The Age of Deleveraging and Paradox of Inflation!

Dr. Gary Schilling as become the new Judo Master of the World of Deflation.  His new book The
Age of Deleveraging is a classic book in the field of forecasting.  The problem is that the book
outlines a strategy for a long term deflation that will last from 2010-2020.  The primary problem
with this analysis is that it rests upon the following premises: (1) the historical foundations of deflation
which started in 1982 - 2020 will last a period of 48 years; (2) The theory goes against your
typical analysis of K- Waves and American History; (3) American Historian view this period
as the baseline for a 23 year inflationary period lasting from 2004 to 2027; (4) The role of
commodity prices contradicts the idea that prices will decline 2% to 4% for period of
10 years; (5) the gold indicator has started its ascent from a low in 2005 around $280 to
high of 2010 at $1,300.00; (6) Dr. Schilling has the theory of deflation to explain the
collapse of the housing prices as a major indicator of deflation; (7) The current crisis is caused
by the derivatives crisis that was created by Investment banks, Commerical Banks and Real
Estate propaganda; (8) the concentric collapse around the real estate market and Investment
banks are a function of storing risks for maximum gain; (8) The real problem is that deflation
is a plateau phase of creative destruction and it appear that it is creating a new supercycle;
(9) The inflationary cycle is K waves based and we are in the early stages of low inflation
which benefits everyone and no one pays the price for this change; consequently it appears
harmless and even beneficial to everyone; (10) Dr. Schiller's advice may have a 5 year
life span and needs to be corrected for massive changes coming; (11) Catepelliar Corporation
has invested 8 billion in the consolidation for a inflation wave of commodity growth and
not commodity deflation; (12) Consumers will see the massive tidal wave of price changes
at the end of the commodity cycle and not the beginning of this cycle; (13) The oil industry
has 10 years left before massive inflation hits the American dependence on energy whereas
the Green revolution requires about 137 year before it impacts the American Economy; (14)
Where does this leave us?  An investment compromise 3 years of Dr. Schlling advice and
17 years of inflationary portfolio restructuring for the New UPWAVE!

THE COMING CRASH! OCTOBER JINX MONTH!

The stock market is not a reflection of the real economy.  The market is set to crash by at least 2,000 points.  The problem we running into is that the financial propaganda machine and mutual fund industry want to create the illusion of a stock market recovery.  The recession has ended in 2009 but the consumer is deleveraging for at least 7 more years.  This means there is no money to invest in the market!  There is no way you can logically make the case that 76 million boomers who are retiring will invest in the equity markets. This does not make sense because they will need most of their money considering that most 401 k have only $50,000 and this will last about one year and 50% of the Boomers are bankrupt and will depend on social security and low level work.  It will take the Y generation at least 10 years to come into a real spending power.  We are faced with a major collapse of state government economies that cannot budget their budgets and most bonds in these municipalities are worhtless.  As the Boomers retire, state retirements will be faced with higher costs and lower revenues for at least 10 years.  There is no logical way out for the equity markets.  What type of markets will we have?  We will have trader markets, bubble markets, alternative investment markets, emerging market, health markets, and other markets associated with the retiring Boomers.

RETURN OF THE TRIPLE WITCH-THE COMING COLLAPSE!

