The Great Deflationary Collapse Continues

Larry Edelson

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.

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

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,


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.

Larry Edelson, one of the world’s foremost experts on gold and precious metals, is the editor of Real Wealth Report and Supercycle Trader. Larry has called the ups and downs in the gold market time and again. As a result, he is often called upon by the media for his investing views. Larry has been featured on Bloomberg, Reuters and CNBC as well as The New York Times and New York Sun.

Comments 35

René December 16, 2015

Hi Larry, Gold was supposed to bottom end of November.... since it did not, is it going lower again? regards

Pat December 16, 2015

Yes, Larry, am still waiting for your buy signal on gold and commodities. Enough of Phyatt and his daily scared silly stuff. Please, just give the truth and facts. Thank you.

sharon December 16, 2015

someone is making money following larry, not me

George December 16, 2015

Well, I wish I'd listened 4 years ago. I'd be a lot better off than I am now.

Raul Guzman December 16, 2015

Larry claims he has made accurate calls on gold and silver. He has called the bottom for gold and silver twice in the last 2/3 years. He has also said the miners had bottomed. I have lost thousands of $$ with his calls.

Puter December 16, 2015

Larry knows fully well that Gold is manipulated to protect the dollar. He has never come out openly to state that fact and hence his calls of bottoms in Gold are plain BS. One day, in the not too distant future (maybe in 2-3 years), when the fiat game is over and the whole world knows it, Gold will rally. At that point Larry will promptly come out to tell you now is the time to be in Gold quoting his "cycle" theory. Do your own research, be prudent in Investment and follow your gut rather than Larry (or Moe or Curly)

Don December 16, 2015

Bingo. Been saying / following Gold Manipulation for years. This is why it can never be "predicted" is because it is controlled by the cartel / fed / gov thru massive ongoing shorts on the comex. Magical mystery seller / buyer always when gold apprec. a bit, selling when liquidity is low (huh) results in many many 20 - 30 dollar overnite smackdowns. Larry knows all this but refuses to ack. Play the shorts on the comex

Jimbojiv December 16, 2015

Whatever happened to October 7, 2015?

Fred 151 December 16, 2015

and yesterday

Denis December 16, 2015

Hi Larry, Good article. I agree with you on the European situation, i.e. it is an ill conceived mess that should never have been formed in its current state. Like you say, a barely held-together mixture of different cultures, languages, work ethics, where some states see tax-avoidance as a national sport, and other states where corruption is the natural process. How can this be combined with efficient, productive, conscientious, law-abiding states, it simply can't. The question I have is this, we have been saying and expecting a European Collapse (inc the Euro) for perhaps 8 years now, but it stills stumbles along. With each passing year Brussels introduces new measures to support the union. The latest being a Bank Support Fund to assist failing European banks, and remove the need for Tax-Payers to fund these Bank bailouts. There have been numerous previous support measures. Then take Greece, with bailout after bailout, and still not conforming to the bailout terms. In my opinion the longer it stays as monetary union the worse things will get, but when will the inevitable occur. Will it occur at all, or will it just stumble along until the complete union becomes an economic catastrophe.

ken December 16, 2015

Larry we have had massive inflation in housing in Vancouver primarily related to the influx of buyers from China. How can this flow of investment from China continue? Thanks Ken

LSM December 16, 2015

I wish I had a dollar for every time Larry has said a member of the EU or Europe is going down the tubes.

bill December 16, 2015

they are going down the tubes, it takes time.

Deanna Rogers December 16, 2015

I have a lot of my money with a financial planner in mutual funds and every month It goes down about a $1000.00 but i would pay a lot of taxes if I take it out I think. One is in my IRA and another is in my trust. I am playing with 15,000 with you trying to recoup what is being lost in the other 2. Plus I am a new to trading. thank you for any advise. Deanna Rogers

Fred 151 December 16, 2015

this is not a time to "play". put it in a 1.5% CD

Howard December 16, 2015

Deanna You should be able to move your accounts to another institution without having to pay taxes. I have moved mine. Find the advisor that you trust and they will explain the process to you and handle the transfer for you.

