Skip to comments.U.S. Dollar Hyperinflation by 2014 Says John Williams
Posted on 10/25/2012 6:10:33 PM PDT by blam
U.S. Dollar Hyperinflation by 2014 Says John Williams
Economics / HyperInflation
Oct 25, 2012 - 03:06 AM
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.
Now, there is talk the Fed might increase the money printing. Williams charges, The Feds primary concern is to keep the banking system afloat, and theyre not doing so well with that. Williams contends there is 12 trillion in liquid dollar assets held outside the U.S. Williams says it is only a matter of time before all the Fed money printing will trigger a sell-off . . . and that will provide the early start of the hyperinflation. You think the U.S. is better off today than it was in the last meltdown? Not according to Williams, he thinks, . . . things have gotten a lot worse. Join Greg Hunter as he goes One-on-One with John Williams of Shadowstats.com.
(Click here to see the interview)
Scary, and true. Anyone who shops in the grocery store knows the dollar is tanking. This guy also knows that the government cost of living calc is a sham and he has recalculated cost of living based on the way they did it pre-1990’s. And it’s not pretty. As soon as people realize this is true then everyone is going to empty their IRA’s and the dollar is dead.
The sad part is that neither Obama nor Romney talk about important issues like this. Issues that are vitally important to our existance as a nation.
If Romney wins, even before he is inaugurated, he needs t sit down with Bernanke and lay down some rules.
There is another alternative, and one that should not be dismissed outright. This is for the United States to renounce its national debt.
After the huffing and puffing have finished, the reasons for *not* renouncing the US national debt amounts to three things.
1) We’ve never done it before and it would ruin out credit rating.
2) It would make our creditors like China and the sovereign wealth funds mad at us.
3) It would ruin our exports, which would have to become commodity swaps.
Okay, we are how many trillions of dollars in the red, and projecting to go how many trillions more in debt? If this were your spouse, the *first* thing you would do is cut up their credit cards. Then we tell the spendthrift to balance their budget, because there is no more credit for them.
Second, the US creditors did not loan us their base capital. They loaned us the ridiculous profits they made from selling stuff in our markets. So while they won’t *like* losing their profits, it is not going to kill them.
Third, a lot of our exports are essential to other countries, and so they will most certainly give us stuff in return for them. Swaps with no debit and no credit.
All told, I can imagine the biggest complainers to renouncing our national debt will be politicians who *like* deficit spending. They will bitterly oppose having the faucet turned off. Well, tough.
However, after a brief international hubbub, with internationalists trying to foist an international currency on us, fat chance, the world will again become extremely dependent on the dollar, because in the final analysis, no other currency comes anywhere near its reliability.
It makes me laugh when some suggest that the Chinese currency could replace the dollar. Yeah, good luck with that, and your new Chinese overlords.
You ONLY have a deficit IF you spend more than you take in..
STOP SPENDING as much and the deficit retreats..
STOP SPENDING a lot and the deficit ceases to exist.. Duuuuuugh!...
I’ve decided today that I may never in good conscience buy walnuts again....just ridiculously high....
the leftists for years have encouraged “jubilee”....for other countries....not ours of course....we just got to suck it up....
Look at Iceland. Rather than do a stimulus package and give money to the banks, they actually forgave all mortgage debt greater than 110% of the value of the home. Then they threw the bankers in jail. Guess what? Their economy corrected itself and they are one of the only economies that is actually GROWING now. They don’t even want to join the EU anymore since they are doing so well.
However, all of these government bailouts by the govern,ent have stagnated the economy... just like every government bailout before it. If the government would have let things crash four years ago, then our economy would be booming by now... just like Iceland.
Shelled pecans at Sam's are $8.00 a pound.
They're farmed around here but also grow 'wild' and the last few years I've supplied my needs by picking them up from 'volunteer trees' on the road right-of-way.
"The validity of the public debt of the United States, authorized by law . . . shall not be questioned.
“However, all of these government bailouts by the govern,ent have stagnated the economy... just like every government bailout before it. If the government would have let things crash four years ago, then our economy would be booming by now... just like Iceland.”
I agree !!!!
But then BO couldn’t give our money as kickbacks to all his supporters.
A lady friend of mine has no money problems and she said she picked up a can of nuts and put them down, that she wasn't spending that much on nuts.
