Martin Armstrong – Hotel U.S - You Can Check Out Anytime You Like- But You Can Never Leave

Martin Armstrong is an iconic investor who has called more market tops and bottoms than just about anyone else out there. He believes that hyperinflation will not occur in the US so long as there’s a functioning bond market. He believes that the government will be forced to drastically cut spending and cut back benefits. Social security will be cut, along with all major government programs. The bond vigilantes won’t have it any other way. This will lead to a lost decade, with price inflation starting in 2014 and a real collapse occurring after 2015. Whether his vision will come to pass remains to be seen. Listen to the Interview

"...so long as there’s a functioning bond market."

Which big "so long" won't be all that long.

"He believes that the government will be forced to drastically cut spending and cut back benefits. Social security will be cut, along with all major government programs."

Read as government-paid teachers, administrators, planners, inspectors, police, social workers, services overly dependent on government-supported customers, environmentalist NGOs and other socialist overseers receiving big federal pork will attempt to shift debt/revenues away from their impoverished colleagues and elderly folks.

"The bond vigilantes won’t have it any other way."

Read as "The bond vigilantes"--fund managers/advisers, their clients and relatives, the government-paid/government-linked pensioners, teachers, administrators, planners,...all, "won’t have it any other way." Net socialist hogs of increasingly worthless debt/revenues claiming to be the almighty taxpayers and pushing socialist candidates in both political parties. Their aren't many real net taxpayers remaining in the system (unless you count service business folks who mostly rely on government-supported customers and support the same socialist politicians).

"This will lead to a lost decade, with price inflation starting in 2014 and a real collapse occurring after 2015."

That's about right, date-wise, if world war or other catastrophe doesn't speed the process up. Bring it on. After the other end of the default process, we'll see much smaller government and two distinctly different political parties again. Government cannot continue to be big without sustainable revenues from a large manufacturing base, and deposed socialists cannot be very politically active without their current money and time.

We've already seen violent crimes from bureaucrats in Wisconsin, Colorado, California etc. They'll go from getting away with committing their crimes from their offices to committing more traditional crimes (robberies, home invasions and the like). Many of them will pose as public officials when doing so. Mind your home security, prepare to be more self-sufficient post-bond-collapse.

Just sayin' get ready for a dry spell. See why both political parties lean so socially and fiscally far to the left, BTW?

Except hyperinflation is most likely to take place in demand markets, like commodities and specialty goods whose market can be cornered by speculation.

Right now, there are a lot of markets where production is coordinated with retail, so there is only a tiny bit of overproduction, reducing waste. However, these only work when speculator activity is about at the same level.

Normal inflation is fairly slow because of market forces, but when there is a sudden jump in speculation trying to corner a market, retailers are hit with a double whammy of inflation because of shortage, the speculators having pulled products out of the market, and having to pay a lot more for the same amount of commodity because of the bidding war with speculators.

This results in hyperinflation.

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