Skip to comments.Signs of Hyperinflation
Posted on 01/18/2013 3:02:09 PM PST by wredlich
Excerpt - Original at: Hyperinflation Signs: There are a few more signs of currency hyperinflation coming to the US and the world.
First, from a global perspective, the Wall Street Journal says even the Swiss are printing money now:
The nations central bank is printing and selling as many Swiss francs as needed to keep its currency from climbing against the euro, wagering an amount approaching Switzerlands total national output
When even the staid Swiss are printing money, this is a dark sign of not just US hyperinflation, but something weve never seen before a global hyperinflation, with hyperinflation across several (or all) of the major currencies and countries.
Also from a global perspective another WSJ article echoes widely reported news that foreign investors are buying up US treasuries.
Private foreign investors bought a net $60.9 billion in long-term U.S. securities, triple the amount bought in October, according to the Treasurys Departments monthly international capital report.
The accumulation of dollars increases the risk of a massive deleveraging when those holding the dollar begin to fear inflation. Because there are so many dollars being held by various investors, there is that much more that will flood the economy and cause inflation to spike.
What will these entities do if they start smelling inflation? If theyre smart, theyll start spending the cash, buying up assets that will hold their value. If it happens quickly, we end up with a massive deleveraging of cash positions and money flooding into the markets. The increased supply of money will reduce the value of that money or in other words, it will raise prices in dollar terms.
In some ways watching for hyperinflation is like being Chicken Little. A lot of us are sure hyperinflation is coming, but no one believes it until the sky crashes down on our heads.
Eventually, producers, such as grocery related, reach a point where they can no longer continue product shrinkage. At that point, inflation does kick in.
I noticed that local grocery stores have replaced many of their older shopping carts with newer carts that have smaller openings between the slats. Too many products were falling through the bigger openings on the older carts.
My 3lb can of coffee fell through the other day. Picked it up and noticed it had dieted down to 30.6 ozs. Just figured it was metric or something.
Wow. Biggest I can find any more is about 27.7 oz.
I can remember when a 3-lb can actually contained 48 oz.
Yeah. Stupid me. The "big" cans were always 3 lbs. Still call 'em that. I knew manufacturers were reducing the contents to maintain prices, but I hadn't actually stopped and looked.
Weird visual measurable but it’s the one my wife and I use most often: Note the size of the Oreo package. Priced the same, about half the size it used to be. The “double-stuff” Oreos now have about as much “stuff” as the normal Oreos used to have. The normal Oreos now have very, very little “stuff”. And ‘they’ think nobody notices what ‘they’ are doing to hide inflation! LOL
Here’s part of what’s going on:
No country wants to be left with the most valuable currency, as that makes their goods more expensive to sell. So EVERYONE is in a race to the bottom, to devalue their currency the most.
Bottom line...look at oil and gold prices, and you’ll get an idea of what’s REALLY going on - which is that there are a lot more (printed) dollars chasing the same amount of goods.
Money doesn’t make a lot of sense to me. If we owe trillions to say the Chinese, then how are their workers getting paid? Or for that matter how are any of the companies and people who we owe money to getting paid?
If I owed my neighbor $500, my neighbor no longer has that $500. If I spent it, neither do I. If I keep borrowing money from him, $500 at a time, and only pay a small amount back at the same time, won’t he eventually go broke and not be able to feed his family or keep up on his financial commitments? If he is so rich that he can keep doing this I have to wonder how is he making all of that money, that he can keep more or less giving it away to me.
The wierd thing about China, which was a fairly poor country not that long ago, is that we borrow money from them and then turn around and buy more of their goods. They then make some of the money back we just borrowed from them, but we still owe them more and more as we keep borrowing from them. In the mean time they keep on keeping on. They get our promises of pay back and we get their goods. I am not sure how this has kept going on as long as it has, and seemingly been somewhat mutually beneficial. Basically on paper they own us, but in reality can they or do they?
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