Hey Nation get ready for Hyperinflation!

During the first phase of the crisis, we have been seeing a deflationary rather than an inflationary bias: This is because, hard as it may seem to believe, more wealth has been destroyed than created (at least so far). The plunging of the value of real estate, stocks, bonds, and any and all "paper assets" plus unemployment, price-slasing in the face of extreme competition, retail zones filled with "Going Out of Business" signs, etc etc -- that represents deflation, not inflation. Most univesities have lost around 1/3 of endowments if they are lucky. Individuals seem to have lost 1/3 or 1/2 of their stock/bond "retirement investments" (toxic paper crap), companies suddenly see credit lines vanish, states are going bankrupt (cali and 7 other states start issuing IOUs instead of cash on Monday!) The situation with pension funds and big insurance industries is even grimmer (many are functionally bankrupt even now although everyone is trying not to admit this). ALl this is deflationary.

AND YET the fed and treasury have been running the presses 24/7. cranking out trillion after trillion in real money and credit...we don't really know how much because they don't print basic econ credit creation stats like the M3 anymore! But at some point all this is going to hit the financial and economic bloodstream like a mainline shot of smack and the credit-strung-out nation will breathe a shakey sigh of relief as this $$ floods the ecomony again. You can bet at that point the MSM will start crowing about how "everythings fine now" and business is back to ususal, and all the ATS types will be laughed at and called tinfoil hatters...for awhile that is. It will be like this brief golden spot. Then INFLATION will set in because the Fed and Treasury will OVER-COMPENSATE instead of stopping where they should...then we really will swing back to desperate times as we experence severe (or even possibly hyper-) inflation. The press will try to keep the illusion going as long as possible but eventually people are going to see prices for the basics SKYROCKET once all this printing-press money hits the general market.




[edit on 7/3/09 by silent thunder]

reply to post by OBE1


You have a point; although when you comine the experiment of printing worthless money and increase interest rates at the same time we can look to Weimar Germany in the 30's to see the exact scenareo unfold.

Why they dont learn from past historical mistakes is beyond me.

reply to post by silent thunder


Thank you for your insight. You are wise. I also noticed your post on another thread about the French Revolution. You have some extremely good advice.

Thanks

reply to post by wonderworld

Hi wonderworld. Yes , my previous post was simply an heads-up to the investment community. I remain firmly planted in the inflationist camp , but the I/D debate has grown a bit long in the tooth for me. Same debate that took place in 02/03...same popular players...Mish/Ackerman/Prechter etc touting imminent deflation...E. Janzen/A. Hamilton/Sinclair et al opposing.

How did that turn-out ? Brief period of deflation (disinflation)...smothered by loose monetary policy. Gold from $300 to $1000.

A couple of points....$USD down sharply from .89 , struggling to hold .80 is not deflation. Oil up 100% in 45 trading days is not deflation. Stock loses are not deflationary...the market is zero-sum...money moves from losers to winners...it doesn't evaporate. Debt default is not deflationary...on the contrary. Money loaned is deposited (fractional pyramiding) and spent into the economy (inflationary). That liquidity is only withdrawn from the money supply when the borrower is able to service his debt , repay the bank loan - (deflationary).

No inflation without a wage price spiral ? Average real wages (CPI adjusted) peaked in early 1973 , and have been stagnating ever since...yet during this 36yr period we have witnessed chronic , broad scale inflation...commodities prices , financial assets , stock values , over-inflated real estate markets.

Couldn't agree with silent thunder more...patience folks , we're in the gestation period here. Our heavily indebted government has opted to externalize its problems via currency depreciation...a policy decision. Inflation is a given imo. Hyperinflation...the abject rejection of the USD as a medium of exchange....a tragic "unintended" consequence ?

Lets hope not.

GL

Originally posted by wonderworld

Hey Nation get ready for Hyperinflation!

Those who aren’t familiar with Hyperinflation; A days wages will buy a loaf of bread. It’s extremely devastating to an economy and 10 times worse than the Great Depression. During the Great Depression your 100 bucks in the bank will still buy 100 loaves of bread. During Hyperinflation that same 100 bucks will buy 10 loaves the first month and 1 loaf a couple months later. Let’s hope for A Great Depression.

The Weimar Hyperinflation: Time to get out the wheelbarrows?

Well their are other triggers at play here as well.

We have over 100's of trillions in derivatives set to implode.

100's of trillions in derivatives set to implode

We have japanese businessmen sneaking $134 billion in US bonds
around to sell it without attracting attention to it to prevent a run on the
banks or collapse of the bond market.

It has been confirmed by other news sources now that the
$134 billion in US bonds were likely real, and the japanese
men sneaking them around were likely japanese ministry of finance.

