The ability of central banks to "print money at will" explains why many investors have a deeply held fear of inflation.
It's true that central bankers sometimes drop not-so-subtle hints to reinforce this perception -- such as Ben Bernanke's 2002 "fighting deflation" speech, when he said that if necessary, the Fed would get the public to spend with a "helicopter drop" of money.
Well, that symbolic "helicopter drop" has been in flight since 2007. But now the so-called "drop" is over. The printing presses have gone silent. It's time to look at what's happening right now -- and what will follow soon.
Real events point to real financial trends. In the just-published Elliott Wave Theorist, Bob Prechter has chronicled an astonishing rush of recent events which point to a "gathering storm" of deflation. Here's just a partial list:
- Did you hear about the coming $8.5 b-b-billion settlement between Bank of America and investors who purchased the bank's mortgage-backed securities? You'll never guess who is among the "investors" in the settlement...
- The "Emerging Public-Sector Frugality" -- the debt-ceiling deadlock only looks like politics-as-usual. Bob Prechter strips away the political ideology to expose the true (and far more primal) source of conflict.
- Can the Fed still be "The Fed" when its credibility is gone? The Committee to Save the World is fast becoming the committee to ruin the world. Some estimates say that QE2 "created jobs" at a cost of $800,000 per position...
- Why has every "cure" in Europe only made the debt crisis deeper? Some citizens in Europe want their government to default, others want their government to halt the support of countries near default. The Theorist considers what will follow if either side (or both) has their way.
- Five years of deflation: Some 23% of mortgages are underwater. Recent data shows home prices declined again in "three-fourths of U.S. cities." The media has fallen silent about real estate, but Bob Prechter is loud & clear about why the Fed's "easy money" has failed.
- Angry at banks? You're not alone. Congress has acted to reduce one of the banks’ most profitable sources of revenue. Is this inflationary or deflationary?
- Why are executives at inflationary credit mills "getting out of Dodge"?
- Three major insurers cover $700 billion in U.S. mortgages, and those insurers are "woefully undercapitalized" to meet "coming claim" -- is this inflationary or deflationary?
Bob Prechter has scrutinized these events, and puts them in context because he sees them for what they are. Read the Theorist for yourself. You'll know that the trend is unmistakable. Learn more below about how you can put the July Theorist on your screen in minutes.
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