Rushing the Gates of Hyperinflationary Hell ~ The Risk Averse Alert

Friday, December 06, 2013

Rushing the Gates of Hyperinflationary Hell

The Elliott Wave Principle provides an infinitely useful means of discerning the psychological backdrop underlying price movements of securities trading on the open market, as well as markets more broadly, where as a result of securities of a given class being exchanged, composite measures of trading activity (registered by indices) provide insight into mass psychology underlying the entire asset class. Consisting of a mere handful of fixed rules and guidelines the Elliott Wave Principle nevertheless offers a great deal of analytical flexibility. At any given moment several alternative views (all of which abide the Elliott Wave Principle's rules and guidelines) reasonably can be considered valid. The evaluated probability of each alternative, though, is subject to change with reassessment of dynamics driving market behavior.

Of course, by necessity some foundational viewpoint generally will persist across any set of alternatives under consideration. For example, we could go back to the 2008 period and consider our view that, financial collapse occurring on account of a highly correlated trade unwinding within a financial system that was (and still is) extremely leveraged—drowning in illegitimate debt created through a shadow banking system possessing an infinite multiplier—in fact marked the beginning of sorrows, not their end, contrary to claims made by foolish proponents of criminally insane monetarist policies pursued by pathetic pawns leading the Fed. This perspective of ours remains foundational to each and every Elliott Wave alternative we have to date considered here. Doomed is a Federal Reserve System acting as lord of zero due diligence blessing parabolic increase of illegitimate debt, and this no matter what existing capacity the Fed still has to perpetuate its cursed place at the apex of a failed paradigm erected through utterly reckless oversight exercised during the twenty year reign of King Ponzi Greenspan.

More recently we have come to certain conclusion that, the Wiemar experience is the preferred course forward being pursued by an anti-social oligarchy promoting its nation-state wrecking Venetian alternative with all the cultural charm of antebellum, southern plantations employing chattel slavery. Positively no repeat of the Great Depression will be ventured here, which conclusion only is to suppose the riches of the greater preponderance of today's so-called "wealthy" will be destroyed in hyperinflationary blowout, unlike what otherwise might occur were a Great Depression-like deflationary collapse of illegitimate debt forced upon the world, much like in 1931 when the Bank of England defaulted.

We have long established the fact that, there simply is no middle ground remaining to sustain the illusion of the trans-Atlantic banking system's solvency. It's either hyperinflate or die, and in both cases the end is the same. Nothing like an insolvent Federal Reserve and an intellectually bankrupt Ivy League at the foundation of a ruse coaxing the U.S. ruling class to run its head into a noose choosing the hyperinflationary route as the preferred method for insuring inevitable demise has the most far-reaching impact, which end, too, we could argue Venetian dogs have always intended, inexorably inviting systemic collapse and paradigm altering calamity starting with the demise of the Bretton Woods system of fixed exchange rates most emphatically, and continuing right up to the present moment encouraging out-of-control central banks, desperately trapped, to but quicken their march straight into hyperinflationary hell.

Now, in addition to there being every indication no demand whatsoever at the bottom of the capital structure is being stimulated by the Federal Reserve's reckless quantitative easing, we also have every reason to believe whatever "authority" still exists throughout trans-Atlantic institutions of government, as well as whatever "viability" its hopelessly insolvent banking system built on a Ponzi scheme still possesses, both likely will be cast to the wind and thrown into complete chaos sooner than avenue to further feign the continuing survival of the post-Bretton Woods illusion of functional capitalism will be afforded. Thus, there's reason to suppose the Elliott wave-based outlook expressed here over the past week or so likely will prove incorrect. Today's demand-starved climate is a big problem. No seeming capacity to ignore this fact day after day, week after week, lessens near-term risk otherwise defied throughout 2013, particularly given a broader technical backdrop only the more indicating the market is overripe for unraveling.

The perfectly hopeless state scheming Venetian oligarchs are venturing in hyperinflationary hell positively requires institutions of government be smashed, and any and all means of stabilizing these likewise compromised, if not outright destroyed. Thus, we have the past five years effort entrapping sovereign treasuries while at the same time sustaining the extremely leveraged state of many times over bankrupt money center banks. Throw in corporations all the more ensnared in a mountain of bond market debt, this at the behest of a dysfunctional banking system crippled in the aftermath of 2008's collapse, and now we see all are fattened for the slaughter set to kick off hyperinflationary hell. There isn't an institutional entity—public or private—at the foundation of the modern nation state that is not woefully trapped and in perfect position to be destroyed—picked apart. This in fact is intended. Anyone thinking otherwise ought have their head examined.

That there appears every intention to pull the plug before we are led to the gate of hyperinflationary hell, zero demand at the bottom of the capital structure rather evidently foretells. Were overt hyperinflationary dislocation more likely imminent, then should we not have seen some sign—any sign—of accumulation at the bottom of the capital structure? Absolutely, we should! Yet we have seen none for five years running now.

