Deflation To Devastate U.S. Economy – Wall Street Underground

By Nick Guarino | June 1, 2015

Deflationary Death Plunge Has Started

Inflation and GDP now totally negative…

The event we long feared is happening. A deflationary depression.

The Commerce Department revised US GDP, down to a staggering -0.7%. They originally reported GDP was UP 0.2%. More b.s. spin from the Obama administration, to keep the real news from the American people.

That’s not all. The inflation index the Fed most closely watches is the PCE (Personal Consumption Expenditures). The PCE is part of the GDP report, and it fell to a mind-blowing -2%. The deflationary spiral has been confirmed by the most recent CPI report down 0.2% and PPI report down 0.4%.

As I’ve shown you before, the Fed wants inflation to be +2%. Instead, actual inflation is the exact opposite: not only negative (i.e. deflation), but four percentage points under the Fed’s target. This is a disaster of untold proportions.

Keep in mind that trillions spent in quantum easing to stimulate the US economy have failed miserably. And they are out of bullets. They are incapable of saving the US economy from the next shock.

And it’s not just the U.S. Negative GDP and inflation rates are spreading the world over. Europe. Japan. China, where producer prices have dropped an incredible 38 months in a row.

Also the UK. Africa. Australia and South America. We have not seen such widespread economic/financial devastation since the 1930s.

The fact of the matter is central banks the world over are becoming more desperate by the day.

Yet the US stock market keeps trolling along, pretending all is hunky dory. That’s a fool’s game. It’s about to splinter apart into a thousand pieces.

Last time the public had a magic ATM machine, that spit out more and more money, seemingly for free, was the 2004-07 real estate bubble. That bubble burst, and threw the world into a recession/depression.

Now another magic money box, that supplies unlimited cash, has come up: the stock market. This bubble will soon burst. It will end up much worse than the last one did.

Why? Because the last financial bubble was mostly U.S. based. This time, due to globalization, the financial crisis will directly slam into every economy in the world.

You don’t have a lot of time to get your house in order. We’re months away from the most shocking stock market plunge in history. That will kick off a global financial panic… and a complete, total global economic meltdown.

Besides globalization, another thing will make this meltdown far worse. In a financial panic, with markets under severe stress, central banks try to stimulate economies — by dropping interest rates.

They do this dramatically and quickly. On average, since WWII, the Fed and other central banks have dropped interest rates 4 percentage points during recessions.

That’s the problem. Interest rates in most major economies are already barely above zero: they range between 0.25% and 0.75%. i.e. the central banks already have used this tool, to try and stimulate their economies.

Now they have no more room to maneuver. If they make rates negative, they won’t stimulate their economies. They will put a choke hold on them.

So central banks have nowhere to go. Their fire trucks are out of water. Their rescue helicopters are out of fuel.

I’ve prepared for you a special audio file, that goes into this key event: the deflationary death plunge. The plunge has now begun. You need to understand it.

Click here to listen to this latest special report.

Thank You,
Nick

.

.

Comments

You must be logged in to post a comment.