Economic Armageddon and You (Video)

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Ron Paul tells Manchester crowd inflation will hit 50 percent

Dees Illustration

Mark Hayward
New Hampshire Union Leader

MANCHESTER — Texas congressman Ron Paul on Friday predicted that inflation will hit 50 percent in the next couple of years, thanks to the massive debt the country has accumulated.

Paul, who spoke to admirers and Republican activists at a Manchester house party, said the inflation will act like default.

Social Security checks will still be cut and interest payments will still be made, but the inflated dollars will allow the government to repay borrowed dollars with devalued money, Paul said.

“They cannot pay the debt,” he said. “I don't think that means you shouldn't try and work things out, but with the size of this debt it never gets paid.”

The national debt is about $14.3 trillion.

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Following Currency Devaluation, Belarus Economy Implodes, Sets Blueprint For Developed World Future

Belarus Ruble Chart

Zero Hedge

"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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How Many People Will Go Hungry When The U.S. Dollar Ponzi Scheme Collapses?

Dees Illustration

Market Bust

The U.S. Dollar which is not really even a dollar but rather a "Federal Reserve Note" is nothing more than a mirage in the desert.  Federal Reserve Notes are just that, Notes.  What is a Note? It is a formal piece of paper that says one person owes another money, in this case the Federal Reserve.

But what are they going to pay you back with? More Notes of course. And what makes these notes valuable? Nothing more than the belief of the people who use them.

And how are these notes created? Quite simply they are borrowed into existence. This means that Money is just debt. So if all of the debt were to be repaid tomorrow, there would be no more "official Money". FIAT PONZI CURRENCY NOT BACKED BY ANYTHING EXCEPT HOPE.

Fed sees 'transitory' higher inflation: minutes

Fed chairman Ben Bernanke
© AFP/Getty Images/File Alex Wong

AFP

WASHINGTON (AFP) - The US Federal Reserve still views higher inflation as only temporary as the economy muddles through a weak recovery from recession, the central bank reported Wednesday.

According to the minutes of the April 26-27 meeting of the policy-setting Federal Open Market Committee, the participants "generally anticipated that the higher level of overall inflation would be transitory."

While there had been "significant increases" in energy and other commodity prices that had boosted overall inflation, FOMC members expected price increases would ease once commodity prices stabilized.

Double Digit Inflation has Arrived

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Greg Hunter
USA Watchdog

New inflation figures were released by the government last week, and the news was not good.  The headline inflation number was 3.2% in the 12 months that ended in April.  That is more than a percent above the Federal Reserve’s “target”rate of 2% and the first time it has been more than 3% in over than 2 ½ years.  Of course, the accounting gimmicks used by the Bureau of Labor Statistics (BLS) understate true inflation, so things look better than reality. Nonetheless, in the latest report from economist John Williams of Shadowstats.com, even the government’s own “official” numbers will likely showdouble digit inflation in the next three months or so.  The reason is continued money printing in the form of another round of Quantitative Easing (QE) by the Fed to prop up the struggling economy.  Williams said, “The underlying pace of official inflation is accelerating, and could move into double-digits in third-quarter 2011.  Preceding or coincident with that likely will have been some move to QE3 by the Fed and intense—if not panicked—selling of the U.S. dollar and dollar-denominated assets.  Such a circumstance could be a base from which a hyperinflation might begin to unfold with some rapidity.”

And get this, inflation is already in double digits, according to Williams, if it was calculated the way BLS did it more than 30 years ago.  Williams said, “. . . based on reporting of 1980, the April 2011 annual inflation rate would have been about 10.7%.” But, the double digit inflation story is not the one the mainstream media likes to tell.  Instead, it usually focuses on what the government calls “core” inflation that excludes food and energy.   The “core” inflation rate is .2%.  Who lives in a world where the core of existence is not food and energy?  A .2% core inflation rate is both preposterous and insulting to anyone living in the real world.

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The Washington Post Runs “Five Myths About The Federal Reserve” Authored By Economist Linked To The Rothschilds

End of the American Dream

There have been so many attacks on the Federal Reserve recently that the mainstream media now feels almost forced to try to defend their actions.  The most blatant example of this recently was an article in the Washington Post entitled "Five Myths About The Federal Reserve".  The article was authored by Greg Ip, the U.S. economics editor of The Economist.  According to Wikipedia, the Rothschild banking family is a partial owner of the firm that operates The Economist.  You would have thought that they would have gotten someone a whole lot less obvious to produce this propaganda piece, but apparently they did not think anyone would notice.  Of course an economics editor of The Economist is going to defend the Federal Reserve.  He would be fired if he didn't.  The Economist is well known to be a mouthpiece for the international central banking establishment.  But what is really sad is how poor a job Greg Ip did in defending the Fed.  If these are the best intellectual arguments they can come up with then they are in huge trouble.

Below are the "five myths" that Greg Ip attempted to debunk in his article.  I will tackle them one by one.....

#1 The First Myth About The Federal Reserve The Washington Post Supposedly "Debunked": By printing money, the Fed will create runaway inflation.


Are we going to have hyper-inflation tomorrow because the Federal Reserve is pumping $600 billion into the U.S. economy?

No.

But all journeys begin with a single step.  By initiating a new round of quantitative easing, the Federal Reserve has taken several huge steps down the road that could eventually lead to out of control inflation.  Let us hope that they stop and that we never get to that point.

However, the truth is that quantitative easing will cause some inflation.  It is only a matter of how quickly that money gets out of the banks and into the hands of consumers.

In his article, Greg Ip admits that the decision was made to go ahead with more quantitative easing because "the Fed is trying to stimulate spending", but then he also tries to argue "this money can lead to inflation only if banks lend it and consumers and businesses spend it."

Say what????

So either the Federal Reserve fails to stimulate spending (which is supposedly the whole purpose of quantitative easing), or spending will be stimulated and we will have inflation.

Perhaps Greg Ip should review some of the statements by top Federal Reserve officials in recent months where they openly admit that they want to create more inflation in order to stimulate the economy.

The notion that "this money can lead to inflation only if banks lend it and consumers and businesses spend it" is nonsensical at best.  According to Greg Ip, we will be perfectly fine as long as nobody lends any of this money and nobody spends any of this money.  Of course that is the whole purpose behind quantitative easing, but that little fact seems to have escaped the U.S. economics editor of the Economist.

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Inflation to Make All Americans Billionaires by 2020

National Inflation Association

One of the Federal Reserve’s original stated purposes was to manage the nation’s money supply through monetary policy that provides for stable prices without inflation or deflation. Shocking just about the whole world except for NIA members, the Federal Reserve this past week shifted its purpose from being an inflation fighter to now being an inflation advocate. Charles Evans, President of the Federal Reserve Bank of Chicago, is now saying that inflation in the U.S. is too low and the Federal Reserve needs to publicly declare a new goal of having inflation that is much higher than its informal 2% target. William Dudley, President of the New York Federal Reserve, is calling current low levels of U.S. inflation “a problem” because “it means slower nominal income growth”.

Dudley believes “slower nominal income growth” is unacceptable because it “means that less of the needed adjustment in household debt-to-income ratios will come from rising incomes. This puts more of the adjustment burden on paying down debt.” In other words, he wants to monetize our debts by printing so much money that all Americans are earning enough income to pay back their debts. NIA fears that one of the unintended consequences of such a policy will be an insurmountable currency crisis; this will lead to a U.S. societal collapse with class warfare, millions of Americans starving to death, and a return to a barter based system that will last until we can come up with a new form of workable government based on sound money that is backed by gold and silver.

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