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Gonzalo Lira's Redux On Signs Of An Upcoming Hyperinflation

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Submitted by Gonzalo Lira

Signs Hyperinflation Is Arriving

This post is gonna be short and sweet—and scary:
Back in late August, I argued that hyperinflation would be triggered by a run on Treasury bonds. I described how such a run might happen, and argued that if Treasuries were no longer considered safe, then commodities would become the store of value.

Such a run on commodities, I further argued, would inevitably lead to price increases and a rise in the Consumer Price Index, which would initially be interpreted by the Federal Reserve, the Federal government, as well as the commentariat, as a good thing: A sign that “the economy is recovering”, a sign that “normalcy” was returning.
I argued that—far from being “a sign of recovery”—rising CPI would be the sign that things were about to get ugly.
I concluded that, like the stagflation of ‘79, inflation would rise to the double digits relatively quickly. However, unlike in 1980, when Paul Volcker raised interest rates severely in order to halt inflation, in today’s weakened macro-economic environment, that remedy is simply not available to Ben Bernanke.
Therefore, I predicted that inflation would spiral out of control, and turn into hyperinflation of the U.S. dollar.
A lot of people claimed I was on drugs when I wrote this.
Now? Not so much.
In my initial argument, I was sure that there would come a moment when Treasury bond holders would realize that they are the New & Improved Toxic Asset—as everyone knows, there is no way the U.S. Federal government can pay the outstanding debt it has: It’s simply too big.
So I assumed that, when the market collectively realized this, there would be a panic in Treasuries. This panic, of course, would lead to the spike in commodities.
However, I am no longer certain if there will ever be such a panic in Treasuries. Backstop Benny has been so adroit at propping up Treasuries and keeping their yields low, the Stealth Monetization has been so effective, the TBTF banks’ arbitrage trade between the Fed’s liquidity windows and Treasury bond yields has been so lucrative, and the bond market itself is so aware that Bernanke will do anything to protect and backstop Treasuries, that I no longer think that there will necessarily be such a panic.
But that doesn’t mean that the second part of my thesis—commodities rising, which will trigger inflation, which will devolve into hyperinflation—will not occur.
In fact, it is occurring.
The two key commodities that have been rising as of late are oil and grains, specifically wheat, corn and livestock feed. The BLS report on Producer Price Index of commodities is here.
Grains as a class have risen over 33% year-over-year. Refined oil products have risen just shy of 13%, with home heating oil rising 18% year-over-year. In other words: Food, gasoline and heating oil have risen by double digits since 2009. And the 2010-‘11 winter in the northern hemisphere is approaching.
A friend of mine, SB, a commodities trader, pointed out to me that big producers are hedged against rising commodities prices. As he put it to me in a private e-mail, “We sometimes forget that the commodity markets aren’t solely speculative. Most futures contracts are bought by companies who use those commodities in their products, and are thus hedging their costs to produce those products.”
Very true: But SB also pointed out that, hedged or not, the lag time between agricultural commodities and the markets is about six-to-nine months, on average. So he thought that the rise in grains, which really took off in June–July, would hit the supermarket shelves in January–March.
He also pointed out that, with higher commodity costs and lower consumption, companies are going to be between the Devil and the deep blue sea. My own take is, if you can’t get more customers, then you’re just gonna have to charge more from the ones you got.
Coupled to these price increases is the ongoing Currency War: The U.S.—contrary to Secretary Timothy Geithner’s statements—is trying to debase the dollar, so as to make U.S. exports more attractive to foreign consumers. This has created strains with China, Europe and the emerging markets.
A beggar-thy-neighbor monetary policy works for small countries getting out of a hole of their own making: It doesn’t work for the world’s largest single economy with the world’s reserve currency, in the middle of a Global Depression.
On the contrary, it creates a backlash; the ongoing tiff over rare-earth minerals with China is just the beginning. This could easily be exacerbated by clumsy politicking, and turn into a full-on trade war.
What’s so bad with a trade war, you ask? Why nothing, not a thing—if you want to pay through the nose for imported goods. If you enjoy paying 10, 20, 30% more for imported goods—then hey, let’s just stick it to them China-men! They’re still Commies, after all!
Furthermore, as regards the Federal Reserve policy, the upcoming Quantitative Easing 2, and the actions of its chairman, Ben Bernanke: There is an increasing sense in the financial markets that Backstop Benny and his Lollipop Gang don’t have the foggiest clue about what they’re doing.
Bruce Krasting just yesterday wrote a very on-the-money précis of the trial balloons the Fed is floating, as regards to QE2: Basically, Bernanke through his WSJ mouthpiece said that the Fed was going to go for a cautious, incrementalist approach, vis-à-vis QE2: “A couple of hundred billion at a time”. You know: “Just the tip—just to see how it feels.”
But then on the other hand, also just yesterday, Tyler Durden at Zero Hedge had a justifiable freak-out over the NY Fed asking Primary Dealers for their thoughts on the size of QE2. According to Bloomberg, the NY Fed was asking the dealers how big they thought QE2 would be, and how big they thought it ought be: $250 billion? $500 billion? A trillion? A trillion every six months? (Or as Tyler pointed out, $2 trillion for 2011.)
That’s like asking a bunch of junkies how much smack they want for the upcoming year—half a kilo? A full kilo? Two kilos?
What the hell you think the junkies are gonna say?
Between BK’s clear reading of the tea leaves coming from the Wall Street Journal, and TD’s also very clear reading of the tea leaves by way of Bloomberg, you’re getting a seriously contradictory message: The Fed is going to lightly tap-tap-tap liquidity into the markets—just a little—just a few hundred billion dollars at a time—
—while at the same time, the Fed is saying to the Primary Dealers, “We’re gonna make you guys happy-happy-happy with a righteously sized QE2!”
The contradictory messages don’t pacify the financial markets—on the contrary, they make the markets simultaneously contemptuous of Bernanke and the Fed, while very frightened as to what they will ultimately do.
What happens when the financial markets don’t really know what the central bank is going to do, and suspect that the central bankers themselves aren’t too clear either?
So to sum up, we have:

    • Rising commodity prices, the effects of which (because of hedging) will be felt most severely in the period January–March of 2011.

    • A beggar-thy-neighbor race-to-the-bottom Currency War, that might well devolve into a Trade War, which would force up prices on imported goods.

    • A Federal Reserve that does not seem to know what it is doing, as regards another round of Quantitative Easing, which is making the financial markets very nervous—nervous about the Fed’s ultimate responsibility, which is safeguarding the U.S. dollar.

    • A U.S. economy that is weak to the point of collapse, where not even 0.25% interest rates are sparking investment and growth—and which therefore prohibits the Fed from raising interest rates, if need be. 

    • A U.S. fiscal deficit which is close to 10% of GDP annually, and which is therefore unsustainable—especially considering that the total U.S. fiscal debt is well over 100% of GDP.

These factors all point to one and the same thing:
An imminent currency collapse.
Therefore, I am confident in predicting the following sequence of events:

    • By March of 2011, once higher commodity prices reach the marketplace, monthly CPI will be at an annualized rate of not less than 5%.

