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As early as 2011, our analysis warned that Europe's deflation was coming -- here's why
By Elliott Wave International
For the economies of Europe, the past few months have felt like one long ice-bucket challenge that never ends: A perpetual state of shock induced by the bone-chilling fact that deflation
"...has become a reality in many European countries." (Oct. 24, New York Times)
At last count, eight European nations are now in outright deflation, including:
Italy's -0.1% annual inflation, the country's first descent into deflation since 1959
Spain's -0.3% annual inflation, the most serious deflation of any larger eurozone economy
France's near 0.0% core inflation, the lowest in modern history
And no, in case you were wondering, it's not the warm and fuzzy kind of "good deflation" being touted here in the United States, where the only consequence is lower prices. In Europe, it's the
"...pretty awful kind." "Titanic Europe headed for shipwreck" KIND OF awful (Nov.14, The Telegraph)
So, we ask you: What could possibly be scarier than deflation? How about -- not even being able to foresee it?
Yes, deflation was a surprise to the financial authorities. Says one Oct. 12 financial blog post:
"It seems the entire world is cooling off in ways most political leaders and central bankers never saw coming. Global finance ministers are now up against a beast none have known in their professional lives."
That's what should keep adults like you and me up all night -- the "never-saw-it-coming" part. Just how safe is our future if the people whose job it is to keep the world's economies stable lack the tools to predict one of the most dangerous economic conditions?
This recent lack of foresight jives with what former Federal Reserve chairman Alan "The Maestro" Greenspan said in 2008:
"We can tell a bubble only after it burst."
It also jives with what some big wig at the Organization for Economic Co-operation & Development said in 2012:
"The responsibility of the 'latest' financial crisis, which no one saw coming, should be borne by all of us."
But the fact is -- there was -- and is -- a way to see these deflationary economic sea changes coming.
This chart of the UK Consumer Price Index is a reliable bellwether for inflation in Europe. You can see that price expansion peaked in September 2011 at 5.2%:
At the time, the "D" word was completely off the mainstream radar. Soaring oil, grain, and commodity prices, alongside a stimulus-happy European Central Bank fueled widespread fears of runaway inflation.
One month before the top, Elliott Wave International's August 2011European Financial Forecast laid the opposing groundwork:
"We maintain our stance, however, that the looming threat is not inflation but deflation. Far from a sense of relief, the Banks' paramount feelings should soon develop into an unrelenting dread."
Here's what made us take a contrarian stance (among many other reasons):
[In the August 2011 issue,] for instance, we showed a chart of eurozone manufacturing production and British GDP growth. Both were falling, not rising, indicating Europe's likely return to economic contraction.
[This] chart is another key piece of deflationary evidence... It shows the relentless downward trajectory of Swiss, German and British 10-year bond yields, which is one of the thorniest problems for those who take the inflationist worldview.
Bond yields aren't just falling: 10-year Swiss, German and British yields collectively dropped to record lows last month. The unrelenting demand for Europe's safest debt is a smoking howitzer that is blowing the inflationists' case to pieces.
-- The European Financial Forecast, Sept. 2011
However, the widespread call for inflation only continued to intensify in the mainstream finance. In fact, in February 2012, when the U.K. producer price inflation came in higher than expected, it prompted this word of advice from economists:
"PPI: Another wake-up call for apoplithorismosphobes, the clinical term for those who fear deflation. We recommend that sufferers 'seek therapy.'" (March 12, Wall Street Journal)
Yet, our July 2012 European Financial Forecast remained committed to its counter claim:
"Our models say that inflation rates will keep failing until they're again measuring the rate of deflation as they last did briefly in 2009."
So, it's now 2014 and deflation in Europe is no longer a specter or a figment of an unbalanced imagination. Here's a comment from the September2014 European Financial Forecast:
"The central bank's latest deflation-fighting contrivance is a €400 billion package of targeted LTRO loans, which are designed to compel banks to lend to ordinary business owners... The ECB has slashed its main refinancing rate to 0.15% and now charges for banks' overnight deposits. The result? Shown below, Europe's largest economy, Germany, just contracted 0.2%; French economic output has ground to a halt; and Italy just entered its third recession since 2008."
Now that deflation in Europe is a reality, the question is -- will it get better? Is this just a temporary economic condition that will be soon replaced with another one -- the condition that economists are much more familiar with, inflation?
We don't think deflation will surrender quite so easily. Want to learn more about deflation before it could potentially affect your investments?
