Skip to comments.Dollar Sell-off and Hyperinflation by 2014 – John Williams
Posted on 10/24/2012 9:15:04 PM PDT by Errant
Economist John Williams says the latest round of open-ended QE has set the table for a global dollar sell-off and hyperinflation no later than 2014. Williams says, Theres no way the consumer can fuel the economic recovery, and there is no way were going to see one in the near future. Williams predicts, The Treasury is going to have funding problems, and that means the deficit gets a lot worse.
(Excerpt) Read more at usawatchdog.com ...
His argument makes a lot of sense.
Very very possible. I think Rush predicted the same time period
Can’t see “hyper” inflation coming until there is “hyper” recovery in job market. With fewer jobs, consumer demand will stay sluggish. The horse is jobs, the cart is inflation. Can’t put cart before the horse.
Pretty shocking to hear it from someone like John Williams. 2014 is his estimate on the outside. At least we have a bit more time to prepare.
It seems we're trapped with no easy way out...
Hyperinflation is measured in the 100s%. This is extremely unlikely. While Housing and Construction are flat on their backs there ain’t gonna be inflation.
As to the dollar collapse. There is little chance of another reserve currency so that is not likely either. Europe and Japan and China are all inflating as fast or faster than the US.
Even if the government tried to increase benefits to match previous inflation they would be a drag on any “hyperinflation” since the private sector would rapidly collapse.
Hyperinflation would only be possible if the public believed Congress would increase benefits in a way to exceed past inflation—not likely.
A more realistic settlement of the massive debt would be a default to foreign creditors and massive (forced) austerity.
Inflation yes, hyperinflation not likely. Williams is right that there is no big recovery around the corner. We have about 10 years to go to work through this mess.
Williams is wrong. Japan has been doing far more QE than the U.S. every year since 1989 without hyper-inflation.
We have not had hyper inflation since the Carter era of late 1970’s. Why do you think that is? From Reagan on to Obama, we have added $12 Trillion+ to the national debt. The gov’t has printed money like crazy! But still no hyper-inflation!
Who do you think that is? I can tell you if you are curious.
...”At least we have a bit more time to prepare”...
We already know inflation is here because we buy groceries and gas. It is a huge con on the American people not to include these items that everyone has to buy in the inflation numbers.
If the dollar starts weakening and China resumes its torrid growth, we can experience inflation because most commodities are traded on world markets which with a weakened dollar can accelerate prices.
It’s called cooking the books and buryin your head in the sand and hoping you don’t get caught
Because the fed is buying mortgage backed securities and the banks are simply clearing their balance sheets. No more loans are being made. So the money is simply vanishing—while the Fed is becoming one big landlord.
As the dollar weakens, our products get sold and shipped overseas. We have to compete with foreign money. That is where the inflation will come from, regardless of the employment situation. Agricultural commodities most affected. $10.00 loaves of bread coming....
Yea, I agree. That makes Williams prediction shocking to me. I have no doubt he knows of that which he speaks, in both instances. To me, hyperinflation is the same as a currency collapse. In every single case in history, one leads to the other once faith in the currency is lost.
This time, we will see numerous currencies collapse, IMO. Economic dislocation is coming; some nonessentials will remain linked to the dollar while essentials not produced here, and even some that are will continue to become more expensive.
Speaking of 100% plus inflation, check out the recent increase in the price of farmland! The last time we had farmland increase this much was back in the seventies, not long after Nixon took us off the gold standard.
Gold: 200%, gasoline: 200%, Oil 300%, farmland 400%; the beginning results of QE and of artificially keeping interest rates at zero.
The reason for ZIRP, we cant afford to pay the interest on the government debt now, much less if interest rates are allowed to adjust via the market demand. Savers and investors are being hit with a MASSIVE stealth tax from practically zero return for the use of their capital.
Russia and China are working hard to destroy the dollar as the worlds currency. Heck, even Brazil is not happy about accepting the dollar in return for their goods. The Arabs are now accepting currencies other than the dollar for their oil. This hasnt happened since Nixon. Gold is making inroads as a medium of exchange between countries.
Things happen slowly then all at once!
With the state of housing one of collapse, I don’t really see how farmland prices are rising. What is your source for that statement?
I am not familiar with the term ZIRP.
Nor do I believe Russia and/or China has any interest in destroying the dollar since that would wreck the latter’s export policy.
The Arabs are trying to make the Euro the currency to buy oil but, given the problems within the Euro block I do not believe that will be a long term solution. Nor will they accept any other currency than the dollar or Euro.
Gold is in no way becoming money again.
Points you all made are valid. But that still does not explain why there is no hyper-inflation....regardless of all the over spending by gov’t, printing Trillions of excess dollars, and borrowing to spend.
I learned the real reason why there is no hyper-inflation from a German economist going way back, on Louis Rukeyser TV show. No one believed this economist when he declared there will be no hyper-inflation as far as the eye can see. Note that we had just come out of the double digit inflation of Carter era when I hear his forecast.
And here is the reason...inflation requires two events, excess currency floating around and under-supply of goods to soak up the currency. For the last 25 years there has been a phenomenal increase in manufacturing capacity in non-western countries. China, India, Brazil, S. Africa have increased manufacturing capacity by orders of magnitude during this period. Right now, as we speak, manufacturing is operating UNDER-capacity in those countries. They are supplying all the goods and services necessary to soak up all excess currencies being printed. Until demand for goods and services exceeds the ability to supply, it is impossible to have hyper-inflation. Only commodities in short supply such as oil and food will see inflation. But not most other manufactured goods.
You can build more houses. Much harder to manufacture more farmland.
These two episodes are almost always ignored by those fervently calling for a gold standard.
Land prices and housing starts are generally closely linked.
This contention (rising farm land prices) does not appear believable.
Many people falsely believe that the Gold Standard (which rarely remained in effect when war broke out) rules out inflation.
As you note the importation of the huge gold hoards from the New World utterly ruined the Spanish economy which could not adjust production to the massive increase in its money supply. Not only did it drive the price of land through the roof but it set off a massive wave of inflation which lasted for a century.
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