Use access key #2 to skip to page content.

Shadowstats' John Williams: Prepare For The Hyperinflationary Great Depression

Recs

20

December 16, 2009 – Comments (10)

MY COMMENT: Faber and now John Williams are making the hyper-inflation call.  You should read John Williams report reguardless of your belief/position. 

Zerohedge has the story here:

http://www.zerohedge.com/article/shadowstats-john-williams-prepare-hyperinflationary-great-depression

Shadowstats' John Williams: Prepare For The Hyperinflationary Great Depression Submitted by Tyler Durden on 12/14/2009 14:32 -0500

John Williams, who runs the popular counter government data manipulation site Shadowstats, has thrown down the gauntlet to deflationists, and in an extensive report concludes that the probability of a hyperinflationary episode in America over the next year has reached critical levels. While the debate between deflationists and (hyper)inflationists has been a long and painful one, numerous events set off in motion by the Bernanke Fed (as a direct legacy of the Greenspan multi-decade period of cheap and boundless credit) may have well cast America as the unwilling protagonist in the sequel of the failed monetary policy economic experiment better known as Zimbabwe.

Williams does not mince his words:

The U.S. economic and systemic solvency crises of the last two years are just precursors to a Great Collapse: a hyperinflationary great depression. Such will reflect a complete collapse in the purchasing power of the U.S. dollar, a collapse in the normal stream of U.S. commercial and economic activity, a collapse in the U.S. financial system as we know it, and a likely realignment of the U.S. political environment. The current U.S. financial markets, financial system and economy remain highly unstable and vulnerable to unexpected shocks. The Federal Reserve is dedicated to preventing deflation, to debasing the U.S. dollar. The results of those efforts are being seen in tentative selling pressures against the U.S. currency and in the rallying price of gold.

And even as Bernanke continues existing in a factless vacuum where he sees no asset bubbles, Williams takes aim at the one party almost exclusively responsible for the economic carnage that will soon transpire:

The crises have been generated out of and are centered on the United States financial system, triggered by the collapse of debt excesses actively encouraged by the Greenspan Federal Reserve. Recognizing that the U.S. economy was sagging under the weight of structural changes created by government trade, regulatory and social policies -- policies that limited real consumer income growth -- Mr. Greenspan played along with the political and banking systems. He made policy decisions to steal economic activity from the future, fueling economic growth of the last decade largely through debt expansion.


The Greenspan Fed pushed for ever-greater systemic leverage, including the happy acceptance of new financial products, which included instruments of mis-packaged lending risks, designed for consumption by global entities that openly did not understand the nature of the risks being taken. Complicit in this broad malfeasance was the U.S. government, including both major political parties in successive Administrations and Congresses.


As with consumers, the federal government could not make ends meet while appeasing that portion of the electorate that could be kept docile by ever-expanding government programs and increasing government spending. The solution was ever-expanding federal debt and deficits.


Purportedly, it was Arthur Burns, Fed Chairman under Richard Nixon, who first offered the advice that helped to guide Alan Greenspan and a number of Administrations. The gist of the wisdom imparted was that if you ran into problems, you could ignore the budget deficit and the dollar. Ignoring them did not matter, because doing so would not cost you any votes.


Back in 2005, I raised the issue of a then-inevitable U.S. hyperinflation with an advisor to both the Bush Administration and Fed Chairman Greenspan. I was told simply that "It's too far into the future to worry about."


Indeed, pushing the big problems into the future appears to have been the working strategy for both the Fed and recent Administrations. Yet, the U.S. dollar and the budget deficit do matter, and the future is at hand. The day of ultimate financial reckoning has arrived, and it is playing out.

The rest is here:

http://www.zerohedge.com/article/shadowstats-john-williams-prepare-hyperinflationary-great-depression

 

 

10 Comments – Post Your Own

#1) On December 16, 2009 at 1:20 AM, KamranatUCLA (29.72) wrote:

I believe inflation is a natural thing to keep things in balance. Once I asked my college professor: what are the roots of inflation?

