February 17, 2009
– Comments (4)
We are in deflation, we can go into hyper or high inflation later. USSR had about 10 years of deflation before the th currency collpased and they defaulted on their debt.
Efforts to avoid a deflationary depression will probably produce the opposite — a nasty bout of inflation, says John Williams of Shadow Government Statistics, who advises hoarding gold and even Scotch to barter. Alistair Barr reports.
On 11 Feb 09, Good Peter Schiff in a game show style format. Talks about Obama, Bernanke, Goldman Sachs, China and gold.
John Williams of Shadow Government Statistics, who advises hoarding gold and even Scotch to barter.
When we have hyperinflation, the nation will very likely be much poorer. Who can buy gold then?
I have respected Abitare a lot. My impression is that Abitare (and Marc Faber) thinks that gold is very expensive. If so, it would make more sense buying copper, zinc, rice, oil and flour thorugh RJA, RJI etc. Maybe I lost something here?
I am sorry to say these guys are dead wrong about the dollar...Gold and Silver may go thru the roof.......but the dollar is no spoof........it is getting stronger and climbing higher.....
Why wait? I'm willing to jump the gun and start bartering for scotch right now. If you feel tired during tax season just send a bottle right this way...
You're being short-sighted. For someone who has been as diligent as you have been in updating how close our financial system has been to the brink of collapse I find it hard to understand what value money has when the entire money banking system is practically insolvent.
I think the risk of hyperinflation is very low. No matter what scenarios I envision I don't believe it to be necessary for the U.S. government to monetize over $100 trillion of debts which is what would be needed to enter into a hyperinflationary stage. The government controls the issues of money so nationalization and greater cooperation between the OECD nations will become a growing choice(this has already began).
It's different for an individual nation to experience years of stagnant growth, but no one wants to repeat the years of global stagnation seen during the Great Depression era. There needs to be a re-structuring of the global financial system. A re-ordering if you will, or even a new world order.
Be prepared for more doomsayers from different religions and 2012 Mayan calendar nuts.
I do think that relative deflation in asset classes may continue for some time but absolute deflation in the price of goods and services will ease later this year and will be a thing of the past by 2010. We'll see the return of greater than +5% annualized increases in the price of many goods and services.
The next legislation will probably expand the amount of money given to states and local municipalities. I'm sure we'll be giving more money to stimulate various industries (automakers, financial, healthcare, etc.) and there will be a need for either tax reform or another roundaboute of tax cuts and stimulus.
Today, the yield of all official debt is being supported by foreign purchases(mostly China) but there is a global recession and this cannot continue to move higher in a parabolic fashion.
Eventual monetization of our debts is almost inevitable. I don't know to what extent it will be, but even the Federal Reserve has said that it will outright buy Treasuries in the open market to maintain low interest rates on official debt.
We just see things a little differently right now...it is not really a big deal....when the time is right....I will likely be pounding Inflation....just not now....and not for a while.