Today, we invite you to read a free report from Elliott Wave International titled, What You Need to Know About Protecting Yourself from Deflation. This 10-page report will help you understand how you can better prepare yourself for its devastating effects.
This article was syndicated by Elliott Wave International and was originally published under the headline What's Scarier Than DE-flation?. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.
Researchers have found people who remarry after a spouse’s death report less depression and a greater sense of well-being and life satisfaction than those who don’t remarry, says Camille Wortman, professor of psychology at Stony Brook University, in New York, whose research focuses on grief.
“Men lose more when a spouse dies,” says Dr. Wortman. Wives often watch over their husbands’ health and tend to take care of more of the housework. Because men often have fewer friends than women, wives are typically their husbands’ main social and emotional outlet.
There is no set timeline for moving on. Some people need a lot of time to grieve. Others are ready to date pretty soon. Only you will know what is right for you.
Ask yourself: Am I ready to trust somebody again? And am I ready to care about another partner?
Your children may not be thrilled that you want to meet someone. But if you’re happy and balanced, you’ll be a better role model and a happier person overall. Talk to your children, no matter their age. Tell them why you are dating. Explain no one will ever replace their other parent. Reassure them that you will be safe and cautious.
You don’t have to let go of your positive feelings about your spouse and marriage. You aren’t looking to replace that person. Your spouse was unique. If you take that as a given, you can move forward.
Cope with the loss itself: Talk with others. Join a support group. Join a special activity group to meet others and do things that matter to you.
Stay hopeful and optimistic. Remember, you can and will find love again. You are never too old. Don’t let yourself feel pressured to make decisions you aren’t comfortable with.
We change our values and needs as time goes on, and especially after the loss of a spouse. Identify your needs and desires, and what values are important to you. Identify what you want in a new mate.
Think about what you liked and disliked in your first partner to help define what you want. If you know what you are looking for, you’ll be more likely to find that person.
Senior RV Travel America Dream Come True Comes with Mosquitos and Mechanics
Like many a retired couple, Jo Ann Bender and her husband Skipper thought it would be a grand adventure and a dream come true. So they upgraded the interior of a $7,000, 1973 Ford motor home and spent $3,000 in repairs hoping that would be sufficient to fix the engine and they hit the road.
In her new book Snowbirds, Jo An Bender shares what happened to them on their 2,000 mile trip from Spokane to Texas.
Instead of enjoying the wonders of nature and the exploring the scenery in the parks, it turned into a nightmare of breakdowns by the side of the road, and hours searching for, finding, and then getting help from mechanics everywhere along the route.
They learn new skills as navigators and mechanics as they plow joyfully ahead with their cantankerous little motorhome looking for free parking. The challenges are aplenty as they head to hot springs, Indian ruins, Western Forts, the Marfa Lights, and a Mariachi Mass at a San Antonio Mission.
And along the way, Jo Ann records her experiences and the many discoveries she and Skipper make during the course of their journey. Here’s a sample:
“As we drove down the lonely highway, a tape played, and I heard the words, “Fill your dreams with sweet tomorrows,” and I started to glow all over. I wondered what time it had gotten to be and notice that I was not wearing my watch.
Discovery No. 1: I didn’t care. Deadlines were part of another world. What were the parameters of that “other world”? Minute-to-minute timing to match time with goals. Pressure to meet deadlines. Always planning more activities than could genuinely be experienced.
Discovery No. 2: I felt a sense of rightness of journeying on a predestinated path. Th e inner spirit seemed to be shining, a feeling that the soul was being bathed in the waters it sought. Tears glistened.”
The couple’s two month semi-business trip required $2,000 a month for fuel, food, camping and $1,500 for repairs. This was less than they would have had to pay at home during the two highest months of utility bills. Insurance of the car left at home was lessened by being “on vacation.”
Snowbirdsis a delightful guide to anyone who dreams of taking on such an adventure, although maybe not in a vintage motorhome. It’s packed full of insights and how to do things that need to be done safely on and off the road, what provisions to take and how to pack so everything has a definite spot and can be found again.
One of major problems with life in an RV. Things have a way of disappearing that become a waste of energy, frustration and loss of good feelings.
Discovery No. 7: When you’re on the road, it’s difficult to do more than get from one destination to another, especially when weather conditions make driving hazardous. Road Gods must be similar to River Gods: they like to claim something for themselves. In Portland, it was a turtleneck left in a dryer.
A RV brings out the best and the worst in personal relationships. Small spaces are ideal for some couples. For others, even with outdoor living possible under awnings, there is nowhere to get away from each other. As Skipper points out at one point in frustration, “There’s no place to have a good fight in such a small space.”
