Everything I have been warning you about is unfolding, right on cue.

I’m talking about DEFLATION — the D-word no one wanted to hear more than four years ago when I first forecast it. 

The D-word that had all the hyperinflationists up in arms. The D-word that even had some of my colleagues and subscribers wondering if I had lost my mind. 

After all, I too once thought that the Fed’s money printing would stir up inflation. 

But when gold peaked at $1,925 an ounce in September 2011 right after Ben Bernanke announced the most aggressive Fed printing ever, I knew something was afoot. 

Gold should have responded positively, but it didn’t. Instead, it started to crash. A crash that continues to this day.

Fortunately, I was alert and savvy enough to recognize it and start warning you early on that inflation would not be a problem. That instead, deflation would become the threat. 

I knew way back in September 2011 it was coming. But I wasn’t quite sure why deflation would gain the upper hand. After all, we’ve been taught that when the central bank prints money, it’s inflationary, period. 

But leave it to gold to signal the most important monetary changes in history, something it has always signaled through its actions. Back in September 2011, when gold failed to respond positively to more money printing, I listened to what gold was saying, I adjusted, reexamined all my models, reviewed the history and mechanics of the current monetary system …

And I took a much closer look at what was happening to global debt and in particular, the train wreck that was unfolding in Europe.

I quickly realized that …

One, there’s simply way too much debt in the world. At more than $200 trillion of official total global debts — there is simply no way printing money could offset the deleveraging process that must occur.

Simply put, $3 trillion of Fed money printing, combined with another $2.4 trillion from other central banks over the past several years — a total of $5.4 trillion of printed money — is merely like throwing a coin in the middle of a lake and expecting a tsunami of inflation. It’s not going to happen.

Combined, all the central banks of the world would have to print far more than $200 trillion for hyperinflation to ever strike.

To make matters worse, the deleveraging that started with the real estate crisis of 2008-09 has barely gotten started.

Quite the contrary, the total global debt burden has gotten worse, much worse. Since 2007, government debt has grown a whopping $25 trillion, more than $3 trillion per year. 

Total global debt has mushroomed $57 trillion since 2007, more than $7 trillion per year. 

Combined with austerity programs rammed down people’s throats in places such as Europe and Japan, total global debt to GDP has increased an amazing 17 percentage points since 2007. 

Some of the most indebted countries are absolute basket cases: Japan, debt to GDP: 517%. Spain, 401%. Germany, 258%. And the U.S., with official debt to GDP at a whopping 269%. 

I say “official” because all the figures above are gathered from reliable statistical sources and do NOT include the effect of securitization, leverage upon leverage, and shadow banking, which exists even in the U.S.

Add in a rough but conservative estimate of another $200 trillion in unofficial debt, and you have a global economy getting crushed by over $400 trillion of debt, something that can never turn out to be anything but deflationary!

Two, I also realized, way back in 2011, that the U.S. wasn’t the problem, as indebted as it was, and still is. Nor would it be China, who even today is wrongly cited as the biggest threat to the global economy.

I said way back then, and I warned you repeatedly, that the biggest threat to the global economy, and the biggest trigger to set off a deflationary spiral was none other than Europe. 

I was right. Europe was, is and will be the biggest threat to global growth and the biggest force behind deflation.

Why? I could write a novel about the problems in Europe. Suffice it to say that …

Europe’s problems began way back in 1998 with a half-brained attempt to create a United States of Europe with a single currency …

A currency that did not have the proper banking or reserve infrastructure in place to work.

A currency that forced 19 different countries and 24 different official languages into one label … 

And a currency that made it way too easy for weaker economies to join the Union, borrow loads of money at low rates, setting the stage for the collapses you are seeing now in countries such as Greece, Spain, Portugal, Italy, and soon, even France. 

The single currency experiment in Europe is the most ill-conceived economic/social experiment of all time. I said it in 1998, and my words have come true. Europe is crashing and burning.

The attempted manipulation of the monetary systems there, of the cultures, of the different peoples and their traditions, their individual sovereignty and more …

Has caused most of the problems you are seeing today, most of the deflation. And it has also set the stage for civil wars and even the potential for international war as entire societies and cultures break apart as Germany and Brussels continue to insist on austerity and holding the Union together. 

