The Return of Depression EconomicsBy Nico Omer Jonckheere

November 6th, 2015

Do You Know What Is The BIGGEST PROBLEM Facing The World Today?

Global debt levels have reached an astronomical $199 trillion, representing $27,200 owed for every single human on the planet.

Here is the state of debt across 47 nations – 22 advanced and 25 developing:

AMERICA is BANKRUPT and on borrowed time.

You can see from the chart above that despite the hiccup in 2008-2009, the central planners are determined to continue inflating the

GLOBAL PONZI DEBT SCHEME.

Where does this leave America and really the rest of the Western world whose data will mirror the US?

If the chart below looks INCREASINGLY EXPONENTIAL, that is not a coincidence.

China’s total debt has quadrupled from $7 trillion in 2007 to $28 trillion in the middle of last year…

… and Japan’s debt-to-gross domestic product (GDP) ratio reached an eye-popping 230% last year.

A “Saturated World”

The global economy is stalling, not withstanding the massive monetary “stimulus” that has been thrown at it by the central banks.

As the old adage goes “you get what you pay for” and when the world is offering ‘money’ for free, one can only surmise its worth is

also close to zero…

The War Against Deflation”I’ve said all along that the Fed will not tolerate deflation,

and that it will do whatever it takes to keep the US economy from deflating. On this basis I do not expect the Fed to raise rates this year or next, and it would not surprise me to see

the Fed bring in QE4 or something like it.”

-- Richard Russell

Growth of Central Bank Balance Sheets

This next chart is not a prediction, but is illustrative of the exponential nature of the next phase transition of Fed monetary

policy.

Historically, actual “HYPERINFLATION”, meaning a currency officially plunging-to-zero, is “a

confidence event.”

If this is the ‘recovery’ just what will the next recession look like?

Here is a chart that illustrates US economic activity on the production side.

Is This A Global Industrial Depression?

My Favorite Investments

Commodities have plunged to the lowest level since 1999!

While relative to history, the space is under-owned – by a lot:

OIL

Global inventories will pile up further and demand will not cut into the surplus until late 2016 at the earliest.

Any realization that the Middle East is suddenly a far more violent powder keg – one which may promptly include the Saudis in any

confrontation – could result in an epic short squeeze.

Does this look like an accidental relationship to you?

This Is a Very High Probability Location for a Base to Develop

The RSI indicator is showing significant positive divergence to the oil price which is supportive of expectations for a trend higher.

GOLD

Gold and silver are safe havens within periods of economic uncertainty. As you know a global financial crash creates economic uncertainty. It is time to GET OUT OF PAPER AND INTO TANGIBLE ASSETS.

Source: www.smartmoneytracker.blogspot.com

Source: www.clivemaund.com

Source: www.smartmoneytracker.blogspot.com

The gold shares to gold ratio is now at the bottom side of a 44-year down channel and it’s formed a several decade falling wedge.

Hedge funds are desperate for gains and as gold and gold stocks start to rise, I believe that gold stocks will turn into the new

‘momentum class.’

J Resources

History Doesn’t Repeat Itself But It Does Rhyme

Gold Bullion “Extremely Rare”

In contrast to fiat currencies, gold supply has grown by only 1.6% per year. This clearly underscores its relative scarcity!

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