Discovery No. 8: Indispensable Items for a Snowbird trip
1. The trip log with tickler notes
2. Frozen, easy-to-cook meals, prepared at home and packaged in freezer bags, laid flat
3. A map for each state
5. New wiper blades
6. Bathrobes and slippers
7. Gifts representing our state (potatoes, apples, handmade items, the cookbook we wrote)
8. Easy-going companion with a sense of humor
9. Tool kit with wrenches, sockets
10. Rolls of quarters for laundry, tolls, phone calls, gambling (minimum of sixty dollars in cash for each day we’ll be on the road for groceries, attractions, and cash-only service stations)
11. Flashlight for each occupant, plus one spare for the person who can’t find theirs
12. Flood lamp
The Best Part of the Trip. The RV world is vast. It is as beautiful and challenging as this wonderful world we call home – the U.S. of A. We went off to explore parts of it and returned feeling the responsibility and privileges of being a citizen.
Discovery No. 16: Buy a motor home but buy one you can afford so you can love—not resent—it.
When we viewed and drove miles of golden lands, we thanked our country for the good roads which allowed us the opportunity at little cost to explore so we could meet diverse people and savor foods and other lifestyles.
Discovery No. 17: Repeat Discovery No. 16. Buy what you can afford without hurting your quality of life, and it will be the best decision you ever made.
Today the Supreme Court denied review of five cases seeking the freedom to marry, leaving standing marriage victories in several federal circuits and opening the door to the freedom to marry in many more states, while deferring for another day the national resolution that Freedom to Marry, businesses, elected officials, and families across the country had urged now. The Court’s decision not to review the rulings means that soon as many as 60% of the American people will be living in freedom to marry states, with a majority of the states (30) having the freedom to marry for all.
Evan Wolfson, president of Freedom to Marry, released the following statement:
“Today’s decision by the Supreme Court leaves in force five favorable marriage rulings reached in three federal appellate courts, ensuring the freedom to marry for millions more Americans around the country. The Court’s letting stand these victories means that gay couples will soon share in the freedom to marry in 30 states, representing 60% of the American people. But we are one country, with one Constitution, and the Court’s delay in affirming the freedom to marry nationwide prolongs the patchwork of state-to-state discrimination and the harms and indignity that the denial of marriage still inflicts on too many couples in too many places. As waves of freedom to marry litigation continue to surge, we will continue to press the urgency and make the case that America – all of America -- is ready for the freedom to marry, and the Supreme Court should finish the job.”
With the Supreme Court’s decision not to review the cases, favorable marriage rulings in the 10th Circuit, the 7th Circuit, and the 4th Circuit will soon go into effect. Marriage bans in every state within those circuits will be invalidated, adding Colorado, Kansas, Oklahoma, Utah, Wyoming, North Carolina, South Carolina, Virginia, West Virginia, Indiana, and Wisconsin to the list of freedom to marry states. As a result of the Court’s decision, an additional 51 million Americans will live in a freedom to marry state.
In total, 41 federal and state courts in the past year have ruled in favor of the freedom to marry for same-sex couples with only one federal and one state ruling going the other way. Five of these marriage wins were before the Supreme Court for possible review.
### Freedom to Marry is the campaign to win marriage nationwide. We are pursuing our Roadmap to Victory by working to win the freedom to marry in more states, grow the national majority for marriage, and end federal marriage discrimination. We partner with individuals and organizations across the country to end the exclusion of same-sex couples from marriage and the protections, responsibilities, and commitment that marriage brings.
Most who fall into the Millennial/Gen Y demographic grew up hearing their helicopter parents tell them over and over that they are special, that they could be anything they wanted to be. And they tried to help them by praising everything they did whether the Millennial deserved it or not.
When it comes to thinking about a satisfying career, there are three critical factors, where you need all three to have a fulfilling career: Passion, StrengthsandMarket. Of course, finding a career that satisfies all three conditions isn't easy.
Pew Research did a survey and found that 30% of college students pick majors that may satisfy their passion and skills parts of the equation, but have very poor job prospects.
By completing one or more confidential self assessments in the area of personal concern, you may discover a number of things about yourself. Knowing how you impact others can establish solid beginnings for developing productive relationships. Assessments can provide information to you on "Who am I?", "How others see me?" and "How do I relate to others?"
