Roughly Every 80 Years, the Piper Always Gets Paid …

Larry Edelson

By this time next week, we’ll all know who the next president of the United States will be.

But it won’t matter one iota. The reason: We’re in the early stages of a sovereign debt crisis, a massive storm that hits the global economy roughly every 80 years and where the piper always gets paid.

Proof positive it’s starting: While central bankers have done virtually everything they could think of to prop up bond prices and depress interest rates to spark global economic growth …

A Great Bond Bust Is Starting to Unfold

Even negative interest rates in Europe haven’t done the trick of stoking its economy.

And now, just as I forecast last year, the bond bubble is starting to burst. Worldwide, bonds lost 2.9 percent from Oct. 1 to Oct. 27, a devastating blow in only 26 days.

The last time the bond market was dealt such a blow was May 2013, when then-Federal Reserve Chairman Ben S. Bernanke signaled the central bank might slow its unprecedented bond buying.

The last time the bond market was dealt such a blow was May 2013, when Fed Chairman Ben Bernanke signaled the central bank might slow its unprecedented bond buying.

Naturally, Europe led the losses as investors start doubting the viability that the ECB can continue to purchase debt, without boxing itself into a corner that will lead to bankruptcy, just like it will eventually for our own Federal Reserve.

The central banks (and governments) of Europe, Japan and the U.S. are all toast — it’s merely a matter of time before everyone realizes it.

There is simply no way …

— Europe, Japan and the U.S. will ever make good on the social promises and safety nets that they promised their people. And …

— No way each country’s central bank will survive. All three are between a rock and a hard place, with a total $12.7 trillion in debt among them that they will never be able to get rid of without crushing the global economy and sending interest rates to the moon.

Even if sold over a decade, they’d be selling more than $1.2 trillion worth of bonds each and every year. The market can’t handle it.

Welcome to the World’s Worst-Ever Sovereign Debt Crisis

Sounds trite. And I know what you’re thinking: “But Larry, we’ve been here before and nothing has ever happened. Governments can just kick the can down the road.”

My response: That’s true. In normal times, they can kick the can down the road.

But these are far from normal times. And it’s not even the level of debt that matters right now. It’s the revolution that’s in the air. You see, roughly every 80 years or so — the piper has to be paid.

It happened in the Great Depression (which led to WWII) … it happened roughly 80 years before that in the late 1860s … before that in the 1780’s … and pretty consistently every 80 years throughout Europe’s history.

There is no free lunch. Even for governments and central banks. The piper always gets paid.

So, What Does It Mean Directly for You and Your Investments?

First, you should steer clear of ALL government bonds and anything less than a AAA corporate or municipal bond.

Second, you should not mistakenly assume the U.S. stock market is going to crash along with bond markets. It’s not. All that frightened bond-market capital is going to seek shelter in the U.S. equity markets more than any in any other country.

Chief reasons:

A. As weak as our economy may get, and as lousy as our next leader may be, the rest of the world views our equity markets as the safest place to park big money. Period.

B. We have the biggest, deepest and most-liquid equity markets on the planet, and the only markets that can handle the trillions of dollars of money seeking shelter.

C. Dozens of U.S. companies are in better financial shape than most countries.

D. The U.S. equity markets are the last bastion of capitalism. Unlike Europe and Japan — not to mention many other parts of the world — Washington would never nationalize U.S. equity markets, or even a minor portion of them.

And lastly …

E. U.S. equities are becoming an alternative to bank deposits, where you earn nothing and you’re at risk of European-style “bail-ins” should your bank fail.

Given the above five reasons, I think it’s a no-brainer that my A.I. models and supercycles show the Dow Jones Industrials vaulting to over 31,000 over the next couple years.

Third, be ready to take advantage of huge new bull markets in key commodities and commodity companies in the natural-resource markets, especially in gold, silver and energy.

Lastly, if you think we haven’t been here before, go back just over 80 years to the middle of the Great Depression. Back then between 1932 and 1937 …

All of Europe went bust, Japan went bust, China was in trouble, and guess what happened?