    • By July of 2011, annualized CPI will be no less than 8% annualized.

    • By October of 2011, annualized CPI will have crossed 10%.

    • By March of 2012, annualized CPI will cross the hyperinflationary tipping point of 15%.

After that, CPI will rapidly increase, much like it did in 1980.
What the mainstream commentariat will make of all this will be really something: When CPI reaches 5% by the winter of 2011, pundits and economists and the Fed and the Obama administration will all say the same thing: “Happy days are here again! People are spending! The economy is back on track!”
However, by the late spring, early summer of 2011, people will realize what’s going on—and the Federal Reserve will initially be unwilling to drastically raise interest rates so as to quell inflation.
Actually, the Fed won’t be able to raise rates, at least not like Volcker did back in 1980: The U.S. economy will be too weak, and the Federal government’s balance sheet will be too distressed, with it’s $1.5 trillion deficit. So at first, the Fed will have to let the rising inflation rate slide, and keep trying hard to explain it away as “a sign of a recovering economy”.
Once the Fed realizes that the rising CPI is not a sign of a reignited economy, but rather a sign of the collapsing dollar, they will pursue a puerile “inflation fighting” scheme of incremental interest rate hikes—much like G. William Miller, the Chairman of the Fed from January of ‘78 to August of ‘79, pursued so unsuccessfully.
2012 will be the bad year: I predict that hyperinflation’s tipping point will be no later than the first quarter of 2012. From there, it will accelerate. By the end of 2012, I would not be surprised if the CPI for the year averaged 30%.
By that point, the rest of the economy—unemployment, GDP, all the rest of it—will be in the toilet. By that point, the rest of the economy will no longer matter: The collapsing dollar will make 2012 the really really bad year of our Global Depression—which is actually kind of funny.
It’s funny because, as you know, I am a conservative Catholic: I of course put absolutely no stock in the ridiculous notion that “The Mayans predicted our civilization’s collapse in 2012!”—that’s all rubbish, as far as I’m concerned.
It’s just one of those cosmic jokes that 2012 will turn out to be the year the dollar collapses, and the larger world economies go down the tubes.
As cosmic jokes go, all I’ve got to say is this:
Good one, God.


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Sun, 10/31/2010 - 12:29 | 688942 JimboJammer
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The  Perfect  Storm  is  here..... right  now .....

Sun, 10/31/2010 - 15:44 | 689272 Sudden Debt
Sudden Debt's picture

Not only in America. Also here in Europe. A few months ago, I had already seen numbers of 12 to 13% inflation here.

I only means we still have 12 to 24 months to prepare against the inflation nightmare.

Sun, 10/31/2010 - 12:39 | 688954 Walter_Sobchak
Walter_Sobchak's picture

Gonzalo, I think the major question now is...can TPTB manipulate gold prices long enough to establish their new monetary system and leave gold holders holding the bag?

Sun, 10/31/2010 - 14:19 | 689134 Arius
Arius's picture


"leave gold holders holding the bag?"


que passa?  am I missing something here?

Sun, 10/31/2010 - 14:40 | 689174 tmosley
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Just wild speculation.

The only bag holders of gold will be left with is the bag holding their gold inside.  The bullion banks are just about out of ammo.

Sun, 10/31/2010 - 14:30 | 689155 Oracle of Kypseli
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They can only manipulate a calm market. The current conditions are too powerful to be manipulated. This market will do what it must with everyone including institutional investors run for cover. A few banks, even with tons of Fed money, can not stop the wave of wealth preservation mode. 

Sun, 10/31/2010 - 19:06 | 689482 kiwidor
kiwidor's picture

'They' can manipulate anything they want.  As for the 'wave of wealth preservation mode', that started as early as 2004. That's when the smart money started relinquishing large [read: very illiquid] properties.  Proof of the change-of-mind was shown in sept/oct 2005; gold went up 75/oz one month and 125/oz the next.  [btw, I interpreted that gold move as a 'get out of the market' signal, figuring that we had about 3.5 years to see the real effects.  I was slightly off the mark]

So who is left in the market?  A: 'Them'  and some idiots.

'They' knew the derivatives were worth nothing, and have probably compensated already.  Next phase, trash your own market, and make a killing on commodities.  with the profits from that, buy up what you don't already own.

Next signal to watch for (amidst the confusion)  :  Large and/or well known companies being bought outright and de-listed. 

[ok, it's a prediction..but i couldn't bear to repeat the usual "gold's going up/gold's going down" stuff]

Sun, 10/31/2010 - 12:43 | 688959 spinone
spinone's picture

Economics is not a science, much more a social or political theory.  Economics is really an extension of political policy.  As such, if 2012 goes as you predict, a political response or solution won't be too far away.

Sun, 10/31/2010 - 15:13 | 689228 SWRichmond
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Economics is not a science, much more a social or political theory.  Economics is really an extension of political policy.

Bless you.  Economics is about how things get made, politics is about who gets to keep them.  Since both are about human behaviour, neither is a science, and should not be trusted or treated as one.

Sun, 10/31/2010 - 12:47 | 688966 LeftCoastRefugee
LeftCoastRefugee's picture

In this scenario I guess the only safe haven would be PMs.

Sun, 10/31/2010 - 13:25 | 689030's picture

PMS? So we're going to unleash a pack of menstruating harpies on the bankers? That ought to be fun to watch.

Sun, 10/31/2010 - 15:13 | 689227 kathy.chamberli...'s picture


no shit sherlock, that would hellarious†

Sun, 10/31/2010 - 12:53 | 688975 Steve Zissou
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If you wargame this out what does the average day of driving to the store, buying a loaf of bread, some PB&J, maybe some Funyuns and a pack of magnum condoms look like?  Say...fall of 2011 and fall of 2012.  

Would there be bread on the shelf in the fall of 2013?



Sun, 10/31/2010 - 13:01 | 688986 spinone
spinone's picture

Price controls and rationing

Sun, 10/31/2010 - 13:15 | 689013 Steve Zissou
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By what means.  Do you get to the register and they say.....sir, you can only buy one box of magnum condoms?  Would a national food stamp program be in place you think?

Sun, 10/31/2010 - 13:23 | 689027 spinone
spinone's picture

Ration cards or the like

Sun, 10/31/2010 - 15:17 | 689237 SWRichmond
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Bugs Bunny from 1943.  Fast forward to about 7:30.

You know how it is with these "A" cars.

Sun, 10/31/2010 - 14:22 | 689138 Arius
Arius's picture

oppsss...what do you say to the second girlfriend...honey, i already spent my one box of condoms..sorry

Sun, 10/31/2010 - 14:35 | 689167 Oracle of Kypseli
Oracle of Kypseli's picture

Learn to recycle the condoms. Rince and repeat.

For bread: stock on yeast, flour and make your own. 

Sun, 10/31/2010 - 15:14 | 689230 kathy.chamberli...'s picture

iCONDOMs, bitchez.

Sun, 10/31/2010 - 19:08 | 689484 kiwidor
kiwidor's picture

There's always room in the back.