I buy them occasionally, but buy grocery store brand, but they are still too high. I don't think canned nuts are going to keep being on the shelf. I think companies will stop production of them. There goes all the nut growers and people who work in that industry.
I am very old and remember when I was young, nuts were plentiful everywhere and everyone had as many as they wanted. They were almost poor people's food as they were so plentiful. Now, I think nuts are going to go away. People have to use that money for more substantial food. When I buy them, it crosses my mind maybe I should buy something I need more. I have the money, but i feel like I am wasting it paying that much for nuts.
As our economy dies, I think all those grocery aisles with so much on them are going away. I can see grocery stores in the not distant future, selling only staples - flour, sugar, salt, dry beans, milk, maybe some preserves, a little hard candy - what does that sound like? Remember western movies set in old settler times - the “General Store”? What did they have - what I just listed is what they had.
Remember it was basics including some hardware supplies? I think we are on our way to that. When we can afford to buy only basics, everything else will stop being there and we enter the new dark age. I think this is realistic. Learn to bake bread from the basics if you want bread or eat tortillas the rest of your life.
All this resulting from nuts too high to buy....
The people of Iceland showed real spine. They are obviously a cohesive, wise, community. When the crisis hit, the EU sent delegates to tell Iceland that they “had” to join the Euro, and that measures would be imposed on them to correct the economy. They just refused - and it has paid off. They have their own currency, and they did not try to rescue insolvent banks. Their own depositers were refunded - but not foreigners. People who make foreign investments take risks. Shareholders in banks also take risks, as they learnt in Iceland.
A good dose of bitter medicine, quickly swallowed, and onward to better day. Meanwhile, Portugal, Ireland and Greece still languish, and have to pay more and more to rescue speculative banks.
And it's not just the $16T that we would have to renounce. We'd also have to renounce a lot of entitlement money - SocSec, Medicare and so on to stop the need for deficit financing.
Renouncing the debt won't stop deficit financing as long as the Federal Reserve exists.
The only politically possible way that I see to renounce the debt is for the Federal Reserve to buy all the debt and then renounce it. That way nobody gets zeroed out, but all dollar holders take a big haircut. Any politically sensitive folks (China, Saudi Arabia, Goldman Sachs) will be warned and will be out of the dollar. Your pension fund won't be warned.
At that point, we will once again fail to fix the entitlement mess and it will start all over again.
I differ with my esteemed Fellow Freeper.
OK, Im an optimist, and I think we can turn this around.
I have been thinking about what Pres. Romney and a conservative Congress can do to FIX the country when they take power. Here are a few ideas:
1. The USA is BANKRUPT. Therefore, we need to declare CHAPTER 11 just like a corporation would. In this type of BK, debt holders get first priority. Note that Chapter 11 is most appropriate where the BK entity has ASSETS and expenses that can be cut. The USA has HUGE assets that no one is considering.
All contracts, promises, and ENTITLEMENTS are on the table.
Appoint an all-powerful National Bankruptcy Judge and National Bankruptcy Trustee Council that will dictate the changes and kill ALL the SACRED COWS! That way we only have to pass ONE BILL to make all of the painful changes.
2. Lay off 80-90% of all federal workers. Eliminate departments, agencies, and commissions. Examples include Dept. of Education, most of the Small Business Administration, most of the EPA, HUD, National Public Radio, National Endowment of the Arts, et al.
3. Privatize every function possible. Fire the union TSA and hire a contractor with a free hand to profile terrorists.
4. Sell off assets. SELL, dont lease, mineral rights offshore. Why the hell does the federal government have to own 50% of the land West of the Mississippi? Sell the BLM and most National Forests. Sell federal office buildings and lease back the ones truly needed. Sell off every technology that is not classified. Sell off dams and powerplants. Sell Amtrack.
All proceeds from asset sales must be used to retire federal debt. Get the national debt down to a fraction of the current $16T so that we can afford to pay market interest rates.
Also note that privatization of all BLM land, offshore mineral rights, etc. would cause a huge economic boom as resources and land are developed and sold.
5. Reduce all Congressional pensions to ZERO. Both the Republicans and Democrats bear responsibility for the mess they got us in. They can go work for a living. Cut civil service pensions to a minimum. Regardless of rank, pensions should be what the lowest civil servant gets. Raise the retirement age for federal employees.