Gold soared on the black market, along with the dollar — so much so that President Roosevelt had to devalue the dollar and then confiscate gold …

While foreign capital inflows into the U.S. equity markets also drove the Dow Industrials up 382% … even while the U.S. economy remained mired down in 25% unemployment and a depression.

History, as the saying goes, repeats itself. And that’s why the piper always gets paid.

Stay safe and best wishes,

Larry

P.S. Economic tidal waves act just like tsunamis! According to the National Geographic, the enormous energy of a tsunami can lift giant boulders, flip vehicles and demolish houses. But from a financial standpoint, the K Wave will be even worse: Millions could lose their homes. Millions more could see their lifesavings wiped out in an instant. Businesses, large and small, could close their doors. Even the bare necessities of life — food, water, clothing — might become scarce. That’s why it’s so important that you get your free copy of my new report “STOCK MARKET TSUNAMI” right away, click here to download now!

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 44

Mike Clancy November 2, 2016

Larry, Just for chuckles, you might consider rewording the first sentence to "should know". After all, this election cycle is clearly bouncing from wall to wall, and we could easily be suffering an unknown malaise of uncertain outcome this time next week.

Tactical111 November 14, 2016

Wrong. We do know.

james stephenson November 2, 2016

Great

ian November 2, 2016

Well Larry,It looks like the pigs,pidgeons,chickens,turkeys all coming home to roost at the same time.Trump/clinton love affair is a comedy,is anyone talking about the economy,maybe thats not important.The legacy BO has left trully stinks,I hope Trump loses(hold on) and runs next time cos if Clinton wins she will be known as the worst in history cos of BO.Its really a sad situation the whole world is in.Be like china,do a lousy job,taken round the back and shot.

Liam November 2, 2016

You're right Ian, glad I'm not the only person who thought of that. Whoever wins the election will be the one who will ultimately take the blame for the impending disaster. Way to see the silver (gold?) lining.

Jersey_Prophet (@stringed) November 5, 2016

Will we ever learn? 8 years of disaster and you want four more to teach us a lesson? It won't happen in four if it hadn't happened in eight. Instead, what WILL happen is, should the witch win, it will be the LAST election in this country. Be careful what you wish for!

David November 5, 2016

Yeah but she will be able to appoint judges that we will have to live with for next 50 years.

Morris Jesion November 2, 2016

Larry, Is it time to go all in gold? Morris

James C November 2, 2016

Is Hedging gonna come back in the avoidance of a foreign exchange risk or the covering of an opening position. The Marshall Lerner condition indicates that the foreign exchange market is stable in relation to the dollar. Could Foreign Sales Corporations the overseas subsidaries set up by US Corporations take advantage of partial exemption from US tax laws? Could this eventually lead to the return of the gold standard the international monetary system operating from about 1880 to 1914 under which gold was the only international reserve, exchange rates fluctuated only within the gold points, and balance of payments adjustment was described by the price specie flow mechanism.Could this lead to a gold tranche, the 25 percent of a nations quota in the IMF that the nation was originally required to pay in gold and could then borrow from the Fund almost automatically. Could we see special drawing rights back in action by the IMF to supplement other international reserves and distributed to member nations according to their quota funds? What the subprime mortgage crisis in the USA caused by what happened to Fannie Mae and Freddie Mac? Will this see the return of collateralized debt obligations?

bill conti November 2, 2016

Had a question @ whether Series EE savings bonds purchased @ 1992 should be sold per Larry's recommendation to sell all government bonds?

Neal Garrard November 2, 2016

As a member of your Real Wealth service, I have followed your advice to remain primarily in cash, knowing that a gold close above $1275 was a sign that things were finally underway. You indeed called it perfectly, as gold and silver have both promptly moved north. My beef is that to this moment, there have been NO new recommendations on how to respond to this movement. If I had waited to hear from you for the advice I am counting on, I would still be sitting on the sidelines. Does one need to upgrade to your Elite Member Service in order to get actionable information?

Sandor November 2, 2016

Call me the piper,then.

craig November 2, 2016

You are very good at what you do and I appreciate your research but here's where I think you're incorrect.... If you look at the 100 year history of the Dow, you're right that between 1932 and 1937 the markets went up, however, that is only after the great depression where the markets went down 80% already over 3 years! We haven't even hit our recession which is where stocks should drop dramatically before they go up! I think that people will go to cash versus catching stocks that are dropping like rocks. They are still stung from 2009 and most don't want to go through that again.

