. Then misguided and crippling government intervention and regulation by the socialist Keynesian President Franklin Roosevelt administration actually delayed recovery and caused a long depression. The two biggest myths I know of are that the New Deal and World War II got us out of the depression.
Most likely inflation will return in ten years unless we get a privately run gold money system. Only gold backed private money can keep governments honest. Only gold is not someone else's debt! How great would that be? No gold - no spending by governments worldwide to mistakenly try Keynesian bailout stimulus spending programs again. Bank, country and corporate bailouts is the game the Anglo American financial elite use to transfer debt to the taxpayer.
Speaking of orgy - Why did Rome fall? Besides Rome's profligate ways of being policeman of the world, over spending, corruption and moral turpitude, here is why. They were debasing (inflating) their money. The Caesar would have the coins shaved down in size or melted and cut with copper and keep the profit. Now days, customarily, coins are made with little ribs on the outer edge to prevent the practice. There is no precious metal in them anymore, however. Unfortunately, peoples morals seem to debase commensurately with their money.
Back then people would also keep the larger coins and spend the smaller shaved ones. This was one of the first instances of Gresham's Law in economics. Specifically, bad money drives good money out of circulation. Most U.S. silver coins before 1965 were 90% silver, specie, as required by the Constitution. Look it up - all money is to be "specie" - Gold, silver and copper only. You won't find any in your change. Since 1965, U.S. coins have had no silver in them. Remarkably, Gresham's Law happened again with the pre 1982 U.S. copper penny. There is little copper in today’s penny. It's actually zinc with a thin copper clad. Hardly any of the old ones circulate.
Roman bread giveaways and a gladiator circus' for the masses down at the coliseum have morphed into today's Food Stamps, mindless TV programming, electronic gaming, professional sports and a bloated spendthrift collectivist welfare state. A weak Rome collapsed for similar reasons and was sacked by the barbarians which started the Dark Ages. Is a New Dark Ages coming?
Not many know Roman Emperor Constantine actually kept the gold (solidus or bezant) coin honest when he moved the seat of the Roman Empire to Constantinople (now Istanbul, Turkey). That part of the empire lasted another 800 years until it fell to the Ottoman Turks in 1453. Constantine’s Rome survived largely due to the honest gold coinage.
With socialism morphing into totalitarian Marxism ruling the world aided by the likes of President Barack Hussein Obama, a one-world-government/new-world-order "Big Brother" fascist world is here. Apparently, they have been at this "Directed History" toward global governance and one-worldism for 300 years!
The collectivist conspiracy of one world government has definitely speeded up in the last 100 years with the elite now in control of all the worlds central banks. They can print money out of nowhere for god sakes! Now globalism is growing at warp speed as our freedoms and liberties are diluted daily by big bad elite controlled government!
Stand up for LIBERTY and FREEDOM and FREE MARKETS now, or you will be told what to do, where to work and what to think. Inflation has opened the door to demigods and anti-Christ's - think Hitler. World deflation is the only cure for inflation. World Credit inflations always end with a violent /world credit deflation crash. Our only hope is private gold back money and the truth spread by the "Internet Reformation" which is comenserate with the Gutenberg printing press some 500 years ago which allowed the common man to have affordable books and Bibles.
That's my tribute to tribute and fall of the American empire. The world deflationary depression started in 2000 with the dot com stock mania climax bubble top. Hurry! Time is running out to prepare yourself! Get out of debt. ASAP
PS Robert Prechter says World War Three started 9/11/2001. War in Iran and the Middle East would be disasterous.
Copyright 2010 - Delwyn Lounsbury – THE DEFLATION GURU
Reprint rights allowed with attribution back to:
http://www.deflationeconomy.com
No not the Roman kind of attribution - the English kind - silly!
G. Edward Griffin on World Deflation
WORLD DEFLATION
G. Edward Griffin on World Deflation
G. Edward Griffin: Author of “Creature from JekylI Island: A Second Look at the Federal Reserve” 1994
I would say we are in a far developed recession, but that's only my own feeling and my own words. A depression to me implies, people starving, begging and generally walking around aimlessly looking for a place to sleep. I know we have this in the United States, but it's still a relatively small percentage of the people as a whole. But it's going to keep affecting more and more people and I fear that we are going to see a global depression develop in time.
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The GREATER DEFLATION is approaching quickly!
We need to get the word out or else we will all be seeing each other down at the soup line.