If that is true and they are trying to quietly dump them on the
market and other countries start doing it, we don't have long and
it is likely the trigger event for the Wall street journals mentioned
upcoming nationwide bank shutdown.

*** The two below say that the two japanese men stopped
with supposedly fake bonds were released...And if they
had been fake they would have broken the law and be
held on counterfeiting charges.
This says the japanese are dumping US bonds secretly
to get off the ship before it goes beneath the waves...

www.freerepublic.com...

market-ticker.denninger.net...

*** Below says US foreign Embassies are being told to horde
1 years worth of non-US currency due to a possible
lengthy banking shutdown.

www.marketwatch.com...

Speaking of shutdown, 7 banks in one day went poof...

www.fdic.gov...

Prepare accordingly !

Good Luck to you all !

reply to post by OBE1


Yes, the 2002 recession didnt last long, stock holders lost some money and we had a small unemployment issue. To date this one is longer and deeper than anything in the past 60 years, possibly longer.

They just now? realized the deficit is Worse than they thought. I'm thinking this is why Bernanke doewnt want a Fed audit.

I agree we are in the gestation period it's a waiting game to see how Obamanonics works out. If it fails we are all doomed. Same with Gordon Brown policies. It looks like the hole is deepening.

reply to post by Ex_MislTech


Thanks for all that informative advice. I never heard about the Japanese but heard about trouble in the bond market.

I did hear a few days ago 5 banks went down, were ther another 7 in the last couple days. I should be watching the news more.

Yes I also agree we can expect another electronic run on the banks causing them to shut down like last year's 1 hour shut down to prevent a total collapse. It's scary it can happen in one hour!

If citizens knew the truth now the banks would be shut down. FDIC wouldnt come close to having enough money to cover the losses! Then what?

I took my money out of my money market savings account around September 15th. The day Lehman fell and caused the Dow to drop 777 points.

My grandparents put the fear of God in to me about the Great Depression. Until the day they died they didnt trust banks and hid their money, in some very odd places. They didnt trust FDIC either. Now I see why. Last year I would have trusted them 100%, hearing they needed a loan didnt make it any better.

[edit on 4-7-2009 by wonderworld]

reply to post by wonderworld

52 banks have failed in 2009, aka 6 months

124,000 bankruptcies in 31 days, with the new stricter laws

The steady flow of ships comes to an end

300,000 homes seized per MONTH

661,914 Prime "so called stable" mortgages go overdue

32 of 46 states face budget shortfalls

247 banks are in the RED ZONE...

So it is looking pretty grim out there...


[edit on 4-7-2009 by Ex_MislTech]

reply to post by Ex_MislTech


Wow, that does give it a spin doesnt it? Those are horrific numbers. Most chose to ignor them and most arent on main stream media.

Thanks again for all those great link!!! Wow and they say it will bottom out in 4 years. I highly doubt that. Were due for a change but I dont think we will like what we get.

Originally posted by wonderworld
reply to post by Ex_MislTech

 

Thanks again for all those great link!!! Wow and they say it will bottom out in 4 years. I highly doubt that. Were due for a change but I dont think we will like what we get.

Yeah I still think the sword of damocles will be the 100's of Trillions
in derivatives fraud hidden on the penny stock market.

It will crush the financial markets into oblivion.

What we have seen is bad, but what is coming is many times worse.

Once the panic grips the public it is game over.

reply to post by Ex_MislTech


Youre right about the panic striking. In a normal business cycle we dont start to recover until there is blood on the streets. That hasnt happened yet; although many thought so in Sept and Oct. 2008.

I agree we havent seen nothing yet! I'm givng it until 2010, just a theory.

[edit on 4-7-2009 by wonderworld]

Well, I can think of a few good things as a result of hyper-inflation. One, we wont need to purchase toilet paper anymore and that will make the environmentalists happy because we wont be cutting down as many trees. Second, we wont need to purchase kleenex to blow our noses and again the environmentalists will be happy less trees cut down. Third, we have a fuel source to heat our barrels in tent city. Sorry for the sarcasm, but I thought a little levity should be added to such a somber subject.

However, I am in agreement with all of you that we are in for one heck of a ride; so fasten the seat belts and hold on. This deficit spending during a bitter recession is just plain lunacy. It's as though our legislatures are patients at the puzzle factory. Have they lost all sense! You would figure in tough times their budgets would be slashed and be a little more conservative in their expenditures. However, there is no sign of frugality but yet they expect the average American to live on nickles and dimes. As the average American is struggling to keep a roof over their heads, feed their families, keep a job; the politicians smoke cigars, drink fine wines, sip expresso, remodel their homes, purchase luxury cars, wear thousand dollar suits, ect. ect. ect. . .

