Showing posts with label HYPERINFLATION. Show all posts
Showing posts with label HYPERINFLATION. Show all posts
Tuesday, September 4, 2012
Thursday, May 26, 2011
Following Currency Devaluation, Belarus Economy Implodes, Sets Blueprint For Developed World Future
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| Belarus Ruble Chart |
"A ‘91-style meltdown is almost inevitable." So says Alexei Moiseev, chief economist at VTB Capital, the investment-banking arm of Russia’s second-largest lender, discussing the imminent economic catastrophe that is sure to engulf Belarus following the surprise devaluation of the country's currency by over 50%, which weannounced on Monday. "Unless Belarus heeds Russia’s call for mass privatization of state assets, it is headed for “hyperinflation, massive un- and under-employment, and a shutdown of production" Moiseev concludes.
Ah: "privatization" as Greece is about to learn, the lovely word that describes a fire sale of assets to one's creditors, courtesy of a "globalized" new world order. Ironically, this is precisely the warning that will be lobbed at each country in the developed world, as the global race to devalue currencies, first against each other on a relative basis, and ultimately against hard currencies, or on an absolute basis, as the world realizes that there simply is not enough cash flow to cover the interest payments on a debt load, in both the public and private sectors, that continues to rise at an astronomic rate, even as the world prepares to exit from the latest transitory, centrally-planned bounce in the Great Financial Crisis-cum-Depression that started in earnest in 2007 and has been progressing ever since.
Ultimately, Belarus will succumb to hyperinflation, as will each and every other government seeking to devalue its currency (hint: all of them): "Unless Belarus heeds Russia’s call for mass privatization of state assets, it is headed for “hyperinflation, massive un- and under-employment, and a shutdown of production,” VTB’s Moiseev said. The ruble will slide to 10,000 per dollar, he added." Of course, this is the primary side effect of attempting to avoid formal bankruptcy through currency devaluation. And all those who continue to believe deflation is an outcome that will be allowed by the Fed, need to look just to the former Soviet satellite to see what lies in store for everyone currently doing all in their power to devalue their currency.
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Wednesday, May 4, 2011
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Thursday, December 9, 2010
Why Use Gold As Money?
Activist Post
History shows us that when countries use a valuable commodity for money they have zero or low inflation; zero or minor cycles of economic panic or depression; and more peace, liberty, and prosperity (smaller governments).
For example, the number of grams of gold needed to buy a barrel of oil has been very steady over the years. A key benefit of using gold as money is its value stability. Even better, Econ 101 tells us that a commodity such as gold in limited supply, and with increasing demand for it (growth of the economy), will APPRECIATE in value. This has huge importance because it kills the "there is not enough gold" argument, and gives a positive incentive to save and avoid debt.
Thus, we would expect all countries to use sound money, except the politicians want more money than they can get by just taxing, especially for wars. They want a way to create money "out of thin air." Fiat money ("face value" decreed by the government, not redeemable for gold; we call ours Federal Reserve Notes) serves this purpose. Even when some level of redeemability (exchange for precious metal) exists, governments often suspend it before, during, and after wars, which the US did for the Revolutionary, 1812 and Civil wars, after which it must be pushed to restore it -- often with less value.
The two key reasons for using a commodity as money are to:
A. Limit excess expansion of the money supply (inflation; loss of value) by the government (you can’t trust them).
B. Provide a market-based store of value. The commodity could be wheat, iron, diamonds, or pearls, but the market (users of money) usually chooses gold because it works best.
To achieve broad use, commodity coins must be made of, or contain, a material that is:
1) Rare, with a low amount in existence now and limited new supply.
2) Malleable, so can be made into coins.
3) Stable physically and chemically; doesn't break, rust, or rot (can be stored; lasts through much handling).
4) Easy to identify (recognize), and determine purity and amount.
5) Difficult or impossible to counterfeit.