THE STRANGE TALES FROM THE STOCK MARKET: Stock options expire the third Friday of September but the biggest losses come in the week before the TRIPLE WITCHING DOW! WATCH OUT !
THE EXPIRATION WEEK 2001 DOW OFF 1369.70 POINTS=WORST WEEKLY DOW POINT LOSS EVER.  THIS REPEAT OF HISTORY IS SCHEDULE FOR SEPTEMBER 22, 2010!  THE SECOND PIECE OF ADVICE IS TO SELL ROSH HASHANAH, BUT YOM KIPPUR, SELL PASSOVER. WHAT IS WORST CASE SCENARIO: DOW DOWN -14.3 AND S& P DOWN
-11.9 AND NASDAQ DOWN- 17.0 AND RUSSELL 1 K DOWN -11.7 AND FINALLY RUSSELL
-2 K DOWN- 14.0. END OFTHIRD QUARTER BRINGS HEAVY SELLING FROM INSTUTIONAL PORTFOLIOS! ON THE COMMODITIES FRONT: SEPTEMBER THROUGH THE HOLIDAY SEASON BULLISH FOR ALL TYPES OF GOLD! GOOD RALLY FOR PETROLUEM FUTURES,
GOOD FOR SILVER RALLY, LIVE CATTLE, AND WATCH OUT FOR SEPTEMBER SLAMMER IN COCOA FUTURES!  WE ARE LOOKING AT -$134.00 TON USING DECEMBER FUTURES.

THE DEATH STAR OF AUGUST!

August will the be final verdict for the stock market.  August should lead to either a confirmation of "modern day depression" or a mild deflation for the rest of the year!  First trading day in August atrocious down 13 of last 20!  August is the worst S& P SINCE 1987 .First nine days of August are historically very weak! End of August Murderous 6 out of 10 years. Dow usually loses 5% S& P about 3% and Nasdaq about 3.1%

Plan for investment in Gold and Silver, Biotech and Utilities. (BTK, XAU, UTY). Watch for August weakness in Silver.Look for rallies in corn. Watch the movement of gold prices-if they are up a big season ahead -if they are down then deflation will destroy gold!

SECULAR DOWNWAVE IN STOCKS! 2010-2016: JULY LOOKS BAD!

This is the beginning of the end for the equity market.  We are looking for a rolling thunder of equity destruction to begin and July and hit a 2,000 pt. drop in August.  This is a conservative estimate.
You should be in 30 year zero coupon treasury bonds for the next 6 months.  This is a serious drOP AND

REALIZATION THE MARKET WILL END IN A DISASTER FOR EQUITY INVESTORS! This is the beginning of the worst 4 months for Nasdaq. BAD MONTH TO BUY SOYBEANS, FOR CORN. GOOD SEASONAL TRADES IN BIOTECH, GOLD AND SILVER, UTILITIES.

CRUSHED IN 2002 DOWN 215 POINTS! WATCH OUT FOR JUNE!

WE ARE IN A DEFLATIONARY YEAR AND JUNE SHOULD BEGIN THE LONG WAVE DOWNWARD.  THE KEY IS TO REMEMBER IF THERE IS A RALLY IT IS THE WEAKESS RALLY IN THE MARKET.  THE INTERNATIONAL CRISIS IS COMING OUT OF EUROPE CREATING A WEAK EURO AND WEAK STOCK AND BOND MARKET.  THIS IS NOT THE TIME TO INVEST IN THE EUROPEAN MARKETS.  THE DEFLATION IS VERY STRONG AND CREATES THE ILLUSION OF A LONG TERM DEFLATION  WE ARE BEGINNING A NEW 30 YEAR INFLATIONARY CYCLE IN 2011-2041.  GOOD MOVE FOR TREASURIES FROM JUNE 2 TO JUNE 16TH.

HIGHWAY TO THE DANGER ZONE!!

THE STOCK MARKET IS ENTERING THE MAY AND JUNE DISASTER AREA!  THIS MEANS THAT THE ODDS THAT THE MARKET WILL BE A MINE FIELDS IS HIGHLY PREDICTABLE WITH  ODDS OF 15 OUT OF 20 DOWNS FROM 1965 TO 1984. THIS SHOULD BE THE WORST SIX MONTHS FROM MAY TO OCTOBER RESULTS IN RECORD LOSSES.  THIS IS THE BEST TIME TO SWITCH INTO A STRONG DEFENSIVE POSTURE. PETROLEUM FUTURES U PS, COFFFE FUTURES DOWN, SUGAR FUTURES SHOULD BE UP.