Richard November 2, 2016

Eventually you may be right. You and all of the Weiss guys have been predicting the imminent collapse of treasuries for close to 10 years.

seymour sheroff November 2, 2016

Larry, I just spent over a $1000 on your service. Please tell me what to buy. I do not mean gold or silver or other commodities. I mean name of companies at good prices. Thank you Larry. Seymour

John Kemp November 2, 2016

Larry: I really would welcome your response to the issue raised in this e-mail to you. In a company liquidation or some form of reconstruction, creditors have a right of set-off, which allows them to deduct amounts owed by them to the company, against amounts they owe the company. The resulting net amount (either way) is the amount admitted into the liquidation. There is so much talk these days about global debt - is there any information available of that global debt by individual country? It seems to me that there has to be the establishment of a creditors committee, where the details of the global debt between the parties is made available. Those details would, in the first instance, facilitate the set-off procedure. Discussion can then ensue on the revised net positions.

Greg Lissner November 2, 2016

I am RWR subscriber. Metals up in your predicted up trend. WHY no new buys on the metal stocks. Are you expecting a pullback or are you too involved in your costly new service to advise us?

Dave S. November 2, 2016

My guess is that he is agonizing over whether to issue a 'buy' for metals at this point, caught between the usual rock and hard place in which most retail investors get caught: don't buy at what might be the low because the low might go lower; and then, when the low has plainly been missed, don't chase! So here we are --- chasing again. This missed low isn't as tragic as the huge miss 10 months ago, but it's still galling. Larry is exceptionally good with his predictions of market directions, but don't expect him to buy when "blood is in the streets".

Logan November 2, 2016

Hi Larry, I am glad to subscribe to your emails. I am from India and i have just started to invest in precious metals like gold and silver. I have been watching and monitoring your predictions for past one year and i am able to see your predictions are closely to accurate. like you mentioned silver price will go down in October month and it happened exactly. (It went down to Rs 41000 from Rs 50000. Now you have mentioned that silver will hit low and than raise again. I am yet to invest my first investment in silver and waiting for it. can u suggest me when it will go down and how much. i know its silly to ask jus curious to invest my hard earned money and get better returns. Really expecting your reply. Thanks.

John S. November 2, 2016

You go Larry

Ed November 2, 2016

Larry, I am in the camp that believes equities will be bought for income and growth in place of bonds. You have mentioned that the DJIA will rise to 31,000 over the next two years but in your last post, you said that you are not bullish short or intermediate term on US equities. I would consider buying your research if you were consistent in your statements. Please define what short and intermediate term would represent in your view. As bullish as you are on US equities, you've offered a report called Stock Market Tsunami. The issue is that you are forecasting massive systemic risk that is very possible. My point is that in this scenario which would result in catastrophic economic, political and financial market disruptions, the correlation to the downside would include all markets including the US.

drago androjna November 2, 2016

well, one could only say wee will see!!!!!

Jacobus November 2, 2016

Larry, could you give us you A.1 model on Platinum? It moved from 930 to 1000 in a few days. Please give us your opinion.

D GRAY November 2, 2016

WHO, IN THE PRESENT CASE IS THE PIPER?

John T November 2, 2016

YOU. John Q. Public

Greg November 4, 2016

John, Have you ever seen John Q. GET paid?

Beth November 2, 2016

How could the US Government get away with confiscating gold from its citizens while the Chinese, Russian and Indian citizens etc. are allowed to own gold?

john November 2, 2016

Larry Give us your perfect portfolio for today?? No short/Medium/long term/Just today ?? John

bruce November 2, 2016

Larry: I'm down 40% in the GM 2018 puts you recommended. Please advise. Thanks, Bruce

Ian November 5, 2016

Keep Calm & Carry On

Rosemarie November 2, 2016

It's time to realize while the economy is important to all, we first of all need a trustworthy Goverment . We are behaving like a third world country. The American people are tired of being played. Hopefully as you predict 2020 will have proven that we all need to be responsible and that progress has been made in the right direction. Thank you for your insight and help.