He said: unneccessary costs like advertisment cost.

It made some sense to me. Inflation happens when we spend too much on things with no real value. I have always hated companies who don't need commercials yet spend millions on commercials that no one cares for. Some advertisements are soooo stupid it's like making a commericial for tap water or air.

Inflation make an economy instable but growing up in a country with inflation (in Iran during the revolution and war), people actually buy things that they need rather sooner, because they know the prices go up.

So inflation will make our economy more instable which gives the impression of caos and long term our country wouldn't look good but short term it will initiate more buying and selling.

I think gold is overpriced but I like silver and I think silver is a good bet against inflation.

Report this comment
#2) On December 16, 2009 at 1:20 AM, uclayoda87 (29.35) wrote:

2010 should be an interesting year, with the elections fueling more spending and the unemployment picture unlikely to improve, the mirage in this financial desert will disappear, revealing a wasteland of false hopes.

Report this comment
#3) On December 16, 2009 at 1:33 AM, throwerw (29.40) wrote:

kamran - inflation is expansion of the money supply, your college professor makes no sense.

Report this comment
#4) On December 16, 2009 at 9:25 AM, JakilaTheHun (99.93) wrote:

The odds of Zimbabwe-style hyperinflation:  1,000,000,000,000 to 1

Which isn't to say that all the printing isn't going to create some problems.  Just that I'm sick of morons comparing the US to Zimbabwe.  The two aren't even remotely analogous.  Even Weimar-Germany didn't experience "Zimbabwe-style hyperinflation" and the US hasn't even come close to Weimar Germany yet.  

If inflation hits 10%+, expect Bernanke to raise interest rates.  The Feds will put the clamps down and move us into leg #2 of the Great Recession. 

"Tyler Durden" is a criminal, demogogue, and extremely lacking in originality.  If you followed Tyler's advice on REITs in March, you'd be bankrupt right now.   Report this comment
#5) On December 16, 2009 at 9:49 AM, catoismymotor (< 20) wrote:

+1 Rec for Jakila's contribution:

...I'm sick of morons comparing the US to Zimbabwe.

Amen!

Report this comment
#6) On December 16, 2009 at 11:06 AM, jesusfreakinco (29.02) wrote:

Highly suggest listening to John Williams' interview at:

http://kingworldnews.com/kingworldnews/Broadcast/Entries/2009/12/4_John_Williams.html

He predicts hyperinflation could start any day, but is likely within the next 1 to 3 years.

JFC

Report this comment
#7) On December 16, 2009 at 11:21 AM, PeteysTired (< 20) wrote:

If inflation hits 10%+, expect Bernanke to raise interest rates.  The Feds will put the clamps down and move us into leg #2 of the Great Recession. 

Why would they raise interest rates?

Report this comment
#8) On December 16, 2009 at 1:31 PM, davejh23 (< 20) wrote:

"If inflation hits 10%+, expect Bernanke to raise interest rates.  The Feds will put the clamps down and move us into leg #2 of the Great Recession."

I think it will depend on how the gov't responds to our budget problems over the next decade+.  Including unfunded obligations, US debt to GDP is 500%+ and growing.  People argue that Japan's debt to GDP is far worse, so we should be okay...I don't buy it.  Our SS and Medicare obligations are just getting ready to balloon.  If the gov't just prints money to cover these obligations, we're in trouble.  If they slash benefits and balance the budget, we'll have 10's of millions of elderly citizens added to food stamp and other welfare programs.  I agree that the Fed will raise rates if we start to see high inflation, but then we'll also see our economy for what it really is...take away trillion dollar deficits and we already would have seen massive declines in GDP.  I believe the US will lose the ability to borrow to fund Federal spending before we work through existing problems, and at that point, we will see high inflation whether the economy is growing or not...sharp rate hikes by the Fed won't help if the Fed is printing trillions that is going directly into the economy...