Sun, 10/31/2010 - 13:07 | 688989 Sean7k
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Sun, 10/31/2010 - 13:04 | 688990 Sean7k
Sean7k's picture

I have one problem with your analysis: you claim the FED does not know what it is doing. Unfortunately, it is a really big flaw. Like most pundits, to begin with a false assumption and apply traditional economic theory to the result is dangerous.

Just as many have ended up wondering how the FED can pretend and extend as long as it has, it is simple- WE don't know what THEY'RE doing! We can guess, but unless we are in the room- we're blindfolded trying to hit the pinata.

The destruction of the dollar and most global currencies may be their goal- to bring in the SDR. Or it may not be. Commodities: remember this- most grain buyers have not been giving future contracts to farmers. This may become a game changer if farmers decide to hold out for better prices. Storage silos are not that expensive.

Loss of imports- we have done this before (the Great Depression). It does not destroy the country, but has been pointed out by others, it does allow for a transfer of wealth through the purchase of lower priced assets. People can live on food, clothing and shelter. In America, we have more housing than we need now, we are an exporter of food and we are capable of making our own clothing- we do grow a tad bit of cotton. 

I think the FED hasn't shown its' hand. It is still moving us towards the corral. I think when they start pushing us up the loading shoot, we will have a better idea. Until then, I suggest you stay on your toes.

Sun, 10/31/2010 - 22:45 | 689836 strannick
strannick's picture


Exactly. They are more evil than they are stupid. Maybe they're planning for SDRs, maybe a Treasury bond default. Maybe a reevaluation of gold. Be alert for the writing on the wall, and the signs of the times.

Sun, 10/31/2010 - 23:30 | 689893 Green Leader
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The forums @ Infowars report crops have been chemtrailed all over USA and that failures & reductions in yields have been geoengineered.

Where I live chemtrails busted plantains, bananas, pumpkins, fruits & other goodies. Pollinizers were all but wiped out, along with bats.

The imminent Iraqi Dinar revaluation will shuffle the cards globally. We are about to witness something REALLY big.

Better have a walking relationship with the Creator. Babylon is about to resurface.


Sun, 10/31/2010 - 23:43 | 689910 tmosley
tmosley's picture

You just keep thinking that, bagholder.  Enjoy having the screws put to you by a third world central bank.  I hate to tell you, but a non-convertible currency isn't going to be revalued higher in this lifetime.  Iraqi Dinar have no fungibility outside of Iraq.  Any price you pay for them will be WAAAAYYYY over their market value in the country, because it is being pushed by shucksters as the next big "investment".

Next you'll be telling us the Venezuelan Peso (or whatever) will be the world reserve currency.

Also, "chemtrails" are nothing but ice crystal formation around vaporized particulates in jet fuel.  If "THEY" really wanted you dead, or if "THEY" wanted crops to fail, they would fail, and you'd never see any evidence.  All it would take is an engineered virus that attacks bees (unlike the current bee die-off, which is caused by the combination of a funal infection and a bacterium or virus--I don't remember which).

Or, if they wanted to be sneaky, they would pump a herbicide into the aquifer (namely the Ogalalla), which would leave little or no evidence, and could never be shown to be artificial.  Dropping some chemical from 35,000 ft ensures that it will NEVER hit it's target, but rather will be carried by the winds out to somewhere in the middle of the Atlantic.  Notice how the "chemtrails" never seem to actually fall, and you can see them for hours after they were "dispersed"?  That's because they are as light as air, and very slight updrafts will keep them aloft for weeks, while the winds blow them every which way in a totally unpredictable manner.


Mon, 11/01/2010 - 12:35 | 690828 Green Leader
Green Leader's picture

1) All Central Banks report to their masters in the Metropolis.

2)Chemtrails are sprayed by unmarked planes *and* jet powered drones for lower altitude missions. The spray can be turned on and off at will, it's not 'condensed ice crystals'. I have witnessed it. Some are for meteorological manipulation, some for 'the shield', others for more evil objectives.

3) We know what they are spraying and how to fight it. Yahweh sent us an antidote.

4)I am a scientist, too...from one of these institutions that have buildings with exterior walls covered in vines.

5)Time will tell.

Sun, 10/31/2010 - 13:03 | 688991 ArsoN
ArsoN's picture

My stinky french cheeses are already twice as expensive!

Sun, 10/31/2010 - 13:06 | 688994 Stuck on Zero
Stuck on Zero's picture

Gonzalo is dead wrong.  As long as government agencies determine the CPI and as long as the main-stream media announces the results inflation will never exceed 2%! 

Sun, 10/31/2010 - 13:11 | 689005 EscapeKey
EscapeKey's picture

Absolutely! And as long as you feed your family with meat-flavoured brusk sausages, overripe melons, and strawberry squash which doubles as a disinfectant, then your BLS basket of goods has in fact only increased by 0.3% over the past 5 years!


Sun, 10/31/2010 - 13:07 | 688997 buzzsaw99
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What’s so bad with a trade war, you ask? Why nothing, not a thing—if you want to pay through the nose for imported goods. If you enjoy paying 10, 20, 30% more for imported goods—then hey, let’s just stick it to them China-men!...


This person is an idiot. Does he think we here in the usa can't make a toaster or frying pan? What part of "trade war" does he not understand?

Sun, 10/31/2010 - 13:24 | 689028 tmosley
tmosley's picture

Find me one toaster or frying pan factory in America.  I dare you.

Sun, 10/31/2010 - 16:36 | 689329 TheSettler
TheSettler's picture

Lodge Manufacturing Co. is the sole domestic producer of foundry seasoned cast iron cookware in the United States. Founded in 1896. Great stuff. 

Sun, 10/31/2010 - 19:33 | 689498 tmosley
tmosley's picture

Excellent.  I need a new set of cast iron cookware, having lost mine in a house fire last year.  I will look into buying some from them.

Sun, 10/31/2010 - 22:51 | 689847 RockyRacoon
RockyRacoon's picture

I'd think a house fire would season a good skillet just right!

Sun, 10/31/2010 - 22:58 | 689851 tmosley
tmosley's picture

Only if you love the take of burned plastic in your food.

I might have been able to save it, but I didn't think about it, and the kitchen was the worst hit area (more by the firemen than the fire--had a lot of food in there, and they managed to get it ALL onto the floor, along with everything that was in the cabinets.

And I'm pretty sure one of them took my 9mm that I had next to my bed.  I wan't happy about losing that.

Mon, 11/01/2010 - 18:59 | 691846 Nels
Nels's picture

Lodge makes somewhat crude pans.  The interior of the frying pans still has the lumps and bumps from the sand casting.  They used to (but no longer) sell them with the interior ground smooth.  It's a bit more expensive, but you can get a better pan on the used market, and still get made-in-the-USA.  If it's more important to support an existing company, buy the Lodge, but maybe also a grinder (or find a machine shop) to grind it down.

Trying to fry eggs on a 90 grit surface isn't so much fun.