For a new generation of workers, the idea of seeking out a single career confidant is as old-fashioned as a three-martini lunch. One approach is “peer mentoring,” a gathering of like-minded individuals who can offer guidance for one another, much like Facebook (FB) Chief Operating Officer Sheryl Sandberg’s “lean in circles.” Younger workers are in pursuit of a sponsor, the preferred academic term for a mentor who goes beyond advising to actively promoting an underling. Several studies have found that sponsorship can be effective for securing better compensation, faster promotions, and job satisfaction.
Now there is an ever-changing age of economic uncertainty and constant adaptation. Promote Yourself offers a practical guide that breaks down the hard, soft and online skills that Gen Y workers need to build a strong network, create their own jobs and get ahead in their careers.
Recent weeks brought the biggest confrontation with Moscow since the Cold War, a race riot, a new low in the popularity of President Obama and grisly beheadings at the hands of religious terrorists amidst a major re-escalation of the war in Iraq.
If this sounds a lot like 1968, when Russia invaded Czechoslovakia, President Johnson bowed out of the presidential race as his popularity plummeted and the Vietnam war took a decisive turn for the worst, there’s a perfectly logical Wave Principle basis for it; both periods contain...
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About the Publisher, Elliott Wave International
Founded in 1979 by Robert R. Prechter Jr., Elliott Wave International (EWI) is the world's largest market forecasting firm. Its staff of full-time analysts provides 24-hour-a-day market analysis to institutional and private investors around the world.
As Baby Boomers age, student loan debt is likely to become a bigger problem.
Some 4.7 million Americans in their fifties owe education debt, up from 2.3 million in 2005, and the total amount is three times as high as it was nearly a decade ago, according to the Treasury Department.
More than 2 million Americans age 60 and older are carrying student debt, up from about 700,000 in 2005, according to the Federal Reserve Bank of New York. The debts are from old loans and more recent ones that older Americans take to go back to school or pay for college for their kids.
In total, this group has $43 billion in unpaid loans, five times what they owed in 2005. The average debt also has risen by more than 60% since 2005, to around $20,000 per borrower older than 60.
The government has the power to seize portions of the pay or Social Security checks of those who've stopped paying their federal student loans. It can also confiscate tax rebates. Borrowers can negotiate a repayment plan with the government to get out of default.
From January through July of this year, the government withheld money from the Social Security checks of 140,000 people, according to Department of Treasury data. A decade ago, a third as many seniors lost part of the benefit to pay off loans.
The economy is still recovering from the recession of 2008 and 2009, with unemployment still at an astounding 7.6%. Unemployment spent the years prior to the last recession ranging from roughly 4% to 6%.
The payroll tax hikes that kicked in at the beginning of 2013 are weighing on employers and consumers as well. They're enough to curtail incomes and that, in turn, will significantly dampen consumer spending.
The 2014 recession may not be as deep as the last one, but it will most likely be longer, because the Fed is running out of options. Think about it. What can the policymakers do to fix the problem this time? They won't, and the markets will be hit hard when the economy tanks, so we're entering a new world of investing.
Those who are aged 40 to 60 already suffered a recession, during which they saw their net worth cut in half in just 12 to 18 months. They have most likely pushed out their retirement dates as a result, and they're inventing more cautiously because they are experienced enough to know that anything that happened before can happen again.
Those who are aged 60 and older were affected the most by the last recession. Most didn't factor a stock market collapse and a 1.5% yield on U.S. Treasuries into their retirement plans. Some managed to enter retirement debt free and make the spending adjustments to make ends meet, but they may see their assets obliterated again. Those with debt, who could not retire, are in even worse shape.
One delusion common among America's successful people is that they triumphed just because of hard work and intelligence.
Too often, wealthy people born on third base blithely criticize the poor for failing to hit home runs. The advantaged sometimes perceive empathy as a sign of muddle-headed weakness, rather than as a marker of civilization.
In effect, we have a class divide, creating a vastly uneven playing field, and one of its metrics is educational failure.
This crisis in working-class America doesn't get the attention it deserves, perhaps because most of us in the chattering class aren't a part of it.
Rand Paul said, before a small gathering of the Rotary Club in Shelbyville, KY, "I think the war on drugs has had a disproportionate racial outcome. Three out of four people in prison are black or brown. White people do drugs too, but either they don't get caught or they have better attorneys or they don't live in poverty. It's an inadvertent outcome, and we ought to do something about it. As s Christian, I believe in redemption. I believe in a second chance. I think drugs are bad. I think even marijuana is deleterious. However, a 20-year-old kid who does make this mistake ought to get his right to vote back, ought not to be locked up in jail for 10 or 15 years."