A global media aggregator of social, political, economic and market insight.
 

The end of the line for Global Deflation News – Shutting down today

A message from Sannleikur Komist: I will be closing down the Global Deflation News website effective today. The site will remain active until midnight, July 15th, but no further articles will be    Continue reading »

Texas to repatriate $1 billion in gold, doesn’t trust the New York Federal Reserve

Until a few years ago, Texas had over $1 billion dollars of gold stored in the vaults below the New York Federal Reserve. But in 2011 the Texas legislature authorized the state    Continue reading »

Peter Schiff’s warning is Déjà vu all over again

EDITORIAL One of the people who saw the 2006 real estate crash coming and the 2008 stock market crash was Peter Schiff. In this video discussion, Schiff describes the “state of the    Continue reading »

The Biggest Debt Bomb in History and the Fuse is Lit…
a 3-part report from Elliott Wave International

By Elliott Wave International Whatever your politics, creed or nationality — we can all agree that a huge catalyst for the 2008-9 global financial meltdown was the universal binge of bad credit.    Continue reading »

SEC Commissioner Stein fed up with criminal waivers for TBTF banks – writes a scathing dissent

EDITORIAL It is no secret in the financial world that the role of the Securities and Exchange Commission (SEC) is largely symbolic these days. The SEC’s mission statement says their role is    Continue reading »

IRS says it will return $107,702 illegally seized from North Carolina store owner

If you think your money is safe because it’s in a bank you would be wrong. A North Carolina convenience store owner found that out the hard way when the IRS showed    Continue reading »

Peter Schiff says Bernanke really believes he saved the world from financial Armageddon (audio)

EDITORIAL There are no two people in the business of economic analysis more unlikely to be seen together, much less posing for a photo together, than Peter Schiff and Ben Bernanke. Schiff    Continue reading »

More proof that central banks have declared a “War on Cash” – Greece introduces a surcharge for withdrawing cash

A run on the Greek banks is inevitable as the economy slumps badly and the fear of a banking collapse looms large. But the Greek finance ministers are hoping a substantial “transaction    Continue reading »

U.S. Deflationary evidence continues to mount – trade deficit means US GDP probably negative in the first quarter

Some economists and pundits have tried to blame the West Coast container ship debacle for the declining U.S. export numbers in the first quarter, but denial of a shrinking economy can only    Continue reading »

Recognizing changing social mood is key to understanding why the herd is causing the stock market to fall

EDITORIAL You have often heard me say that it is “endogenous social mood”, i.e., the subconscious mood of the collective herd that moves markets. It’s not news or current events as so    Continue reading »

Anatomy of a bubble – How the Federal Reserve and the U.S. Congress have created a debt crisis of historic proportion

To understand where the stock market is going we first need to understand from where it has come. Let’s start by comparing the currently in vogue macro economic philosophy, Keynesianism, to a    Continue reading »

Inflation vs. Deflation – Part 1
Which one is controlling the fate of America and will it cause the next Great Depression?

By Sannleikur Komist Question: “Most people who believe that we will slip into a depression seem to think it will be caused by inflation brought on by the collapsing of the dollar. Why    Continue reading »

Dow Jones Industrial Average
Baseline Elliott Wave Count from 1964 to 2014

With every great inflation comes an inevitable deflationary correction, economic yin and yang. Elliott Wave Theory is telling us that the point of deflationary reversal has arrived or will very soon. In    Continue reading »

The Creature from Jekyll Island
The End of the Federal Reserve System – Part 1

By Sannleikur Komist Editor I’m going to tell you a story – a story of corruption, deceit, greed and political intrigue. As it turns out, a true story, one stranger than fiction    Continue reading »

 

The end of the line for Global Deflation News – Shutting down today

Global Deflation News

A message from Sannleikur Komist:

I will be closing down the Global Deflation News website effective today. The site will remain active until midnight, July 15th, but no further articles will be posted. After that it will be taken down completely.