When is jig going to be up and when are the people going to see that these money grubbing monsters in Washington care not of the struggles of their constituents but padding their own nests? The Washington of today might as well be the London of the American Revolution era some 3,000 miles away and separated by an ocean. In other words, the events in Washington might as well be happening on the Moon because they have no relation to main street and the perils of the common man.

reply to post by Jakes51


You forgot to mention eating squirrels because there will be plenty of trees left. By the way your avatar is looking pretty tasty too. Who knows what we will resort to eating.

P.S I like the tin foil hat on your?? Is that a cat, dog or rabbit I cant tell?

[edit on 4-7-2009 by wonderworld]

Originally posted by wonderworld
reply to post by Jakes51

 

You forgot to mention eating squirrels because there will be plenty of trees left. By the way your avatar is looking pretty tasty too. Who knows what we will resort to eating.

P.S I like the tin foil hat on your?? Is that a cat, dog or rabbit I cant tell?

[edit on 4-7-2009 by wonderworld]

The avatar is a black cat. In terms of the vittles you mentioned; are you bringing the A-1 or should I. Oh yeah, you forgot to mention possibly preparing some savory rat meat with cockroaches as hors d’ oeuvres. This is really serious times we are living in but if you can't find a little humor in it we might as well crawl into a hole and disappear.

reply to post by Jakes51


You bring the A1 and I’ll bring the spices. We can have Cajun squirrel, garlic squirrel, hot and spicy squirrel, or sweet and sour squirrel. Sounds like a nice Hyperinflation dinner. I should buy a milk goat. Ick on the goat milk.

I've been waiting on hyperinflation but right now I wonder if the MONEY is ever going to get into circulation.

I mean, they printed it, but where did it GO? I sure ain't getting any - we and everyone I know have had to endure pretty bad salary CUTS.

Originally posted by hadriana
I've been waiting on hyperinflation but right now I wonder if the MONEY is ever going to get into circulation.

I mean, they printed it, but where did it GO? I sure ain't getting any - we and everyone I know have had to endure pretty bad salary CUTS.

First they take the money out of the economy then they put it back in to the economy and tax it on the way back. It's BS. It's acomplished nothing but a bigger deficit.

It wont create hyperinflation. Nobody is failing to take into account the trillions of dollars wiped out in the recession.

reply to post by Spartak_FL


The trillions have been lost forever if you mean the stock market crash in 2008. Some is still sitting on the sidelines but much more has been wiped out.

The trillions off the press is a contributing factor.

Their is NO TRILLIONS off the darn printing presses people......they did not physically print tangible money at any high rate...... .....they created trillions in promises to insure bad debt's that should otherwise be allowed to default.....they created a trillion in "Insurance" to back up money market funds....they created credit out of thin air ....this is not being lent out by banks.......people's wages are not going up ....there will be no high inflation or hyperinflation because that would = such tremendous decline in standard of living that falls squarely on the gov't that people would stop talking thru letters and start talking thru shotguns

OBE1 the gov't realizes that real depreciation of the currency will not benefit the economy at all.....i don't believe they have chosen any such political decision to trash the currency.

unlike other country's when the dollar depreciates.....the price of energy and food Soar....due to the ability of investors/"speculators" being able to buy futures on margin

understand when the dollar is trashed (implying a trashed country will lose the world reserve currency)... the financial sector and military strength are as well .....

depreciating the currency would do no good......we have high and rising U6 unemployment.......wage's are stagnant and or falling for the majority.......the financial sector is not loaning into this enviornement.....asset prices are not turning up with the biggest credit collapse recent history....we are not "inflating out of debt"..the credit markets are dependent on trillions of gaurantee's and promises just to stay on life support....Ben B's printing press or "electronic equivilant" speech was to try and INSTILL CONfidence in the fed's abilities......believe him at your own perill....just like the "subprime crisis was containted".....he is trying to maintain CONfidence....Gov't shills sell this crap nite and day and gold bugs simply CHOOSE to believe it.................we will have debt serf's and fascism......not hyperinflation.....Jim sinclair and J willie are inflexible due to the need to maintain their positions to maintain credibility and a job

this does not mean we have crippling deflation IMO......just no hyperinflation and a hell of a time to try and get some ordinary inflation

p.s now should the gov't take over banks and start printing 10,000 dollar bills i will revisit other possiblities or should the gov't take to handing out 10,000$ thank you for not protesting or rioting gifts i will re-consider as well...........

the discussion itself def vs. hyperinflation is really more of a red herring
the reality is the very real threat of a rapidly decreasing standard of living for most....and fascism........the elite grew great amounts of wealth and the disparity was somewhat shadowed by the amount of debt the consumer took on to appear like they were "keeping up" to some degree......now the debt clock struck midnite and the consumer is F(*K(D

[edit on 5-7-2009 by cpdaman]