Sun, 10/31/2010 - 22:57 | 689824 Big Red
Big Red's picture


I usually find that some box store or dollar store sells one quality item at a quite reasonable price. You can buy Lodge Logic cast iron at Walmart. Not a great selection, though.

Pears Soap (wikipedia that!) has now changed their formula, no longer hypo-allergenic, could get for $1/bar at Dollar Tree.

Sun, 10/31/2010 - 13:35 | 689052 FreedomGuy
FreedomGuy's picture

Actually, he has it right. We can make a toaster. It will cost 30% more than the Chinese one. However, it might actually work.

Sun, 10/31/2010 - 13:38 | 689057 tmosley
tmosley's picture

The toaster I have works just fine.  Don't deprive me of cheaper goods just because you don't understand economics.

If your economic solution to any problem requires the initiation of force, then it is wrong.  It is as simple as that.

Sun, 10/31/2010 - 13:59 | 689093's picture

Indeed. How bizarre that some would insist that you must purchase one toaster rather than another at the point of a gun.

Sun, 10/31/2010 - 15:32 | 689256 kathy.chamberli...'s picture

i have to disagree. being female i have acquired quite a taste for domesticity. everything is just pure and simple crapola now. the cheap big furniture made overseas, no integrity in style and design. everything is just filler and bulk. square edges and corners are sharp. new shit furniture manufactured to just hurt you while cursing around your house. my father bought some cherry trees and had a lot of our furniture made like the Amish styling. smooth edges, not heavy nor glued or this new stupid peg method or this new screw looking mechanism. the small appliances are just cheap shit plastic, especially the new toasters. just cheap base materials are used any more in construction. the damn furniture costs are more in the shipping costs, cause it all weighs so damn much. try to return a media center if you don't like it. the retailer will just say it costs more to ship back than it cost to buy. american made antiques sure were fine back in the day. even picture frame making was a craft in america. potters, weavers, glass blowers we use to respect these professions now they are the butt of all jokes. we have just lost our soul to china and cheap manufacturing. oh yeah, forgot about IKEA. i have never in my life experienced shopping HELL in that ass backwards store. to push onto the american public that this is the new shopping experience. pleeeeaze. now that is a dumb down american experience. christ i will never go into one of those stores ever again and buy a DIY piece of crap furniture.

Sun, 10/31/2010 - 16:10 | 689301 Dingleberry Jones
Dingleberry Jones's picture

Apparently the taste for domesticity has destroyed your taste for producing posts with legibility.  Capitalization, punctuation, and most importantly, usage of paragraphs is greatly appreciated.

Thanks for your future cooperation.

FWIW, I agree with your premise that cheaply manufactured and designed products go the way of the dinosaur. They are terrible.


Sun, 10/31/2010 - 17:11 | 689376 Careless Whisper
Careless Whisper's picture

caps + paragraphs = waste of time. bold worthy.


Sun, 10/31/2010 - 18:45 | 689454 kathy.chamberli...'s picture

im junking you, cause your judging me.

Mon, 11/01/2010 - 10:33 | 690440 Dingleberry Jones
Dingleberry Jones's picture



Sun, 10/31/2010 - 18:57 | 689475 traderjoe
traderjoe's picture

"Thanks for your future cooperation." - who died and made you lord of readability of posts? Don't like 'em, skip past. Easy to do. Diversity of opinion and style is good. 

Mon, 11/01/2010 - 10:35 | 690451 Dingleberry Jones
Dingleberry Jones's picture

Paragraphs and caps were invented for a reason. It helps people read. It's one giant rumbling run-on rant.

Diversity of opinion and style is good. Being able to read the actual ideas underlying is better.

Sun, 10/31/2010 - 17:00 | 689366 trav7777
trav7777's picture

i don't buy that shit.

Ethan Allen or Bloomies, thanks.  A lot of shit made in america; it's bulletproof.  I have a couple things from France and Italy too; they are very nice but not as solid.

Sun, 10/31/2010 - 17:09 | 689373 Dingleberry Jones
Dingleberry Jones's picture

I *think* that you are agreeing with her, actually. I think her point was that chinese stuff is pure crap.

American made stuff is awesome. Agree about Ethan Allen. Also, I do have some awesome Amish stuff. You can find quality, and sometimes don't have to pay through the nose for it.

Sun, 10/31/2010 - 18:42 | 689441's picture

Pitting the products of an Amish craftsman against those of a low paid assembly line worker in China makes for a grossly unfair comparison. One would want to compare the work of an American craftsman against that of a Chinese craftsman. There are probably far more traditional craftsmen in China as compared to the US simply because industrialization came so late there. So all in all, the Chinese likely produce far more "good" furniture than we do. It simply isn't offered to us for sale as it doesn't fit into the cheap import paradigm.

Sun, 10/31/2010 - 18:47 | 689458 kathy.chamberli...'s picture

please respect the Amish and don't call them stuff. please use adjectives or nouns but not stuff.

thx in advance.......the Amish.

Mon, 11/01/2010 - 10:36 | 690457 Dingleberry Jones
Dingleberry Jones's picture

You're flavor of insanity is interesting.

Mon, 11/01/2010 - 10:36 | 690460 Dingleberry Jones
Dingleberry Jones's picture

You're flavor of insanity is interesting.

Sun, 10/31/2010 - 18:48 | 689463 Red Neck Repugnicant
Red Neck Repugnicant's picture

Ethan Allen?  Barf.  That's like buying a Cadillac Deville.   

Ethan Allen is where all the prozac suburbanites go if they want to pretend to know something about furniture or design. When I think of Ethan Allen I think of Annette Benning in American Beauty.

The Germans, as always, make the best.

Interlubke is the best furniture company in the world.  A bookshelf made by them can withstand a thermobaric explosion.

Sun, 10/31/2010 - 19:20 | 689491 kiwidor
kiwidor's picture

I can see myself cutting some wrists if I had to spend more than 40-45 minutes in a room full of Interlubke.  UGHK!!

But you are absolutely spot-on about Ethan Allen. Enough bad design there to wake the little arsonist in everyone.

Sun, 10/31/2010 - 18:48 | 689464 WaterWings
WaterWings's picture

I'm in awe her post has substance.

Sun, 10/31/2010 - 19:01 | 689479's picture

My thoughts exactly.

Sun, 10/31/2010 - 20:47 | 689614 kathy.chamberli...'s picture

thanks wings, means a lot on hall Ø'd weenie.

Sun, 10/31/2010 - 13:12 | 689001 Caviar Emptor
Caviar Emptor's picture

What if inflation is moderate but pervasive and incomes, housing and employment continue to deflate at a moderate pace? 

This scenario is more likely since the Fed with the backing of the global banking cartel and the G20 will try to keep the bond bubble going at all costs. They'll also buy up every paper asset from every bankrupt TBTF institution including ETFs, stocks, junk bonds. Japan's surprise announcement this week to that effect proves that there's no limit at all to what global central banks will do to keep the Ponzi going. Accounts payable and the liability side of every balance sheet will be next if that fails. 

By pursuing this course with increasing abandon there will be inflation, in everything you need. THat includes businesses and individuals. All input costs will rise. Everything middle class people need to live and progress through their work lives will rise and rise. 