I wish I was able to continue operating the website but circumstances force me to put my efforts elsewhere. I appreciate the support and positive responses I have had from many of you who have been regular readers and contributors. Thank You.

—————————————————————————————————–

As regular readers know, GDN has been dedicated to tracking global economies and the U.S. stock markets. Toward that end, I want to provide one final update on the state of the markets and a last look at current events and how they reflect on the global economic future.

I view the world through Socionomic eyes. (If you do not understand what that means please refer to the website http://www.socionomics.net/ for a complete explanation and new way of looking at social causality)  So when I see events like those occurring this week in Europe, and especially Greece, I see negative social mood creating a completely expected and anticipated situation of tension and anxiety which will only get worse because social mood is declining worldwide. I know social mood is declining in Europe and around the world, not because of current news or events, but because the stock markets around the world have been telegraphing waning mood for a couple of years now. The stock markets are the single best indicator of the changing mood of society available.

Elliott Wave Theory is the best, most accurate, market tracking theory I know about. The Elliott Wave Principle is a detailed description of how financial markets behave. The resulting charts reveal that mass psychology swings from pessimism to optimism and back in a natural sequence, creating specific Elliott Wave patterns in price movements. Each pattern has implications regarding the position of the market within its overall progression, past, present and future. I am eternally grateful for the knowledge and help I have obtained over the years from Robert Prechter’s global market analysis company, Elliott Wave International. His book, “Conquer the Crash” was indispensable in my understanding of the coming economic collapse.


The stock markets in the U.S. have begun to follow Europe’s lead and will soon collapse quite hard in an effort to catch up. Negative social mood in the U.S. may even surpass Europe in the not too distant future. The efforts to levitate the stock markets by the world’s central banks, in particular the U.S. Federal Reserve, has created the largest credit bubble in the history of the world and one that has now, finally, begun to implode. The results will be global catastrophe beyond anything  imaginable today.

As the debt of the world is destroyed by loan defaults, bankruptcies, corporate failures, bond market implosions and equity market collapses, many sovereign nations will be forced to realign themselves with countries other than their current alignments. Trade conflicts will force nations to engage in embargoes and trade restrictions on imports and exports. Global tension will likely cause wars to break out between former friends as well as adversaries.

Don’t be surprised if Greece turns to Russia for economic support when its European Union creditors refuse to accept that it is incapable of repaying its debts to them. Loaning money to a bankrupt nation was not a good idea at the time, nor is it now. It was a move by the ECB and the IMF (and the U.S. Federal Reserve) to impose power and control over a small nation by making it financially subservient to the larger nations. The move has failed, much to the surprise of Greece’s creditors, because Greece has unexpectedly decided to choose default in lieu of austerity, the tool its creditors believed would insure their domination over the tiny economy. Much suffering will result, it’s inevitable, and in the coming months, Spain, Italy and Portugal will follow Greece’s lead.

China’s economy is collapsing also. The bubble created by it’s speculative housing boom has burst. China’s financial system is no longer controllable by the central government as it was just a few decades ago when the Communist Party could dictate fiscal and monetary policy. Today, much of the wealth of the Chinese oligarchy is stored outside of the country in U.S., European and off shore bank accounts. As those economies collapse, so will the wealth of the Chinese exposed to the failing economies.

The Chinese people, including house wives, shop keepers, college students, grand parents, businessmen and almost everyone else, are eagerly investing in the Chinese stock markets. It’s an extraordinary mania much like the mania in the U.S. before the 1929 stock market crash. The Chinese people will lose a great deal of their investments as the Shanghai Composite, Heng Seng and other markets continue to implode. The Shanghai Composite is down 3.33% today and 22% since June 12th. But unlike the debtor nations in Europe and the largest debtor nation in the history of the world, the United States of  America, China is a net creditor to the world, holding nearly $2 trillion in U.S. bonds ($1.2 trillion according to the Fed), money that may never be repaid in full because the U.S. simply doesn’t have the means to repay it. These kinds of financial imbalances can create political tensions solvable only by armed conflict. Let’s hope it doesn’t come to that.

