I’m now in the 1,300-year-old Tibetan Town, in Dukezong in Yunnan province, southwest China. A mix of mostly Tibetan Buddhists and Muslims, the area, with its dramatic scenery inspired the fictional paradise of Shangri-La described in the 1933 novel “Lost Horizon” by British author James Hilton.
To say the surroundings of mountains, streams, sheep, yack, Tibetan Monks and Imams is a sight to behold is an understatement. I have never seen such peaceful surroundings and beauty!
Tibetan Town is also along the old Silk Road. A trading route that will also be modernized by the build out of China’s Silk Road 2.0, the 21st century version of a trading network that will open Western China and trade to Europe, to Middle Asia, to Southeast Asia and even all the way to Germany on the Western portion of the route.
In a few weeks, I’ll tell you all about it, including a travelogue I’ll put together. Not to mention how you can get set to profit from the build out of Western China and Silk Road 2.0.
But right now, let me turn your attention to the markets. More specifically, DEFLATION. It’s here, with a vengeance.
The massive losses last week in nearly all commodity markets are beginning to take their toll with devastating blows in everything from precious metals and energy, to foods, soft commodities such as coffee, cocoa and sugar, and more, including slumping meat prices.
What’s causing it all? Some think it’s the soaring dollar. And in part, it is strength in the dollar that is causing import prices to decline. But it’s much more than that. It’s what the strength in the dollar signals, for the dollar itself is rising due to …
First, the absolute total mess that Europe is in. I have been warning about this for some time now, and Europe’s meltdown is now in process. The euro currency has plummeted more than 25 percent in the past few months, a shocking collapse.
The euro may bounce in the short-term, but its decline is far from over. The euro, currently trading at roughly 1.0540 to the dollar, will ultimately fall to 0.80 to the dollar, then cease to exist.
Second, European leaders’ insane policies of austerity measures and piling on more debt at the same time. It’s crushing the economies of Greece, Spain, Portugal and more, where debt to GDP ratios are rising, strangling growth, causing unemployment to remain high, and the youth to start to rebel.
Savvy Europeans, anyone with half a brain, is moving money out of Europe and into the dollar.
Third, U.S. leaders aren’t all that much better. Still up against an $18 trillion Federal debt limit, hunting down every penny of wealth Washington can get its hands on domestically and overseas, killing our tech leading spot in the world with its planting of spying devices on hard drives and computers, spying on each and every one of us …
Is all leading to a risk-off, hoarding money type of effect, causing the velocity or turnover of money and credit to slump — outright deflationary.
Bottom line: There will be more deflation ahead. Much more. For Europe, for Japan, and for the U.S.
Keep your eye on gold. It has now tested support at the $1,140 level. A bounce is overdue, but once gold closes below $1,140, DEFLATION will accelerate even more, leading to another round of crushing blows in all commodities.
And don’t let anyone fool you about the price of oil. It too has not yet bottomed. Before deflation comes to a head, oil will be trading near the low $30 level.
If you own the inverse ETFs on gold and silver, recommended Oct. 15 and the bullish ETF on the dollar, recommended Oct. 29, HOLD!
They’ve racked up gains of as much as 10.9 percent (GLL), 10.9 percent (DZZ),13.5 percent (ZSL) and 15.9 percent (UUP), respectively.
Best wishes, as always …
P.S. I’m so concerned about the massive new threats to your income, savings, investments and retirement that I am ready, willing and able to give you everything you need to help protect and multiply your wealth in 2015 — absolutely FREE.