Bart Snow November 2, 2016

Come on Larry, give us some meat. Is the stock market going to crash before it climbs to 30k. And if so, what is the timing. I am thoroughly confused. Also with gold ... should we be backing up the truck now or should we be looking for another decline? Reading the comments on this site confirms that I am not the only confused soul. HELP!

D GRAY November 3, 2016

Re my earlier question: "Who,in the present case is the piper?" the answer is not, I submit, "John Q Public". I should still like an answer. Additional question: Who, in the present case is the payer?

Gianfranco November 3, 2016

Larry,if everithing Will go Kaputt, how can you imagine thai my Big profit s on optional, etf, etn, etc Will ne rewarrded? We Will face a global bankrupt and my etfs Will not match even poor arms like stones and lknives.

don ho November 3, 2016

One thing he got right is that the US has the most profitable and well positioned companies in the world our capital markets can weather any storm albeit taking a hit but ultimately comes back stronger. There is so much wealth in this country.

Michael November 3, 2016

What about the collapse of the dollar and how will it effect everything? The GLOBAL ELITES want a One World Government and a One World monetary system. To do this they are destroying the dollar and America along with it so we will fall in line with their plan. They are in control and will succeed and there is nothing we can do about it.

Michael November 5, 2016

Finally, someone that is brave enough to bring out the truth. Trump knows this and is acutely aware, he sees the freightliner coming and has spoken of everything if this. Without people thinking he's out of his mind, he is bold enough to actually do something. This has been in the works long enough. Think about it. Our government not being held accountable for our leaders crimes, the start of unnecessary wars, bringing panic to the general public about terrorism, one on it goes. Does anyone really think 911 was a real terrorist attack, yes, by our own leadership. Remember, it's easier to deceive the mass than it is to convince them that they have been deceived. In the meantime, they keep our kids busy playing games, the majority of the income earners working like dogs, and the rest of society sidetracked by social media, etc. You see where this is going. Should we be surprised if it really happens. I S ess was really engineered to help thus along, it's already begun, look at all the "refugees" over the last decade, look at the huge benefit I has been for Europe. Yea, really. Europe is doing so well, it's a global genocidal engineered plan. Also, if the Clintons are really looking out for our best interests, just ask Haiti, they they can tell the story better than anyone. You see, if we progress to an "all world plan" it will give no one any rights except those who make the laws, we will be done if it continues.

Tactical111 November 14, 2016

So true. How anyone after about an hour of looking at actual FACTS can still believe the official 9/11 "conspiracy theory" ( which is what it is) is beyond me. The only other explanation is that people just cannot come to grips with the utter horror that the truth represents; an EVIL Global Cabal intent on our destruction through false flags and endless "wars" and outrageous lies .

Steven November 4, 2016

Im not really a bond person but would an ETF like TBT or TMV be a good way to play this theme? Have been doing very nicely with UVXY of late and am starting open my eyes to leveraged etfs

Answers please!! November 5, 2016

How about a few answers to legitimate questions on this list????? !!!!

Paul T November 5, 2016

What about the UK Larry, I notice you seldom mention the UK. As a safe haven it has a fair sized stock market which is dirt cheap and a dirt cheap currency, and yet the economy is doing rather well. It is closer to Europe than the US but has a similar anglo saxon system and is free from the euro controls and soon maybe the whole EU . Do you think some of the cash flow from Europe might find its way there?

MICHAEL November 6, 2016

Just saw Trump on tv with the security incident. He makes a lot of big promises like increasing the military and making everyone rich. This seems contradictory. I thought military was a liability not an income producing asset. In Australia we have universal health care, subsidized medication to people over 65, few guns and shootings and life-long welfare rather than warfare. Hope USA can catch up one day.

Tactical111 November 14, 2016

As long as the companies building and supplying the Military are U.S. companies I would say a lot of wealth would be created for some plus we'd have an unequaled Military once again.

John November 21, 2016

S&P 500 trading at over 27 price to earnings multiple people should be thinking about shorting these banks that let us up to this Faz would be the etf. These banks are holding 552 trillion + derivative Let The Dominoes fall