6) Homogeneous in content (a melted chunk is the same throughout).
7) Divisible into pieces (diamonds and pearls aren’t).
8) High value per ounce (not bulky to handle or store).
9) Acceptable to most sellers (familiar and recognizable).
This approach allows the use of representative paper notes ("claim checks" for gold), or base-metal tokens, so long as they are marked to show the amount of gold they can be redeemed for by any bearer, on demand.
The market of money users has decided that gold fits the above requirements best, but silver and copper can have a role in parallel, with no fixed ratios set between them as to value per gram (i.e., no bi-metallic standard). It is interesting to note that gold is not "consumed" as are other commodities, including silver and copper. Thus, except for wear, over 90% of all gold mined in history still exists (even if buried in a tomb). Silver and copper supplies and costs are more volatile than gold (more new production, are consumed for industrial use, etc.), so are less attractive, but usable. When gold is used as money, it has no "price" anymore -- weight is the unit of account. This will take some getting used to as we evolve to pricing in weight of gold.
History
From its origin until 1913, the US used a combination of foreign and domestic coins and local "bills of credit," had two failed central banks, Continental and Greenback paper dollars (both became worthless), and various runs and panics in a turbulent banking system. The unconstitutional Federal Reserve System was created in 1913 and had a monopoly on creation of "legal tender" money. It was secretly planned by bankers and politicians, for bankers and politicians. At first, anyone had the right to trade-in their Silver Certificate paper dollars for a silver dollar (this ended in 1968), and deal in gold for transactions. In March, 1933 (his first month in office) FDR took those rights from mere people, and only nations could redeem paper for gold. In 1971 Nixon ended this right for nations when he abrogated the 1944 Bretton Woods Agreement due to our serious financial problems ( a. We were running out of gold because France, England, and others were redeeming the US dollars accumulated in Europe due to our postwar spending and loans there, and b. The US was poor after spending on Vietnam and LBJ's 'Great Society', etc.). With no link to gold, the US could make dollars out of thin air as needed, and did we ever! Prices started their 'hockey stick' shaped rise a few years later as the effect of excess money creation and spending trickled to the world economy. Within in a few years, all nations worldwide ceased redeemability, even the prudent Swiss floated the Swiss franc (SF), but have been less abusive than others; hence while 1 US$ = about 4 SF in 1961, it is now about 1 US = 1 SF, so they only inflated by 2.5 while by 2008 the US inflated by 10; 4 times more!
Where We Are Today
The US has been the worst abuser among developed nations (older countries remembered their lessons from past monetary failures). The US has created so much new free, fake money since 1971 that the US dollar has lost about 80% of its purchasing power since then (this excess expansion of the money supply is called monetary inflation, like a balloon) with its consequent price increases (due to loss of the dollar's purchasing power) called price inflation. Check prices of common commodity items (that are not imported, subsidized, cheaper due to new technology, or under price control), such as a pizza, a restaurant meal, or even a car. Good examples are:
1. A room at a Motel 6 cost $6 in the 1950s, but is now in the $50 range in 2010 (same type of room and service)
2. A family car cost about $2,000 in the ’60s, but is now about $20,000 in 2010.
There is your 8 to 10X loss of USD value since the late 1940s (when the post-war big-spending started)! This ties-in with the over 95% loss of the dollars value since the Fed started! The only reason we can get away with our worldwide spending and borrowing is because the USD is the world's reserve currency (any person or bank will take and keep it as if "good as gold") and we can create new money to pay our bills. The dollar is viewed as a share in USA, Inc., the world's strongest economy, which sadly is fading (faster since 2007), as we continue the long abuse of our economy (by spending, taxing, and harmful intervention by the Fed and government) and money (by excess expansion of the supply). The era of US world dominance is ending, as it does with all empires (Rome, Spain, England, France, etc.). When (not if) the dollar loses its reserve currency status, there will be a 50% or more loss in value in a few days, and prices at Wal-Mart will triple!