Japan is a trouble spot with a bleak future. Fukushima not withstanding, Prime Minister Shinto Abe’s monetary policies have been abysmal failures and have created even more unpayable debt for the already cash strapped nation. The third largest economy in the world has suffered from deflation since the early 1990′s and will continue to do so for at least the next decade, probably longer. Japan’s political disputes with China over island territories in the South China Sea threaten to drag the U.S. into armed conflict with the Chinese in support of the Japanese because of treaty obligations since WWII. The U.S. tries to walk with swagger wherever it goes all over the world, but it’s posture in Asia is nothing but bluster and the Chinese have told them so. To threaten China in this theater would be a dangerous and futile effort. The Chinese military is not afraid of the United States and it would be a mistake for the U.S. to provoke them to the point it is forced to find that out.

Russia is an interesting economy. The collapse of the Soviet Union has created a nation that, in many ways, is stronger than it was before it broke up. The story goes that Ronald Reagan outspent the Russians on defense who subsequently bankrupted because they couldn’t keep up. While that narrative has some merit, it doesn’t present a complete picture or explain the global economic situation that exists today. The U.S. outspent the Russians alright, with borrowed money. The U.S. went hugely into debt as Greenspan and the Federal Reserve printed whatever the U.S. government needed to feed the insatiable appetite of the military-industrial complex. As a result, the U.S.  economy collapsed from the debt load in 2000 but was shored up by the Fed’s unprecedented low interest rates which inflated the sub-prime housing bubble. That bubble burst in 2006 taking the stock market with it in 2008. Having learned nothing from three economic collapses, the U.S., instead of paying down the debts to its creditors, has continued to spend money it doesn’t have through several rounds of Quantitative Easing (QE) programs, roughly doubling its debt in the last eight years, a debt in excess of $18 trillion dollars and still growing daily. A large portion of that debt, close to $1 trillion in Treasury notes( $0.5 trillion according to the Fed) is owned by Russia. Like China, Russia is now a net creditor nation and thus will not suffer as greatly from the coming deflationary collapse as the debtor nations of the world which will be forced to default on their global obligations. It’s not hard to imagine that U.S and Russia relations could become terribly strained should the U.S. default on its Treasury obligations to Russia.

Although the U.S. likes to portray Russia as an “evil empire” a la Reagan, and has persuaded much of Europe (through the tentacles of the NATO alliance) to sanction the Russian economy over the conflict in Ukraine, in the end, sanctions will be futile because the European nations will need Russian oil and commerce much more than they will need U.S. commerce or military support. Commerce will be a primary destabilizing factor in Europe once the EU economies succumb to deflationary pressures and individual nations are forced to create individual economic alliances. On the whole, Europe doesn’t have the disdain or distrust of Russia that the U.S. has and has tried to foment in areas like Ukraine, Afghanistan and Iraq. If Russia has the patience to wait it out, the U.S. people will eventually force its armed forces around the world to return to the states and re-allocate the money it was spending to wage war around the world to shore up its ailing economy at home. The danger, of course, is that the U.S. will poke the bear in the eye, either intentionally or accidentally, before that can happen and a conflict neither side really wants will ensue. Ukraine is a nuclear nation as are Russia and the U.S. An accident there could be catastrophic for the entire world.

I will leave you with the last chart I will post here. At today’s close, the Dow Jones Industrial Average has now confirmed that the stock market has entered a final collapse into Cycle degree wave C which will carry it far below the 2009 low of 6550. In fact, much lower. In my previous update I stated that a close below 17733 would confirm that the Dow had peaked and Cycle degree wave C was underway. Today’s close at 17596.35 meets that criteria.

