Posted on 10/14/2010 11:14:20 AM PDT by blam
America's Currency Crisis Is Now Underway
November 14,2010
According to minutes that were just released this week from the Federal Reserve's meeting on September 21st, the Federal Reserve is now trying to figure out ways to boost inflation expectations. The mainstream media is reporting that the Federal Reserve wants to publicly declare their intention to seek a higher inflation rate so that Americans are encouraged to spend more before their money is worth less. Unfortunately, what the mainstream media fails to realize is, not only will their money soon be worth less but it will literally become worthless.
If the Federal Reserve doesn't immediately raise interest rates dramatically, there is serious risk of the current "meltup" turning into hyperinflation before the end of 2012. The Federal Reserve's words can no longer control the present situation. They are saying they want inflation so that when massive inflation does arrive, it appears as though they still have control. With gold up 19% and silver up 38% since NIA's July 28th article "Gold and Silver Capitulation is Near" in which we said, "the big move to the upside (for gold and silver) is right around the corner", it is obvious that the Federal Reserve has completely lost control of inflation and a major currency crisis is already underway.
The world is flooded with excess liquidity of U.S. dollars. Up until now, Americans have been blessed by the fact that the world has been hoarding these dollars, believing they are a safe haven during these uncertain economic times. The world's confidence in the U.S. dollar and strong demand for U.S. treasuries despite the need for the Federal Reserve to monetize our $13.6 trillion national debt will one day be looked back at as the most mysterious paradox of our generation.
The average American today is pouring money into U.S. treasuries. They got crushed when the dot-com bubble collapsed, they got decimated when the Real Estate bubble burst, and now they are loading into dollar-denominated assets. Simultaneously, the Federal Reserve is trying to destroy the purchasing power of the U.S. dollar. The only thing the Federal Reserve should be focused on today is preventing hyperinflation, because hyperinflation always leads to complete societal collapses.
Almost all American investment advisors tell their clients today that government bonds are the "safest investments there are" because they "are backed by the full faith and credit of the government". It is very common for investment advisors to recommend to their clients that they put 25% or more of their assets into U.S. government bonds and keep another 25% of their assets in U.S. dollar cash. Yet, there are almost no investment advisors in existence who recommend to their clients that they put more than 5% of their assets into gold.
Investors who only put 5% of their assets into gold might find that they only retain 5% of their purchasing power in the future. Neither NIA nor its co-founders are investment advisors, but our commentary has consistently highlighted our beliefs that there is no such thing as owning too much gold. NIA believes that individual investors' portfolios should be 100% in assets that will retain or increase in purchasing power during hyperinflation. The only question today that smart investors should be asking themselves is what percentages do I put into physical gold, physical silver, mining stocks, agricultural commodities, etc.
Obama continues to state he will not raise taxes for those earning less than $200,000, yet he is doing absolutely nothing to reduce government spending. With China and Japan getting ready to pull the plug on the U.S. dollar, future U.S. deficit spending will have to be paid for by outright money printing. The price inflation that is ahead as a result of monetary inflation is the absolute worst thing that can happen to middle class Americans. Obama's inflation won't hurt the wealthy as much because the wealthy, if they become educated and act quick enough, can still preserve the purchasing power of their wealth by buying gold and silver.
Obama's plan to reduce our budget deficit from $1.6 trillion today down to $752 billion in 2015 is contingent on 5.58% annual GDP growth and interest rates on our public debt of only 4.1%. The only way we will see 5.58% annual GDP growth is with massive inflation and when inflation spirals out of control, so will interest rates. There is no doubt that our nation's budget deficit come 2015 will be substantially higher than it is today, if our nation survives until then.
If you would like your friends and family members to be the first to see NIA's new upcoming documentary about America's societal collapse, please tell them to become a member of NIA for free.
“The mainstream media is reporting that the Federal Reserve wants to publicly declare their intention to seek a higher inflation rate so that Americans are encouraged to spend more before their money is worth less.”
Yes, in case you were still wondering, the people in charge are morons.
Federal Reserve wants to publicly declare their intention to seek a higher inflation rate so that Americans are encouraged to spend more before their money is worth less.
What planet am I on?
The people in charge are not morons - they are evil.
Americans (sheep) who watch TV are the morons.
“What planet am I on?”
Planet Honesty, apparently, as for once the Feds tell us what their plan has been since 1913.
“The people in charge are not morons - they are evil.”
Evil morons, I’d say. Because even if their plan works, we will be flirting with hyperinflation, which I don’t need to explain is a very bad thing for the economy and by extension the government. Then again, what the hell am I saying? Leviathan loves crises. Nevermind.
What’s funny is that they don’t seem to have the power to do it. Since money is LOANED into existence, and nobody is loaning, and plenty are defaulting (causing money to LITERALLY disappear, but the trillions), they seem to be unable to create money as fast as it is dissapearing.
They’ll eventually catch up and pass it though, but I doubt it will be any time real soon.
That was an important piece of news last week that got very little attention.
It's a slow motion currency collapse. Let's see if they cut a short term deal with the Chinese that'll make it much worse in the long run...
Another aspect of this worth noting is that this also helps those banks sitting on billions of dollars in foreclosed properties slowly get their balance sheets back in order.
I don't know if these people are morons or evil, but there might actually be a sound basis for how this whole financial mess is being unwound.
Yes, 'that's the ticket'.
Then, they'd be able to get an equity loan and begin the spending all over again.
I’ve said since 2006 that there are basically two ways out of this: A depression, or monetizing the debt resulting in severe inflation or maybe hyper-inflation. But if wages don’t go up then the latter results in a significantly lower standard of living.
“It’s a slow motion currency collapse.”
Reminds me of how during the ‘08 crisis people used as a metaphor an airliner bound to crash, which TARP, etc., were intended to guide carefully into the Hudson like Sully Sullenberger (not that he existed in the national consciousness at the time; I honestly can’t remember). What total arrogance to think they can de-disaster a disaster.
Funny thing about inflation: when it gets bad people tend to call it “runaway inflation”; in other words, uncontrolably inflation. No one knows when or how (except in the most general manner), exactly, this happens. But at some point, people realize their money is soon going to be worthless, and in a desperate attempt to spend it before its value disappears they cause prices to multiply themselves many times more and in shorter a period of time than sanity can handle.
Tempting that danger by freaking people into spending only so much, but not too much, is foolhardy. Because you’ll never know exactly how panicked they’ll get, nor how much panicked spending is safe anyway.
“Tempting that danger by freaking people into spending only so much, but not too much, is foolhardy. Because you’ll never know exactly how panicked they’ll get, nor how much panicked spending is safe anyway.”
By analogy, given the Fed’s competency, it’s like setting a controlled fire in a forrest without knowing what’s flammable, what’s nearby the forrest, how fire works, or how to put it out.
I'm 100% in agreement...one of those two will occur, neither will be pretty.
I'm 100% in agreement...one of those two will occur, neither will be pretty.
“there might actually be a sound basis for how this whole financial mess is being unwound”
The mess is not being unwound. If anything, they’re attempting to wind it up further. Inflating currency could only accomplish what happened in the first place. It does nothing to solve the fundamental problem: namely, that people built more houses than people could pay for.
The value of the home goes up. But who do you sell it to?
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