But at the same time the ability to support the increased costs will decline as the huge offshoring of jobs continues, and employment will deflate. Along with that incomes will deflate in real terms especially as productivity continues to rise. And housing? lol. McMansions will fast become the new haunted houses of future Halloweens. Soon people will call real estate 'the worst investment you can ever make' considering that the cost of ownership will rise and rise along with blight and crime. And when the new Republican Congress starts hacking away at Medicare and Social Security, retirement assets will continue sliding. 

The result of Fed and global central bank policy will be biflation. As US consumers get more and more constrained, business margins will continue to erode as the costs can't be passed on. Feeding the vicious cycle. Lotsa Luck.


Sun, 10/31/2010 - 13:11 | 689003 Racer
Racer's picture

Bread flour in the supermarket has risen over 100% in the last few weeks. It used to be 59p for 1.5Kg, it is now 128p

Sun, 10/31/2010 - 13:15 | 689014 EscapeKey
EscapeKey's picture

My grocery bill here in the UK is on an almost weekly rise. I used to be able to stay within 40 quid for a weeks worth of groceries, now I'm fortunate to stay within 50.

I guess I don't have to buy a bottle of wine, quality cheese, or any of the few other luxuries I enjoy, but they do put a bit of spice on life.

Sun, 10/31/2010 - 13:26 | 689021 Racer
Racer's picture

If you shop around it is surprising how much you can save.. often 20 to 30% on items. Before I go out shopping I compare prices online and buy only the cheapest items in each supermarket, I stick to my pre-planned list and wait for special offers to stock up on items. Today I found breadflour in one supermarket still at the old price and bought 10 bags for 60p! (I had already bought 10 bags, and cleared the shelf, at 60p a couple of weeks ago and that should now last me for many months and they can do what they like with the price!)

I am waiting for a special offer that I have been given starting next week, on pet food that will save me 20%. I get one brand of pet food in that shop that is more than 30% cheaper than the supermarkets!

Sun, 10/31/2010 - 13:27 | 689033 Caviar Emptor
Caviar Emptor's picture

The endless game during an inflationary spiral is advertising "outrageous, insane bargain prices" loudly and frequently until the public believes. 

Sun, 10/31/2010 - 14:43 | 689182 Oracle of Kypseli
Oracle of Kypseli's picture

We stocked on food last weekend. Among many things we bought three 50lb bags of rice at $13.75/bag at Sam's Club. Best food insurance for $40.

Sun, 10/31/2010 - 15:39 | 689268 kathy.chamberli...'s picture

white rice isn't great for you either. maybe arborio. rice is over rated. i would never buy anything from sam's club. it has to be horrible.

Sun, 10/31/2010 - 15:36 | 689265 kathy.chamberli...'s picture

bread or flour isn't really all that great for you. i think it was propaganda. just like taking a shower every day was propaganda. it started up after the WWII, by P&G. read an article about this in the NYT this morning. it is all cow mow lark y. a shower a day was for the farmers not us white people that never do any heavy lifting any more. shouldn't wash your hair often either. we need the good bacteria on our biggest organ S K I N .

Sun, 10/31/2010 - 16:22 | 689314 Oracle of Kypseli
Oracle of Kypseli's picture

Some of us may agree with you on your various comments but arborio rice which we used yesterday for risoto, does not keep as well. As far as washing body and hair on a daily basis, unless your mate likes your natural chemistry, you're dead in the water. 

Sun, 10/31/2010 - 16:42 | 689336 TheJudge2012
TheJudge2012's picture

I keep the rice in the fridge to keep the moths away.

Sun, 10/31/2010 - 18:42 | 689446 kathy.chamberli...'s picture

that is probably why i don't have a "mate y".

well i bought a real high end expensive japanese rice cooker, cause rice is hard to cook actually. doesn't get the rice completely cooked any more, especially a long grain black rice. it cooks arborio pretty fast. i love risoto, actually only one of the meals i can cook with some satisfaction. it is just white fluff though, no real nutrients. love putting saffron in it.

your cute†

Mon, 11/01/2010 - 00:52 | 689959 Oh regional Indian
Oh regional Indian's picture

Could not agree more.

On the topic of washing and otherwise, may I offer:



Sun, 10/31/2010 - 13:13 | 689007 Dapper Dan
Dapper Dan's picture

Classic Joe Bageant,  see link for the complete article.


For example, bankers and investment houses believe intelligent algorithms (Big Al) can calculate human risk in making loans. That an algorithm can predict whether a 35-year old lawn sprinkler installer in Tuscaloosa will be able to steadily make $2,300 monthly payments on his $220,000 twice refinanced “snout-house” (so-named because of the four-car garage sticking out the front) for 30 years. Most of us would be more than happy to make that prediction for them, and with far greater accuracy, for a fraction of what they paid the pinhead to write the algorithm.

Sun, 10/31/2010 - 13:14 | 689008 Xibalba
Xibalba's picture

I see China's red racecar crashing first as it speeds outta control.  Then the US car right behind it.  In the end, the US will be ok.  But it sure as hell won't look the same. 

Sun, 10/31/2010 - 21:16 | 689687 morkov
morkov's picture


Sun, 10/31/2010 - 13:29 | 689025 rapacious rachel wants to know (not verified)
rapacious rachel wants to know's picture

well written, excellent stuff

I'll let the optimists disagree while I load a few more clips

Sun, 10/31/2010 - 14:02 | 689099's picture

En block clips come pre-loaded in the spam can. I think that's just garand!

Sun, 10/31/2010 - 15:28 | 689248 SWRichmond
SWRichmond's picture

Get em out of the spam can if you think you need quicker access.


Sun, 10/31/2010 - 13:30 | 689042 jesus
jesus's picture

Yes, everything is going to lead to hyperinflation. That is why I only invest my money in moon rocks, they aren't makin' any more of those.


Sun, 10/31/2010 - 14:27 | 689151 Arius
Arius's picture

moon thats an idea...after all they could have some gold in them like the ones in Afganistan....

Sun, 10/31/2010 - 13:32 | 689046 Oh regional Indian
Oh regional Indian's picture

The author has a narrow view in my opinion. There is unstable geopolitics, Israel (deserves it's own spot), pestilence and last but not least crazy shit happening on earth and sun.

The article assumes a status quo in the state of the world going ahead.

I think the signs are saying otherwise.



Sun, 10/31/2010 - 13:41 | 689066 tmosley
tmosley's picture

crazy shit happening on earth and sun

Please expound.

Sun, 10/31/2010 - 14:10 | 689109 Oh regional Indian
Oh regional Indian's picture



Indonesia had a 7.7 quake, huge tsunami and now 2 volcano's going off. The famous Krakatoa blew a few hours ago.

GOM crisis is still festering (please see section in, excellent resource, or The critical mass of bad news from there is going to hit MSM soon.

And of course the daily dose of floods/mudslides et. al. Earth is shaky.


when the flares finally happen to come our way, they will knock down a ton of electirics (satellites, mobile telephony, TeeVee, GPS). All the redundencies are also electric, especially on modern airplanes etc. 