Charles Bower December 16, 2015

So far, all I've seen as of late is goalpost moving, followed by attempts to take credit for calling moves correctly. I will say that in 2011, you called the high in gold, but since that time, your track record is not that good. Hate to deflate your ego.

sonny saul December 16, 2015

there is a law of society and culture that is almost like a physical law. When a person is characterized by what one might call "self adulation", that persons' level of being taken seriously is proportionately diminished. Maybe , no, likely you have noticed, and it has nothing to do with money, power, or success.

Mark December 16, 2015

You lost some more credibility with me when you missed the "Terrible Tuesday" economic collapse.

$1,000 gold December 16, 2015

i doubt we see crude go below $30/bbl. why? look at the supply/demand charts. demand is increasing because of the cheap oil and supplies are leveling off.

$1,000 gold December 16, 2015

deflation should turn the corner in 2016.

$1000 gold December 16, 2015

then again maybe not

$1,000 gold December 16, 2015

you're entitled to you opinion, $1000 gold. but cheap oil has everyone buying new cars and driving again, a surefire recipe to put a bottom in the commodities route.

Ultimate Warrior December 16, 2015

What about the Gold and Silver trader? LOL 9/10 trades were all wrong The only one that would be right would eventually turn out wrong too if you hold as long as Larry tells you.

Ultimate Warrior December 16, 2015

Larry the EUR is recovering as Draghi is using QE the way Bernanke did - we live in the electronic age and things can be changed with a click of the mouse. Once Armstrong changes his forecast I guess you will too?

Herb. Voigt December 16, 2015

Interesting concept. You talk about the European Union and its problem. You are right but you forgot one important item: The new Europa is just a pipe dream. I have said that back in 1996 when they got more serious about this. How can a group of countries , who fought one war after the other as far as history goes back and with a hand shake make every thing disappear. Further more, Germany is not a country as such, there has never been a peace agreement signed to end the last war with the " Allied countries". Germany is the paymaster for all and this will never work, if all other counties ride on this concept. They all have to learn to stand on their own two feet. Swim or sink and drown. Herb Voigt

$1,000 gold December 16, 2015

gold responded favorably to loosening by the fed. once that stopped, gold began its slide. until we see more easing by the fed, gold should continue its slide.

$1,000 gold December 16, 2015

we're unlikely to see more easing by the fed for some time to come.

$1000 gold December 16, 2015

its more likely to see me for some time to come

$1,000 gold December 16, 2015

i'll show you a good time, troll. let the games begin.

Al December 16, 2015

Larry can predict gold, silver, oil, deflation,the Euro collapse, China's gamemanship, but most of all he can take your money while his suggestions also take your money. Thank heavens for common sense alternatives like indexes that beat even the best analysts on a regular basis. The jury is out on robot investing, however, I am rather certain even a robot has more going for it than a scam artist. Unfortunately, scam artists who play armchair quarterback and rely on sensationalism like Larry continue to make money on unsuspecting and yes perhaps financially uneducated investors in search of "a pot of gold".

Jim December 16, 2015

Maybe it is time for those who are unhappy with the poor performance and change of structure to go on the attack. Put your comments on Facebook, Linkedin and other social networks. Remember, all these guys are going to only show what prediction they made that turned out to be accurate. It is easy to make a prediction that gold will rise one day and then say it will fall another. Now you have covered both sides of the situation. When in the future it drops a lot, you pull out your newsletter that predicted the fall. I could be real good at this as well. The last time Larry said gold had bottomed, jump in and buy I did just that. The result as you can guess was a significant loss. A while later he came back and said gold will fall further don't buy gold. You will never see him refer to his newsletter that said gold had bottomed and that he made a big error. jim

$1,000 gold December 16, 2015

larry should listen to me. in the fall of 2011, i said the gold bubble just popped. since i began posting on this website, i've been a gold bear - hence the moniker $1,000 gold. i'm still a gold bear. i don't see any upside in gold until the fed eases again. maybe you should have listened to me too, jim.

Alan December 16, 2015

Jim that statement you made isn't true. He tenuously put a foot in the water on the one time he thought it might be bottoming. He changed course realizing it wasn't a bottom yet and has admitted that in following reports. He has been telling us not to buy gold for 4 or 5 years. I admit his timing is often early on calls. I don't invest anymore on his short term trades. But his overall long-term trends are amazingly accurate.

Dip December 16, 2015

I stayed up all night for Tue Dec 15th hell to break lose. Lucky didn't hold my breath.