Mark my words: By 2020, the year my war cycles peak, a short five years from now, you will see Europe torn apart at the seams, the euro fail as a currency, wars break out between member countries, and even secession movements succeed within countries.

So what do you do with your investments right now, with oil and gas collapsing, precious metals still looking weak, most commodity prices falling, and the stock market still teetering?

You keep your money safe, and in the right investments, just like the members to my Real Wealth Report are doing, where I have helped them achieve a 16.9% return, year-to-date, beating out almost every hedge fund out there, almost every mutual fund and more. 

Stay safe, and stay tuned …

Best wishes,

Larry

P.S. Supercycle Trader is about to release a NEW bundle of recommendations! Click here to activate your membership in the wealth-building service that led members to 13 winners in 14 completed trades last month.

Dec 15, 2015  

1. Tomorrow’s FOMC announcement is arguably the most important Fed event of the past 35 years.
   
2. It’s a defining moment in Janet Yellen’s career, and so I’ve dubbed it as… “J Day”! The bottom line: Janet Yellen is going to attempt to raise interest rates without significant open market bond sales, something that has never been attempted. 
3. The Fed’s balance sheet has never been this large. The sheer size of open market sales needed to raise and sustain higher rates now, would cause a major panic in stock, bond, and real estate markets.
4. The debt-obsessed US government would also face massive pressure from open market bond sales, and could collapse.
5. What’s critically important now is that Janet has given her theories a test run, but that’s been with small amounts of capital. Nobody really knows what’s going to happen when she attempts to execute her rate hikes strategy with large amounts of money in the real world.
6. So, my somewhat obvious suggestion is for US stock market investors to move to the sidelines until the end of the first week in January.
7. The potential reward of a possible market rally over the next three weeks is dramatically overwhelmed, by the risks involved with Janet’s new and untried rate hikes experiment.
8. Please  click here now. That’s the latest COT report for the mini Nasdaq stock futures contract. Clearly, the smart money commercial traders are net short now, anticipating a sell-off in stocks.
9. What’s next for gold? Well, a week ago, I predicted gold bullion would trade down to about $1157, before the Fed makes its announcement. It went to $1058.
10. Please  click here now. Double-click to enlarge. In the short term, whether gold begins a dramatic rally after “J Day” or not, will depend on the language used in the FOMC statement.
11. A potential inverse head and shoulders bottom situation may be developing. To view that scenario, please  click here now. Double-click to enlarge. Gold feels solid here, and there seems to be a wave of confidence sweeping through the Western gold community. Just as citizens eventually rebel against oppressive leaders, the overly-bearish tone used by some gold gurus may backfire on them.
12. Here’s why: Stock market investors who bought value in the 1970s made a fortune in the 1980’s and 1990’s.
13. Those investors never called any stock market bottom, but they bought into it, and made enormous profits in the following years. It’s the same with gold now. I bought gold and silver into the lows of 1976, but I never wasted a single moment of my accumulation time talking about a “bear market”.
14. I accumulated gold and silver for nine years in the late 1960s and most of the 1970s. I’d urge Western gold community investors to act in a similar fashion now. Ignore the gold bear market label makers, and buy value, because making labels doesn’t make a gold investor richer.
15. Buying value with the sole tool of intestinal fortitude is ultimately 99% of the wealth building game.
16. Oil has continued to decline, and it’s the largest component of significant commodity indexes. Interestingly, Janet Yellen has referred to the decline as “temporary”. Please  click here now. That’s the daily oil chart. Note the key reversal in play, and the “risk-on” Stochastics signal. Oil traders may be anticipating a very bullish statement from Janet tomorrow.
17. Her rate hike experiment has the potential to reverse money velocity, give hope to savers, incentivize banks to put some reserves to work in the private sector, and pressure the US government to shrink itself.Low interest rates benefit debtors, and the US government is the biggest debtor on planet Earth.
18. Alan Greenspan and Ben Bernanke both engaged in a horrific strategy. They essentially attempted to turn US citizens into miniature and severely undercapitalized banks. They chopped bank interest rates and thereby “incentivized” the citizens to invest in large businesses, through the stock market. That created a drop in temporary unemployment, and a surge in permanent unemployment.
19. The Greenspan/Bernanke policy has been an unprecedented disaster for America. The bottom line for any hope of a real US economic recovery on main street: QE can take a permanent walk, and rate hikes rock!
20. To view what is probably the most important chart in the Western world, please  click here now. Money supply velocity (M2V) collapsed as the Fed lowered rates to “incentivize” citizens to move money from banks to the stock market.
21. During the 2008 financial crisis, the Fed should have revalued gold. Instead, using QE, low rates, and excess reserve payouts, the Fed revalued the banks, and devalued the citizens of America.
22. The good news: Janet Yellen has dismantled QE as I predicted she would, and now there’s a 75% chance that she grabs hold of the money velocity bear tomorrow, and ends it too, with upside pressure on interest rates!
23. Please  click here now . That’s a snapshot of the latest COT report for the yen versus the dollar futures contract. Large FOREX players use the action of the dollar versus the yen as a key indicator for gold. The banks have built a massive long position in the yen, and that’s great news for gold price fans! Please  click here now. That’s the daily chart of the dollar versus the yen. The massive head and shoulders top pattern in play is in sync with the COT report, and also bodes well for gold!
24. Please  click here now. Double-click to enlarge. That’s the GDX daily chart. In addition to “J Day”, tax season is underway now, and will continue until Christmas Eve. Despite these twin forces of negative power, GDX still has not penetrated its recent lows! Gold stock enthusiasts need to buy now, and take a solid stake in what is destined to become generational gold stock lows!

