Our Annual Predictions For 2010. Good News And Bad News (Kitco)

Kitco ^ | 11-1-2009 | Roger Wiegard

[blam]

Our Annual Predictions For 2010. Good News And Bad News (Kitco)

Roger Wiegard
Dec 1 2009 1:54PM

Will 2010 be a 1930 or, comparable to 1937? Is it different this time? When one nation state of a formerly high productive stature destroys itself with inflation, the untouched others can soften the blow and in time bail out the fallen one. This was Germany’s fate in the 1920’s. In our current instance, most all of the world’s economies are on their knees with some hurting worse than others. Who can help with recovery this time? There is no one. It will not be China as some suppose as China shall suffer the same systemic collapse as the U.S, and all of Europe, Russia, and South America. China’s neighbors Japan, Taiwan, Korea, India, Indonesia and others will join the fallen.

The interwoven complexities of international trade and finance have caught them in all in a spider’s web of systemic collapse. Those who can shall attempt a massive inflationary rescue. While it might appear to work for a few months, eventually all implodes. Please note the following from John Pugsley’s “Common Sense Viewpoint” as printed in “Golden Insights” by James U. Blanchard III 1997.

“Inflation will destroy debt. The end answer to all argument (inflation versus deflation) rests in the Federal Reserve and government. Both are absolutely committed to preventing a financial collapse or deflation. As long as they are willing to print dollars to support any failing creditors, the cycle will go on. What most deflationists fail to consider is that inflation destroys debt.”

“Creditors win through inflation and lenders lose. The deflationists do not see that if inflation of the money supply continues, which it will, there needs to be a deflation. All the debt in the world can be wiped out just by creating purchasing power…and that’s exactly what is happening…the debt problems will be resolved, but they will not be resolved by debt liquidation through bankruptcy and collapse. They will be resolved through debt liquidation via the creation of money. We are in for the greatest wave of inflation in the history of the world. You had better not be on the wrong side of the dollar.” -John Pugsley “Common Sense Viewpoint.”

We agree with Mr. Pugsley but, this was written years ago. We would suggest that this time with most formerly productive nations becoming victims of both inflation-hyperinflation and systemic collapse; the ending could be much worse than supposed. We forecast inflation first then hyper-inflation some time down the road.

What happens between here and there? While in our view, our forecast episodic adventure takes at least 2-3 years but, no one knows for certain. We forecast 2010 to be one of the very worst years of Greater Depression II; the year 2010 being the second cycle of several depressionary phases. The fall of Lehman and a surrounding crash was only Phase One. Before Phase Two terrorizes global markets, we suggest a short recovery arrives first.

[snip]

Kitco

[EyeGuy]

Interesting predictions for the upcoming year, but the LONG TERM gross overspending by the irresponsible governments of western nations, and lately the United States in particular are, in my opinion, of much greater import than any drop-in-the-bucket annual fiscal policy adjustments.

This insanity had to come home to roost at some point. Obama and his band of clueless Ivy League fools, have simply pushed the fiscal idiocy pedal to the metal.

[Cletus.D.Yokel]

How’d their predictions for 2009 shape out?

[bolobaby]

I agree with most of the predictions here - and have been saying the same thing to friends and cow orkers for some time - but Kitco would serve themselves better by backing these predictions with hardcore analysis rather than just spouting them with no backing.

There’s a little analysis in there, but not enough for my tastes.

[FromLori]

This an excellent article posted by Blam .

Ping list I thought these articles were interesting

The recurring gold “bubble”

http://www.stockhouse.com/Columnists/2009/Dec/2/Why-the-U-S—Fed-is-not-really-inflating-away-the-

http://themessthatgreenspanmade.blogspot.com/2009/12/recurring-gold-bubble.html

Red Ink: Not an Illusion

http://www.financialarmageddon.com/2009/12/red-ink-not-an-illusion.html

17 million Americans have no bank account
And another 18% that do still use non-traditional banking services like pawn shops and payday lenders, according to FDIC survey.

http://money.cnn.com/2009/12/02/news/economy/fdic_survey/index.htm

Charting the great world trade collapse

http://www.zerohedge.com/article/charting-great-world-trade-collapse

Bailout hater goes over to the dark side

http://www.salon.com/technology/how_the_world_works/2009/11/30/too_big_to_fail_critic_joins_citigroup/index.html

and the dark side says

http://www.bloomberg.com/apps/news?pid=20601087&sid=aShE5EGhFq90&pos=4

Why Did Bank of America Pay Back the Money?

http://baselinescenario.com/2009/12/04/why-did-bank-of-america-pay-back-the-money/

http://financemymoney.com/the-corporatocracy-a-new-economic-system-for-the-connected-banking-sector-and-political-elites-providing-the-new-serfdom-massive-debt-servitude/

[blam]

Our Current Economic Illusions

[blam]

This is an interesting chart.

[Trailerpark Badass]

for later

[FromLori]

Yes thank you. Check out this article... http://online.wsj.com/article/SB10001424052748704342404574575761660481996.html?mod=WSJ_hpp_LEFTTopStories

[FromLori]

Sorry lol here it is linkable

http://online.wsj.com/article/SB10001424052748704342404574575761660481996.html?mod=WSJ_hpp_LEFTTopStories

[blam]

Note to self:

Buy more silver Monday. (ahem)

[TigerLikesRooster]

Ping!

[Freedom_Is_Not_Free]

No time to read now...

[demsux]

“Inflation will destroy debt. The end answer to all argument (inflation versus deflation) rests in the Federal Reserve and government. Both are absolutely committed to preventing a financial collapse or deflation. As long as they are willing to print dollars to support any failing creditors, the cycle will go on. What most deflationists fail to consider is that inflation destroys debt.”

“Creditors win through inflation and lenders lose. The deflationists do not see that if inflation of the money supply continues, which it will, there needs to be a deflation. All the debt in the world can be wiped out just by creating purchasing power…and that’s exactly what is happening…the debt problems will be resolved, but they will not be resolved by debt liquidation through bankruptcy and collapse. They will be resolved through debt liquidation via the creation of money. We are in for the greatest wave of inflation in the history of the world. You had better not be on the wrong side of the dollar.” -John Pugsley “Common Sense Viewpoint.”

That is the money quote.

[blam]

"That is the money quote."

There is no-one with the political strength (even if they have the will) to not inflate the debt away. It's coming.

[demsux]

It’s gonna be interesting to see how China responds...with all of our debt that they hold, they have a VERY real interest in our policies going forward.

[Diana in Wisconsin]

Always buy on Monday...sell what you need to on Thursday or Friday. ;)

I’m going to have a very Merry Christmas. Going to cash in on Friday, next...just so YOU can buy more on the cheap come Monday. ;)

[danielmryan]

Thanks for the second recurrent-bubble link. It gave me something to think about, and a blog I hadn't stumbled upon. Much appreciated.

[SkyPilot]

Creditors win through inflation and lenders lose

How can that be if you already have a loan, but what you owe is worth less in real money because of hyper-flation?

I am guessing it is only good if salaries and wages have to be exponentially increased in order to keep up with inflation.

So, instead of owing $50,000 on that car, the dollar becomes worthless and I owe a fraction of that in real money.

Yes?

[blam]

"So, instead of owing $50,000 on that car, the dollar becomes worthless and I owe a fraction of that in real money."

Yes.

Your wages would go up substancially but not your payments.