Politicians and bankers love an unending supply of cheap money, but such fiat systems always fail. It is part of the pattern for all failed empires in history, and the Empire-USA is now entering the failure phase. To avoid a chaotic crash, we must reduce spending (including our role as the world’s policemen and bully), and convert to a gold-money system! The gold we own could be used to back all existing US dollars, and allow redemption of paper for gold. This would amount to about 2/10,000 ounce per dollar (or less if the Fed is lying about how much we have), and imply a price of about $50,000 per ounce. Thereafter, prices would be in weight of gold(grams, milligrams). All nations would soon convert to gold money, or sellers would not accept their trash paper. Variable foreign exchange valuations would end between countries using gold. The IMF, World Bank, BIS, G-20, and all other meddling government groups would fade and die (good). Time is short (1 to 10 years) before the big crash starts.
Write, call and visit your Senate and Congress persons to urge support of this new system. Most now prefer hyperinflation (print money to pay bills), or default (ignore debts), but that causes more damage and has no future benefit. Despite the pain and losses the conversion to gold may cause, the damage is far less than an uncontrolled crash, and there is a bright future afterward. Let’s get started.
David Redick has authored two books Monetary Revolution USA
, and Rebuild America Now
. Mr. Redick is a "Ron Paul Style" Republican running for Wisconsin State Assembly and supports establishing a state bank.Related Article by David Redick:
The Impact of Fiat Money as The World's Reserve Currency
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Friday, November 26, 2010
The Year America Dissolved
Prison Planet
It was 2017. Clans were governing America.
The first clans organized around local police forces. The conservatives’ war on crime during the late 20th century and the Bush/Obama war on terror during the first decade of the 21st century had resulted in the police becoming militarized and unaccountable.
As society broke down, the police became warlords. The state police broke apart, and the officers were subsumed into the local forces of their communities. The newly formed tribes expanded to encompass the relatives and friends of the police.
The dollar had collapsed as world reserve currency in 2012 when the worsening economic depression made it clear to Washington’s creditors that the federal budget deficit was too large to be financed except by the printing of money.
With the dollar’s demise, import prices skyrocketed. As Americans were unable to afford foreign-made goods, the transnational corporations that were producing offshore for US markets were bankrupted, further eroding the government’s revenue base.
The government was forced to print money in order to pay its bills, causing domestic prices to rise rapidly. Faced with hyperinflation, Washington took recourse in terminating Social Security and Medicare and followed up by confiscating the remnants of private pensions. This provided a one-year respite, but with no more resources to confiscate, money creation and hyperinflation resumed.
Organized food deliveries broke down when the government fought hyperinflation with fixed prices and the mandate that all purchases and sales had to be in US paper currency. Unwilling to trade appreciating goods for depreciating paper, goods disappeared from stores.
Washington responded as Lenin had done during the “war communism” period of Soviet history. The government sent troops to confiscate goods for distribution in kind to the population. This was a temporary stop-gap until existing stocks were depleted, as future production was discouraged. Much of the confiscated stocks became the property of the troops who seized the goods.
Goods reappeared in markets under the protection of local warlords. Transactions were conducted in barter and in gold, silver, and copper coins.
Other clans organized around families and individuals who possessed stocks of food, bullion, guns and ammunition. Uneasy alliances formed to balance differences in clan strengths. Betrayals quickly made loyalty a necessary trait for survival.
Large-scale food and other production broke down as local militias taxed distribution as goods moved across local territories. Washington seized domestic oil production and refineries, but much of the government’s gasoline was paid for safe passage across clan territories.
Most of the troops in Washington’s overseas bases were abandoned. As their resource stocks were drawn down, the abandoned soldiers were forced into alliances with those with whom they had been fighting.