Dec 15, 2015  
Stewart Thomson  
Graceland Updates
website: www.gracelandupdates.com
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Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the Graceland Updates daily between 4am-7am. They are sent out around 8am. The newsletter is attractively priced and the format is a unique numbered point form; giving clarity to each point and saving valuable reading time.

Risks, Disclaimers, Legal
Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualifed investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an invetor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:

Are You Prepared?

Originally published December 13th, 2015.

Today we are going to review irrefutable evidence that a slow motion train wreck is already well underway across global markets, that will end with the last wagons on the train, the S&P500 index and the Dow Jones Industrials, disappearing into the abyss right after their immediate predecessors.

There are still a remarkable number of investors out there, and an even more remarkable percentage of mainstream financial journalists, who seem to think that everything is alright just because the flagship indices like the Dow Jones Industrials and the S&P500 haven’t caved in yet, but as we will now see they are probably just about to.

We start with the 6-month chart for the S&P500 index, where we see that it has just broken down from a topping Triangle, that formed after the big October recovery. This breakdown was predicted on the site last week. From this position it is vulnerable to a precipitous decline, which could happen next week ahead of the Fed meeting, or after it – or both…..read more HERE

1. Governments Are Flat Broke – Protect Your Money

    by Simon Black 

One of the major themes of this daily e-letter is that major western governments are flat broke.

This is not the first time that a major world power has gone bankrupt, and we need only to look to history to see the consequences.

Thousands of years ago, as Rome’s bleak financial condition deteriorated, it didn’t create a crisis all at once.

 ….read it all HERE

2. Why Everyone Has It Wrong About Yellen’s Next Move

   by Bill Bonner

(leftists, socialists, Democrats) want lots of little handouts (rightists, Wall Streeters, Republicans) want fewer but bigger ones. 

All the loot comes from the voters – who willingly give up both their money and their liberty believing that, somehow, they are better off for it. 

But the real winner is the Deep State. It usually controls the candidates… and continues to gain power and resources, no matter which side wins.

….read all HERE

3. Extreme Leverage in a Gold Futures Market Nearing the Breaking Point

   by Clint Siegner

Maybe, at last, the gold shorts are getting nervous about the extraordinary leverage in the futures markets. Coverage continues to decline. Recent reports show 325 paper ounces in open interest for each ounce of registered physical stock. HERE