Dollar Sell-off and Hyperinflation by 2014 – John Williams

USA Watchdog ^ | 24 October, 2012 | Greg Hunter

[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, “There’s no way the consumer can fuel the economic recovery, and there is no way we’re 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.”

[central_va]

Another reason why inflation was so bad in the 70's was because unions pegged their wages to a fixed offset from minimum wage. So every increase in min wage pushed up union wages. Now since unions are basically dead, 7% participation and declining, there is no inflation pressure there.

[tdscpa]

You can build more houses. Much harder to manufacture more farmland.

[monocle]

Your point is illustrated in the gold mining camps during the California gold rush. Virtually everyone was looking for gold and very few were producing goods so that a single egg was selling for one dollar. A similar situation occurred in Spain when vast amounts of gold and silver were sent back to Spain at a time when the ability to produce fell far below demand.

These two episodes are almost always ignored by those fervently calling for a gold standard.

[arrogantsob]

Land prices and housing starts are generally closely linked.
This contention (rising farm land prices) does not appear believable.

[arrogantsob]

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.