And this is not to speak of major anomalous behavior on Jupiter and Saturn. May I suggest:



Sun, 10/31/2010 - 14:17 | 689129 Dapper Dan
Dapper Dan's picture

Great links O R Indian thank you,

please see link on Joe Bageant  I posted up above a few comments ago.

 I think you would enjoy although not necessarily related to your links



Sun, 10/31/2010 - 14:39 | 689173 Oh regional Indian
Oh regional Indian's picture

Welcome Dapper and thanks for reminding me to visit Joe B. I like his angry style.

And if you do not already, please check out Dmitry Orlov at

Nice humorous counterpoint to Joe.


Sun, 10/31/2010 - 14:51 | 689195 Oh regional Indian
Oh regional Indian's picture

The American middle/working class is still preoccupied with gazing at the shadows cast upon the walls of its cave/prison, preferring to go on believing what they are told by their owners and handlers: that all will be right with their little world, provided they keep their head down and work hard (at trying to find a job). Political hucksters like Obama reassuringly tell us that “Yes We Can” survive this crisis and go on begging for a piece of the American Dream. The man behind the curtain is imploring them to go on ignoring what is before their eyes. He tells us that their world is intact and will continue to prosper. And they dutifully listen, and willfully refuse to see. But the disillusioned among us can no longer ignore the mountain of evidence to the contrary that is before us. This show is coming to an end, and it promises to be an inglorious one. The wave of extinction, peak oil, peak water, economic and financial crises worldwide, political unrest abroad that is about to spread to the homeland—are these not signs of imminent collapse? From: Brilliant stuff.... ORI

Sun, 10/31/2010 - 15:44 | 689273 kathy.chamberli...'s picture

wifey O, sure looks like she is eating quite well thank you. bet she can't fit into that designer inauguration dress she B wearing on that cold cold day in D. C. just sayin. damn she's got a behind to her.

Sun, 10/31/2010 - 14:51 | 689193 tmosley
tmosley's picture

I couldn't find any historical data to compare either to the Earth or the Sun's activity.  I know we are in a potentially severe situation as far as solar flares go, but I don't know anything about the magnitude of it.  There was a solar flare in the 1880's I believe that was strong enough to cause telegraph wires to burst into flames, and you can imagine what such a flare would do today.

There does seem to have been more earthquakes than usual lately, but nothing apocalyptic.  It's really the long periods of quiet that are problematic, as they tend to lead to a sudden, catastrophic release aka "the big one".

Sun, 10/31/2010 - 15:08 | 689219 Oh regional Indian
Oh regional Indian's picture


We had Haiti and Peru to start the year. Two mega-quakes. And now Indonesia again. Huge. 3 mega Quakes in one calendar year. That was six sigma territory two decades ago.

And Pakistan's epic floods? And China's Epic floods/mudlsides? 

And as for the sun, we are heading in to a solar maximum in 2013 after an unusually slow start to the current cycle 24. The sense is of a big wallop coming. It is spewing out class C flares, just have not chanced to be our direction yet. But like a hurricane in the GOM and April, come it will!



Sun, 10/31/2010 - 16:08 | 689296 robobbob
robobbob's picture

or, try the Russians

Pulkovo observatory St Petersburg

Sun, 10/31/2010 - 15:41 | 689271 kathy.chamberli...'s picture

hell, boulder colorado has had two evacuations in the last two months because of wildfires. jeeze two fires of substantial significance to scare me.


Sun, 10/31/2010 - 17:16 | 689386 Sean7k
Sean7k's picture

The only volcano erupting is Merapi. Anak Krakatoa is sending up some clouds and there are two others that have caused alerts to be issued. Indonesia has 500 volcanos of which 130 are presently active. 

Sun, 10/31/2010 - 23:41 | 689906 Green Leader
Green Leader's picture

We had a ham radio freak join our green movement and from the very beggining he was hammering me and others with the subject of solar flares, global communications breakdown, international banking shutdown, that we needed alternative communications, get the FCC license, etc.

Nowadays I consider him the most valuable member. For real.

Mon, 11/01/2010 - 00:58 | 689963 Oh regional Indian
Oh regional Indian's picture

HAM is great Green Leader. I wish I'd paid attention during morse classes in the Navy.

._ _ .. _ _ _ .



Sun, 10/31/2010 - 13:36 | 689053 Quinvarius
Quinvarius's picture

I suspect the Fed will announce open ended QE with the goal of backstopping Treasuries no matter what the cost.  While at the same time, the Fed will secretly intervene in consumer facing commodity markets.

Sun, 10/31/2010 - 14:26 | 689149 EscapeKey
EscapeKey's picture

In that case, everyone will start asking for delivery, and not just in PMs, in every commodity type.

They should get out of the way already, they just continuously make it worse.

Sun, 10/31/2010 - 14:52 | 689196 tmosley
tmosley's picture

Already done.  I've even got a 50 pound bag of popping corn in the garage.  I think I might start dipping into it this week.

Sun, 10/31/2010 - 15:34 | 689260 SWRichmond
SWRichmond's picture

The Fed is in the market to stay.; the Fed knows it, and the market knows it as well.  There is no credible exit strategy, Bernanke is trapped.

Sun, 10/31/2010 - 13:39 | 689061 arthur darrell
arthur darrell's picture

When certain commodities rise others take their place. Corn has been subsidized for years and recently we have learned from Michael Pollan that it is most likely the single greatest cause of diabetes ( which is NOT genetic or
"adult only" ) and obesity and America's overweight society so maybe the markets will cuyre a great cause of America's health care problem with further corn price rises. As to the grains plenty are unhealthy too with their sugar inclusion speaking of commodities hitting multi decade hiigh prices. Hyperinflation is way to out there but there is a cae made here for some commodity ownership as a hedge. I was amazed in September when stock prices increased 10% but the USD fell 12%. I bet not one word from the mainstream media on that anomoly.

Sun, 10/31/2010 - 13:45 | 689076 Quinvarius
Quinvarius's picture

Everything in that post was completely ignorant.  Please tell me you are being sarcastic.

Sun, 10/31/2010 - 15:14 | 689232 Sean7k
Sean7k's picture

All the info on corn is true. See video: Food Inc. Read "Omnivore's Dilemma". Check out Acres Magazine. Go to the USDA's site and you should be able to find out about farm subsides. Or, ask a farmer- I'm one, my father in law and brothers in law all farm corn and beans in Illinois. Read up on Monsanto, Cargill, ADM, Tyson's and learn.

Sun, 10/31/2010 - 16:09 | 689298 Hulk
Hulk's picture

Arthur is spot on. I will add that lack of physical activity is also contributing to type II

Sun, 10/31/2010 - 13:41 | 689067 FreedomGuy
FreedomGuy's picture

I like this article and I remember the one in August. I can see the rationale for the slight change in opinion. However, isn't "backstopping" itself a transparent form of currency and debt manipulation? Shouldn't it also lead to a loss of confidence. At some point there has to be a final reckoning and balancing of the spreadsheets/accounting.