Today’s close also confirms that Intermediate degree wave (5) was, indeed, an Ending Diagonal Triangle. The triangle peaked on May 20th and the primary wave count we have followed since that time is now confirmed.

By the way, my pen name, Sannleikur Komist, is Icelandic, literally translated “Truth Seeker“. That was always my goal in these pages.

Good luck to all. The next few years will be hard and anxious ones. I wish each of you well.

Dow Jones Industrial Average

Click here to see wave degree labeling key (popups required) -- Click on chart for larger image.

Texas to repatriate $1 billion in gold, doesn’t trust the New York Federal Reserve

Dateline: Austin, Texas, 6/12/2015
Media Outlet: Epoch Times
Article Headline: Texas Gold Bill Becomes Law, State to Remove B Worth of Bullion From New York
Map View:

Until a few years ago, Texas had over $1 billion dollars of gold stored in the vaults below the New York Federal Reserve. But in 2011 the Texas legislature authorized the state to move the gold, primarily belonging to the University of Texas and the Texas Retirement System, to the private vaults of the HSBC Bank of New York. Along with this move came the genesis of Texas House Bill HB 483, which was introduced by state Rep. Giovanni Capriglione and signed into law on Friday, June 12, by Governor Greg Abbott, authorizing the Texas Office of the Comptroller to build and maintain the Texas Bullion Depository.

Dow Jones Industrial Average
Elliott Wave update for week ending 6/5/2015

Dow Jones Industrial Average

Click here to see wave degree labeling key (popups required) -- Click on chart for larger image.
By Sannleikur Komist

Both the Dow Jones Industrial Average  and the S&P 500 Index closed lower this week. Both also crossed major trend lines of support, further confirmation that the markets are exhausted and that a major trend change is underway. 

Peter Schiff’s warning is Déjà vu all over again

Peter Schiff warning

EDITORIAL
By Sannleikur Komist

One of the people who saw the 2006 real estate crash coming and the 2008 stock market crash was Peter Schiff. In this video discussion, Schiff describes the “state of the economy” as well as I have seen anyone discuss it save for Robert Prechter of Elliott Wave International and David Stockman, former chief economist during the Reagan administration. The few minutes spent listening to Schiff in this video is like a special class in Austrian School economics… and it’s free.

S&P 500 Index
Elliott Wave update for week ending 5/29/2015

S&P 500 Index

Click here to see wave degree labeling key (popups required) -- Click on chart for larger image.
By Sannleikur Komist

The S&P 500 Index made a new all-time high this week. But the wave count remains ambiguous as to whether or not a final top has been put in place. The coming week should provide the answer.

The Biggest Debt Bomb in History and the Fuse is Lit…
a 3-part report from Elliott Wave International

debt bomb

By Elliott Wave International

Whatever your politics, creed or nationality — we can all agree that a huge catalyst for the 2008-9 global financial meltdown was the universal binge of bad credit.

A huge part of that bad-debt pile was the “don’t-ask-don’t-tell” high-yield bonds — a.k.a. junk bonds — which were used to fund a lot of things, including corporate takeovers.

U.S. Dollar Index
Elliott Wave update for week ending 5/22/2015

U.S. Dollar Index

Click here to see wave degree labeling key (popups required) -- Click on chart for larger image.
By Sannleikur Komist

The U.S. Dollar Index has had a very positive last couple of weeks causing some to speculate that its recent pull back might be over and its juggernaut climb is about to resume. While that option remains a possibility, the probability seems unlikely.

Dow Jones Industrial Average
Elliott Wave update for week ending 5/22/2015

Dow Jones Industrial Average

Click here to see wave degree labeling key (popups required) -- Click on chart for larger image.
By Sannleikur Komist

The Dow Jones Industrial Average was able to set a new all-time high this week, on Tuesday, as anticipated in last week’s update. Still,  it ended the week slightly lower. Moreover, the anticipated possibility that the final Minor degree wave 5 of Intermediate degree wave (5) would form a smaller Minor degree Ending Diagonal Triangle within the larger Intermediate degree diagonal triangle appears to be playing out.