We should recall that, when Wiemar Germany was hyperinflating the burden of its WWI reparations debt the chase among Germans seeking return at the bottom of the capital structure became frenzied. Yet as the end in November 1923 drew nearer, not even that day's speculative mania in stocks, the likes of whose intensity was orders of magnitude crazier than what grips today's markets, could sustain the purchasing power of the rapidly devaluing German currency. Truth is in the lead-up to November 1923 we can be rather certain trading volume was just off the charts—frantic and explosive—as purchasing power was being relentlessly destroyed in hyperinflationary blowout of the German physical economy—shutdown—and so whatever means available to best preserve purchasing power surely were being pursued with abandon, even at great risk, because there simply was no other choice. We positively see no sign of anything remotely resembling this presently. Today's Venetian misanthropes evidently remain busy convincing their Ivy League stable that, "democratic fascism" these cruelly call "fiscally responsible policy" is near succeeding and will lead to central bank tapering, and so the ruling class' amassed wealth in all likelihood will be saved from hyperinflationary obliteration. We might only conclude here the price for a degree in "SUCKER!" is just off the charts, just like everything else.

Even now in fact, possessing entirely contrived values—mechanically manipulated—encapsulating a speculative mania founded on a "greater fool theory," equities simply are pure garbage—positively maggot infested trash. This quality about the asset class will become only more rotten once the gates of hyperinflationary hell are crossed. As there is just no way to shove down the Fed's throat all of today's garbage up and down the capital structure, cold hearted Venetian tools in Washington are sure to do whatever it takes to ensure the forgotten man is left holding the bag. Trouble is ruling elites will be holding a far bigger bag, the likes of which will be no less empty once some new age Montague Norman - Hjalmar Schacht combination steps in to end a still far from climaxing hyperinflationary nightmare. With history as our guide, some form of vile fascist hogwash will be ventured as "cure" to what then will be an only more profoundly insolvent banking system perched atop an even more thoroughly gutted physical economy ruined by Venetian pawns strategically placed at central banks and national legislatures and treasuries alike. The depth to which utter devastation likely will reach at the bottom of the chasm of hyperinflationary hell in all probability will bring many to wish they had not been such ardent advocates for insane monetarist prescriptions claiming to prevent another Great Depression.

The question right now is what might trigger a systemically threatening event exposing institutional entities of every sort, public and private, now entangled more deeply than ever in the failed paradigm King Ponzi Greenspan with reckless abandon blessed during his twenty year reign, and the Confetti Fed since has cemented into a more overt, hyperinflationary policy regime? Will it be failure of the Venetian slave system to move eastward into the Ukraine? Lord knows the insolvent euro-zone urgently needs bigger stiffs to bleed dry. Just as sub-prime reached the limit of beating pulses available to sustain the mortgage finance "boom" some years back, so too is a "United States of Europe" dependent on suckers who will buy the hype and disregard the steep cost likely to be incurred much sooner than might have occurred were circumstance resembling normal peacetime conditions.

We have previously entertained the above Elliott wave view wherein wave (b) of B is seen forming since February 2011 peak. Wave a of (b) took the form of a 3-3-5 "irregular flat" completing early-October 2011, while wave b of (b) is seen "alternating," thus taking the form of a 5-3-5 "zig-zag." This view suggests wave c of (b) [down] could imminently unfold. The question is just how devastating might its decline be?

Well, here we can keep it simple. If wave (a) of B developing off March 2009 bottom marked a 5-wave advance, then likely unfolding since March 2009 is a 5-3-5 "zig-zag" higher. Thus, wave (b) of B will not fall below March 2009 low and wave (c) of B following is certain to carry major indexes to higher levels than are presently being reached.

However, if wave (a) of B developing off March 2009 bottom marked a 3-wave advance, unfolding to form a 5-3-5 "zig-zag" into February 2011 peak, then wave (b) of B, already well along in demonstrating its alternation from wave (a) of B (seen here forming a 3-3-5 "irregular flat"), could in fact bring wave c of (b) to take out March 2009 bottom.

At this point the first view forward rather wins favor here. Unfolding from January 2000 to March 2009 was a 3-3-5 "flat" seen forming wave A of an Elliott corrective wave developing in the aftermath of the Dow's 5-wave advance off its 1932 bottom. So, on account of the Elliott Wave Principle's "alternation guideline," then, we rightly anticipate wave B will take the form of a 5-3-5 "zig-zag," which probability the first view concurs with.

Still, there's the issue of a systemically threatening calamity needed to effectively prostrate institutional entities in both the public and private sectors to the hyperinflationary hell a nation-state wrecking oligarchy rather evidently intends to impose. On account of this we could anticipate wave c of (b) of B likely sinking major indexes much closer to March 2009 bottom than criminally incompetent monetarist pawns leading the Fed under the delusional guise of avoiding another Great Depression are inclined to passively accept. Thus would the way be paved for hyperinflationary blowout of Wiemar proportions, setting the stage, too, for subsequent demise of the American republic in its present, constitutional form, just as a decrepit, European-based, Venetian-modeled oligarchy has persistently ventured for as long as there has been a United States.

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