Washington found it increasingly difficult to maintain itself. As it lost control over the country, Washington was less able to secure supplies from abroad as tribute from those Washington threatened with nuclear attack. Gradually other nuclear powers realized that the only target in America was Washington. The more astute saw the writing on the wall and slipped away from the former capital city.
When Rome began her empire, Rome’s currency consisted of gold and silver coinage. Rome was well organized with efficient institutions and the ability to supply troops in the field so that campaigns could continue indefinitely, a monopoly in the world of Rome’s time.
When hubris sent America in pursuit of overseas empire, the venture coincided with the offshoring of American manufacturing, industrial, and professional service jobs and the corresponding erosion of the government’s tax base, with the advent of massive budget and trade deficits, with the erosion of the fiat paper currency’s value, and with America’s dependence on foreign creditors and puppet rulers.
The Roman Empire lasted for centuries. The American one collapsed overnight.
Rome’s corruption became the strength of her enemies, and the Western Empire was overrun.
America’s collapse occurred when government ceased to represent the people and became the instrument of a private oligarchy. Decisions were made in behalf of short-term profits for the few at the expense of unmanageable liabilities for the many. Overwhelmed by liabilities, the government collapsed.
Globalism had run its course. Life reformed on a local basis.
Dr. Roberts was Assistant Secretary U.S. Treasury, Associate Editor Wall Street Journal, Columnist for Business Week, Senior Research Fellow Hoover Institution Stanford University, and William E. Simon Chair of Political Economy in the Center for Strategic and International Studies, Washington, D.C.
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Saturday, November 6, 2010
What Will Hyperinflation in the U.S. Look Like?
In this audio interview, John Embry, chief investment strategist for Sprott Asset Management, tells King World News why he believes hyperinflation is a certainty.
Blogger Gonzalo Lira has also published a disturbing piece detailing what the effects of hyperinflation in the U.S. would be.
He used as an example one of the modern instances of hyperinflation -- Chile under the government of Salvador Allende.
The currency became worthless, and when consumer goods ran out and were rationed, people perceived as unfriendly to the government received insufficient rations or none at all.
A black market soon arose, which accepted only foreign currency. The economy collapsed completely as people cashed out their assets to buy basic goods and staples on the black market.
In the U.S., the blog predicts a slightly different path to the same destination:
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Sunday, October 31, 2010
Signs Hyperinflation Is Arriving
Gonzalo Lira
Such a run on commodities, I further argued, would inevitably lead to price increases and a rise in the Consumer Price Index, which would initially be interpreted by the Federal Reserve, the Federal government, as well as the commentariat, as a good thing: A sign that “the economy is recovering”, a sign that “normalcy” was returning.
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It is time to Wake Up! You too, can join the "Global Political Awakening"!
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This post is gonna be short and sweet—and scary:
Back in late August, I argued that hyperinflation would be triggered by a run on Treasury bonds. I described how such a run might happen, and argued that if Treasuries were no longer considered safe, then commodities would become the store of value.
Back in late August, I argued that hyperinflation would be triggered by a run on Treasury bonds. I described how such a run might happen, and argued that if Treasuries were no longer considered safe, then commodities would become the store of value.
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| See, how come I don’t look as cool when I make my predictions? |
I argued that—far from being “a sign of recovery”—rising CPI would be the sign that things were about to get ugly.
I concluded that, like the stagflation of ‘79, inflation would rise to the double digits relatively quickly. However, unlike in 1980, when Paul Volcker raised interest rates severely in order to halt inflation, in today’s weakened macro-economic environment, that remedy is simply not available to Ben Bernanke.
Therefore, I predicted that inflation would spiral out of control, and turn into hyperinflation of the U.S. dollar.
A lot of people claimed I was on drugs when I wrote this.
Now? Not so much.
Therefore, I predicted that inflation would spiral out of control, and turn into hyperinflation of the U.S. dollar.
A lot of people claimed I was on drugs when I wrote this.
Now? Not so much.
