Rising interest rates along with the surge in commodity prices that we have been seeing in the back half of this year is writing on the wall that hyperinflation is very near. If anyone needs further proof just look at what QE2 is already doing. The Fed is turning government debt that the market doesn’t want into currency which is the cause of all hyperinflation.The link to this quickie is HERE. Essentially, if you are not accumulating precious metals right now, expect that your financial well-being eventually will be tragically compromised. I'm thinking the new slogan on U.S. currency should be: "In the printing press we trust."
Tuesday, December 21, 2010
And print money is what the Fed has been doing best - really since 1971 after Nixon closed the gold window:
(click on chart to enlarge)
And really this chart just shows M2, since the Fed has removed its reporting of M3 since March 2006. The missing component is large eurodollar deposits. My friend and colleague "Jessie" wrote an excellent summary of how the Fed is exploiting this category to really ramp up the money supply off the books. His essay can be found HERE
As a follow-up to my commentary yesterday on the looming State/municipal catastrophe, check out this post on Clusterstock today - LINK. Not only are most large cities strapped with massive budget deficits, but as the analysis in the Clusterstock piece demonstrates, municipal property tax receipts are going to take a big dive. This will just add gasoline to the fire. Expect the Federal Government to bail out this situation via even more Fed printing.
Finally, check out this King World News interview with James Turk, who explains why we are in the incipient stages of hyperinflation:
Posted by Dave in Denver at 2:07 PM