6. Invalidate all federal union contracts and their right to represent federal workers.
7. Eliminate farm price supports, dairy cartels, etc. Let the free market drive down prices.
8. Obviously, eliminate earmarks, aid to cities and states, and other pork barrel spending.
9. Allow elderly people to have private HMO coverage or catastrophic insurance instead of Medicare.
10. Raise the retirement age for Social Security gradually. We are living longer, healthier lives.
11. SEND THE ILLEGALS HOME. No benefits for illegals.
12. CUT TAXES AND REGULATION TO RE-START ECONOMIC GROWTH
13. COLLECT ALL DEBTS OWED. Audit all foundations and non-profits to see if they are doing political activism not in their charters. If they are, freeze their assets and bill them for back taxes.
Investigate and PROSECUTE all the Wall Street/Bankster scam artists and SEIZE ALL OF THEIR ASSETS. (Rudy Giuliani for Attorney General!)
Audit the unions for illegal political contributions. Prosecute and SEIZE THEIR ASSSETS.
Just recovering the assets ripped off by white collar criminals could repay a good chunk of the national debt.
Ill think of a few more areas to cut later. How are the above for a start?
Okay, let’s start with the law of diminishing returns. That is, tackle the biggest problems, that will provide the best solutions, first.
To start with, there is the $17T national debt, and the perhaps $235T future “unfunded liabilities” that the government has promised to Medicare, Medicaid and Social Security. This dwarfs everything else.
Much of the debt is held by private sector, but about 40 percent is held by public entities, including parts of the government.
1. Federal Reserve and Intragovernmental Holdings $6.328T.
2. China about $1.2T.
3. Other Bond-Bill Investors/Savings Bonds $1.1T.
4. Japan $1.038T.
5. Pension Funds $842B.
6. Mutual Funds $653B.
7. State and Local Governments $500B.
8. United Kingdom $430B.
9. Depository Institutions $300B.
10. Insurance Companies $250B.
Now if you examine the US federal budget, it is clear where the money is going:
So the question becomes one of downgrading and eventually eliminating Medicare, Medicaid, and Social Security.
Thank you for your reasoned and well documented reply.
I do not think we will have to eliminate Social Security and Medicare. However, because of the demographics, I do think we need to change the age at which citizens can apply for those benefits. When SS was started in the 1930s, the average SS recipient had an expected remaining life span of 6 months. We live longer, much healthier lives now. I personally plan to work as long as possible.
80...it’s the new 65.
My point is that default is NOT inevitable. The USA has enough assets to sell to bring the debt down to a manageable level.
We get the side benefit of privatizing all of that land. If we sell the BLM and most national forest land, we can eliminate two agencies infested by environazis as a bonus.
There are severe, long term consequences of default. As you noted, there are numerous banks, insurance companies, etc. that would be bankrupted if the fedgov defaults.
There is a scheme to downgrade Social Security, and to do it in such a way as to neither stick it to anyone, nor to cost the government much to do so.
However, it is likely already too late to do so, because it is reliant on the Bush tax cuts. Here is the idea.
To start with, instead of offering just tax cuts, as such, make SS recipients a deal. If they need their SS money, fine, they can take their deserved check. However, if they have other sources of income, offer them a slightly *better* deal, in the form of a tax cut, if they do not take their SS check.
Then expand the idea to those still paying in to the SS system, that for every year they *don’t* pay into the system, they get the equivalent of that years’ SS payment plus an additional years’ payment put into a private retirement account. Again, if they choose to do so.
The final result for this would, in a few decades, reduce those paying into the SS system for benefits to just minimum wage employees with no other retirement, and people who are too overwhelmed by thinking about it to vie for the better deal.
This would be a SS system a tenth of the size it is today, and fully solvent.
Importantly, they could be a similar process to downgrade Medicare and Medicaid, but the best way to achieve that is likely to make them “block grant” programs for the states with fixed rules. And the feds could not enlarge upon, or coerce changes beyond these fixed rules unless the states agreed to the changes on their own.
Even the dims will admit that SS must be modified.
The USA is BANKRUPT. Therefore, we need to declare CHAPTER 11 just like a corporation would.