In my initial argument, I was sure that there would come a moment when Treasury bond holders would realize that they are the New & Improved Toxic Asset—as everyone knows, there is no way the U.S. Federal government can pay the outstanding debt it has: It’s simply too big.
So I assumed that, when the market collectively realized this, there would be a panic in Treasuries. This panic, of course, would lead to the spike in commodities.
So I assumed that, when the market collectively realized this, there would be a panic in Treasuries. This panic, of course, would lead to the spike in commodities.
However, I am no longer certain if there will ever be such a panic in Treasuries. Backstop Benny has been so adroit at propping up Treasuries and keeping their yields low, the Stealth Monetization has been so effective, the TBTF banks’ arbitrage trade between the Fed’s liquidity windows and Treasury bond yields has been so lucrative, and the bond market itself is so aware that Bernanke will do anything to protect and backstop Treasuries, that I no longer think that there will necessarily be such a panic.
But that doesn’t mean that the second part of my thesis—commodities rising, which will trigger inflation, which will devolve into hyperinflation—will not occur.
In fact, it is occurring.
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End of Liberty (Full-length VIDEO)
YouTube -- InflationUS
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Live Superfoods It is time to Wake Up! You too, can join the "Global Political Awakening"!
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The National Inflation Association (NIA) has now released a 2-minute trailer for 'End of Liberty', NIA's new documentary coming at the end of October. 'End of Liberty' is the most eye-opening film ever produced aboutthe United States government. The film would be funny if it wasn't so true. It promises to be the most important movie you will ever watch in your entire life.
'End of Liberty' exposes from a real life perspective how the U.S. is headed for a complete societal collapse. All Americans are now experiencing countless warning signs on a daily basis that a societal collapse is near. Unfortunately, most Americans don't understand the significance of these warning signs. Each warning sign by itself doesn't appear to have a lot of meaning, but together these warning signs present a very detailed picture of the current state of the U.S. economy and where this country is soon headed.
'End of Liberty' is over an hour long and features Gerald Celente, the most accurate trends forecaster in U.S. history. 'End of Liberty' also features NIA's President Gerard Adams, who on February 5th purchased call options in the silver ETF at $0.89 (NIA publicly announced his purchase to NIA members on February 8th) that he sold last week at $4.25 for a gain of 378% in a little over eight months. 'End of Liberty' was written with the help of thousands of NIA members who submitted their ideas of warning signs that a societal collapse is near.
NIA's critically acclaimed documentaries 'Meltup', 'The Dollar Bubble', and 'Hyperinflation Nation' have now received a combined 2.1 million views. In all three of NIA's previous documentaries, NIA strongly urged its viewers to consider investing into gold and silver, in order to protect themselves from a collapsing U.S. dollar. Since the release of NIA's first documentary 'Hyperinflation Nation' on June 28th, 2009, gold has risen by 48% from $940 per ounce to a new all time high of $1,388 per ounce, and silver has risen by 74% from $14.13 per ounce to a new 30-year high of $24.65 per ounce.
To watch the 'End of Liberty' trailer, please go to: http://inflation.us/videos.html
It is important for you to contact all of your friends and family members and tell them to become members of NIA for free so that they along with you can be the first to see 'End of Liberty'. By the end of 2010, the whole world will be talking about this movie.
To become a member of NIA for free, simply submit your email address on our homepage at: http://inflation.us
About us:
The National Inflation Association is an organization that is dedicated to preparing Americans for hyperinflation. The NIA offers free membership at http://www.inflation.us and provides its members with articles about the economy and inflation, news stories, important charts not shown by the mainstream media; YouTube videos featuring Jim Rogers, Marc Faber, Ron Paul,Peter Schiff, and others; and profiles of gold, silver, and agriculture companies that we believe could prosper in an inflationary environment.
SOURCE National Inflation Association
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Saturday, October 16, 2010
Peter Schiff: This is truly an Orwellian World
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