SEC Commissioner Stein fed up with criminal waivers for TBTF banks – writes a scathing dissent

Kara M. Stein

EDITORIAL
By Sannleikur Komist

It is no secret in the financial world that the role of the Securities and Exchange Commission (SEC) is largely symbolic these days. The SEC’s mission statement says their role is to “protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.” But everyone knows their “real” job is to protect the financial elite from criminal prosecution when their companies step out of line. Everyone knows that… except perhaps Commissioner Kara M. Stein.

Investing in Europe? Or interested in knowing what’s going on over there?
See these 5 free videos on the State of the Markets in Europe

Investing in Europe

A report from Elliott Wave International
By Brian Whitmer

You know that the European Central Bank has been engaged in an unprecedented 1-trillion-euro quantitative easing effort, right? The goal has been to give European banks more capital. Free money! Well here’s a fact you won’t hear about on financial TV.

You would think the banks would be prospering. Yet, Eurozone bank stocks peaked a year ago, in April 2014 — even as the Euro Stoxx 50 and DAX, Europe’s two flagship indexes, pushed to new all-time highs.

So what’s going on?

Gold: Elliott Wave update for week ending 5/15/2015

Gold

Click here to see wave degree labeling key (popups required) -- Click on chart for larger image.
By Sannleikur Komist

Gold will make one more rally before turning back down in sympathy with other commodities. Stocks will already be down significantly and the dollar will be on the rise again when gold peaks and reverses which will confound precious metal, commodity, and equity investors alike.

IRS says it will return $107,702 illegally seized from North Carolina store owner

mclelland
Dateline: Farimont, N.C., 5/15/2015
Media Outlet: The Daily Signal
Article Headline: Federal Government to Return 107,702 Dollars Seized From North Carolina Convenience Store Owner
Map View:

If you think your money is safe because it’s in a bank you would be wrong. A North Carolina convenience store owner found that out the hard way when the IRS showed up at his bank and seized over $107,000 from his account. Store owner, Lyndon McLellan, had committed no crime, he had simply deposited his earnings into his account in a way that the IRS claimed was “suspicious”.

Dow Jones Industrial Average
Elliott Wave update for week ending 5/15/2015

Dow Jones Industrial Average

Click here to see wave degree labeling key (popups required) -- Click on chart for larger image.
By Sannleikur Komist

The Dow Jones Industrial Average is on the cusp of a major reversal of fortune. The Ending Diagonal triangle that we have been watching form for many months is all but complete. When the reversal occurs, the collapse in stock prices will be swift and relentless and will surprise almost everyone… everyone but you, of course.

Big Volatility Shakes Bond Investors — Is the debt bomb about to go off?

debt bombBy Elliott Wave International

The yields on U.S. Treasuries and European sovereign debt have risen sharply in a relatively short time. Bond prices trend inversely to yields — which means debt portfolios have suffered substantial losses.

From mid-April through May 6, yield on German 10-year bunds spiked 47 basis points. Yields on 10-year U.S. Treasuries jumped 29 basis points in just the past week. Click here for a free report which explains why.

Peter Schiff says Bernanke really believes he saved the world from financial Armageddon (audio)

Peter Schiff and Ben Bernanke

EDITORIAL
By Sannleikur Komist

There are no two people in the business of economic analysis more unlikely to be seen together, much less posing for a photo together, than Peter Schiff and Ben Bernanke. Schiff is arguably the most outspoken critic of the Federal Reserve in recent times. That Bernanke would allow himself to be pictured with Schiff is surprising. But then, hubris can make people believe their own sociopathic delusions. In his own mind, Schiff says, Bernanke truly believes he saved the world from economic collapse.