Report this comment
#9) On December 16, 2009 at 5:17 PM, alexxlea (44.74) wrote:

I hate when people compare us to Japan. There's no way our situations are remotely similar. Japan is doing fine. This is yet another "be scared about what you don't know" moronic propoganda that we like spreading about other countries, in the hopes that our failed systems seem more appealing to digest.

 

My friends sister was in Japan and had to visit the ER. Well she didn't have insurance, and was informed that it would cost a lot of money. She was told to contact the embassy, but that wouldn't matter because she didn't have insurance here either. So she was getting frustrated with the whole matter and just asked straight up how much the visit would cost.

 They told her she wouldn't want to have to pay it, but if it came down to it, it would cost about one hundred dollars for the whole experience. Needless to say she just paid up and was put on an iv etc.

 

 

See how much one-hundred dollars cash gets you around your local er...

sure...

Also, not stories, but people that I know personally, being bankrupt and tens of thousands of dollars in debt from hospital visits, well, I'm sorry, but our country just sucks man. We don't value human life as much as other "developed" nations. It's an insult to the term that we apply it to our own nation. Whatever happened to "enlightened" citizens man... 

Report this comment
#10) On December 17, 2009 at 1:55 AM, abitare (49.76) wrote:

ALCON, Thank you for the replies.
 KamranatUCLA (29.48) wroteI believe inflation is a natural thing to keep things in balance. Once I asked my college professor: what are the roots of inflation?

He said: unneccessary costs like advertisment cost.

LOL! Your professor is an IDIOT! Inflation is theft. It is the debasement of a currency by printing.  No go to youtube and watch Money is debt, please before you make any more such statements.

Here you go:

uclayoda87 (30.55) wrote:

2010 should be an interesting year, with the elections fueling more spending and the unemployment picture unlikely to improve, the mirage in this financial desert will disappear, revealing a wasteland of false hopes.

Yep


throwerw (99.86) wrote:

kamran - inflation is expansion of the money supply, your college professor makes no sense.

YEP 

JakilaTheHun (99.94) wrote:

The odds of Zimbabwe-style hyperinflation:  1,000,000,000,000 to 1

Which isn't to say that all the printing isn't going to create some problems.  Just that I'm sick of morons comparing the US to Zimbabwe.  The two aren't even remotely analogous.  Even Weimar-Germany didn't experience "Zimbabwe-style hyperinflation" and the US hasn't even come close to Weimar Germany yet.  

 No idea, how this will pan out...Argentina? Japan? Hungary? France? there has been 3000 currencieshave failed.

If inflation hits 10%+, expect Bernanke to raise interest rates.  The Feds will put the clamps down and move us into leg #2 of the Great Recession. 

Yes, I agree. The FED will raise rates to try and prevent hyper-inflation. Unemployment will hit new records. 

"Tyler Durden" is a criminal, demogogue, and extremely lacking in originality.   Disagree, I like his blog and I am not alone....
 If you followed Tyler's advice on REITs in March, you'd be bankrupt right now.    Cannot confirm  jesusfreakinco (30.58) wrote:

Highly suggest listening to John Williams' interview at:

 Good link and good pass.

PeteysTired (36.88) wrote:

Why would they raise interest rates?

The private cartel the FED will save try and save the dollar and their cartel.  Ref Volkner in 1980s.


davejh23 (< 20) wrote: Good reply here...

 I believe the US will lose the ability to borrow to fund Federal spending before we work through existing problems, and at that point, we will see high inflation whether the economy is growing or not...sharp rate hikes by the Fed won't help if the Fed is printing trillions that is going directly into the economy...

The FED is already monetizing debt.
  alexxlea (84.25) wrote:

I hate when people compare us to Japan.

Mish Shedlock has an outstanding write up you should read on the US vs Japan. Google MIsh and Japan deflation

Report this comment

Featured Broker Partners


Advertisement