Sun, 10/31/2010 - 17:20 | 689392 Gonzalo Lira
Gonzalo Lira's picture




Sun, 10/31/2010 - 13:47 | 689068 Atomizer
Atomizer's picture

Regardless of what to FED says, lets look at door #2

The Codex Alimentarius -Law in the United States in 2010

Sun, 10/31/2010 - 13:41 | 689069 Steve Zissou
Steve Zissou's picture

Maybe I should request my salary paid in ozs of gold/month.

Sun, 10/31/2010 - 13:48 | 689079 flaunt
flaunt's picture

If things do come crashing down in 2012, I won't see it as a cosmic joke.  I'll see it as the design of a bunch of sick, psychopathic (and very human) manipulators.

The thing that pisses me off most about this is how hard it is to protect yourself.  Even if you have a brain and get yourself some gold and silver, should you dare exchange it for fiat at any point along the inflationary journey, you'll get taxed to hell on the nominal gains and potentially get robbed of real purchasing power from the point when you bought.  That leads me to believe the best time to sell will be either never, or when the gov't collapses and we don't have to pay the thieves our hard-earned money anymore.


Sun, 10/31/2010 - 14:00 | 689096 Atomizer
Atomizer's picture

Certain groups regarded as the Penus Project wish to create chaos to form the dead public into submission. A few more TV ads about the death of civilization by the Yellowstone volcano should generate the 10 radio listeners to purchase a coffee mug.

Sun, 10/31/2010 - 16:38 | 689333 Sergio
Sergio's picture

It still beats being wiped out like everyone else will be... you just gotta wait until the right time.

Sun, 10/31/2010 - 13:57 | 689092 doomandbloom
doomandbloom's picture

someone told me that 2012 is real...and actually Ben is protecting us certain factions of TPTB, had set us up for a perfect fall....:) crash the markets and have a mad max society leading into 2012....


i luv conspiracies...

Sun, 10/31/2010 - 14:08 | 689111's picture

Certainly 2012 is real. It's temporally nestled smack between 2011 and 2013.

Sun, 10/31/2010 - 14:24 | 689131 Atomizer
Atomizer's picture

2012 is not the end of world, rather a new beginning. The lacking- in -control will sell fear and doom to maintain control. This FED/IMF honeypot will falter.


Sun, 10/31/2010 - 14:05 | 689108 oldmanagain
oldmanagain's picture

The biggest problem is not policy.  We have too many people for a limited amount of resources.

Sun, 10/31/2010 - 14:09 | 689115's picture

I wouldn't bother digging up Malthus unless it was to tell him he was wrong, wrong, wrong.

Sun, 10/31/2010 - 15:34 | 689262 SWRichmond
SWRichmond's picture


Sun, 10/31/2010 - 14:18 | 689125 Eureka Springs
Eureka Springs's picture

I'm wondering where all those other folk who experienced hyperinflation in the past suddenly dug up enough cash (worthless as it may have been) to fill wheelbarrows? Much less how they did so for a year or more. 

Sun, 10/31/2010 - 14:17 | 689126 Humpty Pundit
Humpty Pundit's picture

GL - Thanks for consulting your crystal ball for us. I shall plan accordingly.

Sun, 10/31/2010 - 17:26 | 689397 Gonzalo Lira
Gonzalo Lira's picture

Any time!


Oh, and Humpty? I saw my crystal ball—it doesn't look good for you.


Do NOT cross the street on Wednesday—in fact, don't go outside AT ALL on Wednesday. Actually, do NOT go outside at all during ALL of next week. Call in sick, whatever, just DO NOT GO OUTSIDE NEXT WEEK. Or next month, for that matter—just to be safe. If you get fired, tell 'em that the Great Gonzo predicted something awful would happen. 


Do NOT GO OUTSIDE!!! All of next month!!!! ALL OF NEXT YEAR!!!!




Don't tell me I didn't warn you. 



Sun, 10/31/2010 - 17:46 | 689412 robertocarlos
robertocarlos's picture

I haven't left my apt in 8 days because we had a gang initiation and someone shot 3 random people. I'm fresh out of frozen pizza. That shows that even stocking up isn't much help.  

Sun, 10/31/2010 - 18:46 | 689457's picture

Dude, that's hardcore.

Sun, 10/31/2010 - 19:37 | 689502 tmosley
tmosley's picture

My God man.  Can you move?  I'd highly suggest you GTFO ASAP with crap like that going on.

Sun, 10/31/2010 - 18:38 | 689449 kathy.chamberli...'s picture

G R E A T  gonzo has been taken, sorry dude.

maybe you could be the OK gonzo†

Sun, 10/31/2010 - 14:57 | 689206 President Palin
President Palin's picture

The thing that pisses me off most about this is how hard it is to protect yourself.  Even if you have a brain and get yourself some gold and silver, should you dare exchange it for fiat at any point along the inflationary journey, you'll get taxed to hell on the nominal gains and potentially get robbed of real purchasing power from the point when you bought.  That leads me to believe the best time to sell will be either never, or when the gov't collapses and we don't have to pay the thieves our hard-earned money anymore.


I could not have said it better myself.

Sun, 10/31/2010 - 15:35 | 689264 SWRichmond
SWRichmond's picture

+ another

Sun, 10/31/2010 - 18:48 | 689460's picture

So you've just give up or do you have the miracle cure?

Sun, 10/31/2010 - 15:02 | 689214 godfader
godfader's picture

When commodities fell 75% in late 2008 we didn't have annualized -8% prints in the CPI did we? Now if commodity prices rise 75% why would we see 5-10% annualized CPI prints within 6-12 months?

Sun, 10/31/2010 - 16:28 | 689321 RobotTrader
RobotTrader's picture

Gold $1,500 = Dow 12,000

Dow 8,000 = Gold $900

There will be no inflation until energy prices or wages start rising.

Right now, neither is happening.

I haven't seen price increases anywhere yet.

Other than the price of high-priced call girls in Beverly Hills


Sun, 10/31/2010 - 17:08 | 689374 trav7777
trav7777's picture

then, to be blunt, you're a moron.

A bag of freakin chips is $4 now.  gas is near $3/gal.  Oil at 82.  What planet are you on, man?

Look at a BMW 3 series or the price of an S-class.  Prices are up all across the board...the inflation has already happened.  Once inventory overhead is worked through and the intentional loss-on-energy via stimulus expires, prices will take another leap up.

Sun, 10/31/2010 - 17:19 | 689390 Careless Whisper
Careless Whisper's picture

@ robo

I haven't seen price increases anywhere yet.

Other than the price of high-priced call girls in Beverly Hills

oh really. i kinda doubt that. the economy is in the tank, so i would expect more ladiez to enter that profession; more competition would lower prices. if you have any examples to back up your statement, please post.


Sun, 10/31/2010 - 20:56 | 689647 kathy.chamberli...'s picture

F R E E    love, dear whisper.

Sun, 10/31/2010 - 20:54 | 689637 kathy.chamberli...'s picture

fine GERMAN engineering. i have been buying german..made cosmetics,

they are the best of the west.

Sun, 10/31/2010 - 20:55 | 689640 kathy.chamberli...'s picture

double trouble†

Sun, 10/31/2010 - 23:25 | 689882 RockyRacoon
RockyRacoon's picture

I haven't seen price increases anywhere yet.

I guess it's the weirdness, but how can you nestle statements like this in your comment?   You are without a doubt a paid shill.  

Sun, 10/31/2010 - 16:37 | 689330 Holden Caulfield
Holden Caulfield's picture

I just bought a loaf of bread for a dime, a 1964 dime that is.

Sun, 10/31/2010 - 18:52 | 689466's picture

It's good to see someone talking good old common sense in an effort to keep those crazy kids from running off over the cliff. Catch them if you can.

Sun, 10/31/2010 - 16:44 | 689342 maff
maff's picture

GL, you say, "The Fed won’t be able to raise rates" and then talk about the Federal government’s balance sheet. I'm not an expert but isn't the mountain of interest rate swaps more of a problem - the TBTF banks have put a revolver to their head and have dared the Fed to pull the trigger.

Sun, 10/31/2010 - 17:03 | 689368 trav7777
trav7777's picture

who CARES if import prices rise?  Then China will sell less and their economy goes over the falls.

THAT'S PRECISELY GD why they keep pegged to the USD!!!

Mon, 11/01/2010 - 07:41 | 690099 Tsukato
Tsukato's picture

Hey retard, exports from China, especially to the States, are a nominal part of the economy these days.

Then China will sell less and their economy goes over the falls.

The Chinese economy is run by far sharper people than the crooks in the states. The peg to the dollar will be dropped once the Fed has ushered in hyperinflation, and done the dirty work, all of america's enemies couldn't have done better. At the time of peg detachment, the Chinese govt. will look like heroes for quickly destroying inflation, and at the same time, making peasants richer than Americans. Can't wait for that brutal unpegging! I'm gonna be one rich American, and you will all be my bitches then! BWAHAHAHA!!! I'll probably be able to buy yer wives and daughters for less than 100 kwai!

Sun, 10/31/2010 - 17:10 | 689375 belogical
belogical's picture

The rapid hyperinflation concept just doesn't seem feasible to me. we got that when printed money was pushed into the economy. This is digital dollars and the average person is only seeing them in the markets. You can take prices only so far and people start to cut back or just default and stop paying for anything but essentials. You'd also see more pay cuts at the small business level which would retard inflation. I see the problem being one of confidence more then inflation. People lose confidence in gov't and institutions and see that even voting them out doesn't work and things would move to ugly quickly. That would hit business hard and the gov't harder forcing investors out as sovereign risk rises  

Sun, 10/31/2010 - 17:12 | 689378 kaiserhoff
kaiserhoff's picture

Winter is approaching in the northern hemisphere.


First Gonzo says bonds are going to blow up.  Now he says they won't.  He predicts inflation rates for several consecutive quarters, reducing his chances of being right to almost zero.  This clown is always sucking the hind teat, and announcing the obvious as if he invented it. 

Sun, 10/31/2010 - 18:55 | 689471's picture

Winter is approaching in the northern hemisphere.


And as they say, so is Christmas. But then again maybe not.

Mon, 11/01/2010 - 10:16 | 690383 h3m1ngw4y
h3m1ngw4y's picture

the hyperinflationary winter in fiat = deflationary winter in gold to end this kontradieff

Sun, 10/31/2010 - 17:15 | 689384 tony bonn
tony bonn's picture

don't count the bonds in....bernankrupt's and the bankster's deft use of irs will keep bonds credible for a while but currency debasement will make them radioactive - .25% in a 30% cpi world does not work for long. the bonds will not survive....when irs collapse, the hydra-headed hydrogen bombs will explode with fury...of course it will be the ultimate crisis not to waste....god help us all....

Sun, 10/31/2010 - 17:33 | 689401 robertocarlos
robertocarlos's picture

The price of corn could be five-fold and my CornPops will only be up 50 cents in price.

Labour costs won't change.

Sun, 10/31/2010 - 17:35 | 689406 robertocarlos
robertocarlos's picture

The golbugs love these articles because they are sure they will be the new owner of whole city blocks for one gold coin.

Sun, 10/31/2010 - 18:57 | 689473's picture

Why do you like these articles?

Sun, 10/31/2010 - 23:30 | 689895 RockyRacoon
RockyRacoon's picture

You got a problem with that?  What's your point?

Mon, 11/01/2010 - 10:19 | 690393 h3m1ngw4y
h3m1ngw4y's picture

it happened before it "could" happen again, but its a cheap gamble to take


Sun, 10/31/2010 - 18:18 | 689435 Batty Koda
Batty Koda's picture

Personaly I think inflation will be a sideshow compared to what's heading our way in 2011. The economy has been bent out of shape like a cheap plastic ruler by the Fed, sooner or later it will break, sooner rather then later in my opinion.

We are in a positive feedback loop of economic ruin with derivatives, overvalued assets, trade wars, unemployment, excessive government debt and now fraudclosure all feeding each other like wood on a bonfire. The Fed is already desperate as proven by QE2, people are waking up to reality and exiting the markets, world governments are rejecting the global elite's dreams of a New World Order even as the IMF, G20, UN push harder for "global unity".

In short, it's all coming apart at an accelerating pace. I wouldn't be surprised if we reach the breaking point before the new year.

Sun, 10/31/2010 - 18:19 | 689437 Batty Koda
Batty Koda's picture

Personaly I think inflation will be a sideshow compared to what's heading our way in 2011. The economy has been bent out of shape like a cheap plastic ruler by the Fed, sooner or later it will break, sooner rather then later in my opinion.

We are in a positive feedback loop of economic ruin with derivatives, overvalued assets, trade wars, unemployment, excessive government debt and now fraudclosure all feeding each other like wood on a bonfire. The Fed is already desperate as proven by QE2, people are waking up to reality and exiting the markets, world governments are rejecting the global elite's dreams of a New World Order even as the IMF, G20, UN push harder for "global unity".

In short, it's all coming apart at an accelerating pace. I wouldn't be surprised if we reach the breaking point before the new year.

Sun, 10/31/2010 - 18:52 | 689468 Triggernometry
Triggernometry's picture

2012 or not, the market seems as though its meta-stable. In thermodynamics, a meta-stable state is created when a particular substance surpasses the transition enthalpy without undergoing a phase change, the slightest perturbation then leads to near instantaneous phase shift.

A common example is water microwaved in a very clean container, past its boiling point. It remains liquid until disturbed by a spoon or teabag(no pun intended), then BOOM. More energy put into the system only superheats the water further, exacerbating the flash vaporization to come.

I'm not an expert in finance or economics, but reading about POMO over the past few months and considering the continued forthcoming infusions, I can't help but see a similarity in the behavior of both systems. The Feds printing has added energy to the system without producing the slightest boil, further superheating a market most agree is overvalued.

Speaking of water, now may be a prudent time to stock up on water and food, the body can go 4-6 weeks without food. You'll be lucky to go one week without water.

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