Guest Post: How Hyperinflation Will Happen

Submitted by Gonzalo Lira

How Hyperinflation Will Happen

Right now, we are in the middle of deflation. The Global Depression we are experiencing has squeezed both aggregate demand levels and aggregate asset prices as never before. Since the credit crunch of September 2008, the U.S. and world economies have been slowly circling the deflationary drain.

To counter this, the U.S. government has been running massive deficits, as it seeks to prop up aggregate demand levels by way of fiscal “stimulus” spending—the classic Keynesian move, the same old prescription since donkey’s ears.

But the stimulus, apart from being slow and inefficient, has simply not been enough to offset the fall in consumer spending.

For its part, the Federal Reserve has been busy propping up all assets—including Treasuries—by way of “quantitative easing”.

The Fed is terrified of the U.S. economy falling into a deflationary death-spiral: Lack of liquidity, leading to lower prices, leading to unemployment, leading to lower consumption, leading to still lower prices, the entire economy grinding down to a halt. So the Fed has bought up assets of all kinds, in order to inject liquidity into the system, and bouy asset price levels so as to prevent this deflationary deep-freeze—and will continue to do so. After all, when your only tool is a hammer, every problem looks like a nail.

But this Fed policy—call it “money-printing”, call it “liquidity injections”, call it “asset price stabilization”—has been overwhelmed by the credit contraction. Just as the Federal government has been unable to fill in the fall in aggregate demand by way of stimulus, the Fed has expanded its balance sheet from some $900 billion in the Fall of ’08, to about $2.3 trillion today—but that additional $1.4 trillion has been no match for the loss of credit. At best, the Fed has been able to alleviate the worst effects of the deflation—it certainly has not turned the deflationary environment into anything resembling inflation.

Yields are low, unemployment up, CPI numbers are down (and under some metrics, negative)—in short, everything screams “deflation”.

Therefore, the notion of talking about hyperinflation now, in this current macro-economic environment, would seem . . . well . . . crazy. Right?

Wrong: I would argue that the next step down in this world-historical Global Depression which we are experiencing will be hyperinflation.

Most people dismiss the very notion of hyperinflation occurring in the United States as something only tin-foil hatters, gold-bugs, and Right-wing survivalists drool about. In fact, most sensible people don’t even bother arguing the issue at all—everyone knows that only fools bother arguing with a bigger fool.

A minority, though—and God bless ’em—actually do go ahead and go through the motions of talking to the crazies ranting about hyperinflation. These amiable souls diligently point out that in a deflationary environment—where commodity prices are more or less stable, there are downward pressures on wages, asset prices are falling, and credit markets are shrinking—inflation is impossible. Therefore, hyperinflation is even more impossible.

This outlook seems sensible—if we fall for the trap of thinking that hyperinflation is an extention of inflation. If we think that hyperinflation is simply inflation on steroids—inflation-plus—inflation with balls—then it would seem to be the case that, in our current deflationary economic environment, hyperinflation is not simply a long way off, but flat-out ridiculous.

But hyperinflation is not an extension or amplification of inflation. Inflation and hyperinflation are two very distinct animals. They look the same—because in both cases, the currency loses its purchasing power—but they are not the same.

Inflation is when the economy overheats: It’s when an economy’s consumables (labor and commodities) are so in-demand because of economic growth, coupled with an expansionist credit environment, that the consumables rise in price. This forces all goods and services to rise in price as well, so that producers can keep up with costs. It is essentially a demand-driven phenomena.

Hyperinflation is the loss of faith in the currency. Prices rise in a hyperinflationary environment just like in an inflationary environment, but they rise not because people want more money for their labor or for commodities, but because people are trying to get out of the currency. It’s not that they want more money—they want less of the currency: So they will pay anything for a good which is not the currency.

Right now, the U.S. government is indebted to about 100% of GDP, with a yearly fiscal deficit of about 10% of GDP, and no end in sight. For its part, the Federal Reserve is purchasing Treasuries, in order to finance the fiscal shortfall, both directly (the recently unveiled QE-lite) and indirectly (through the Too Big To Fail banks). The Fed is satisfying two objectives: One, supporting the government in its efforts to maintain aggregate demand levels, and two, supporting asset prices, and thereby prevent further deflationary erosion. The Fed is calculating that either path—increase in aggregate demand levels or increase in aggregate asset values—leads to the same thing: A recovery in the economy.

This recovery is not going to happen—that’s the news we’ve been getting as of late. Amid all this hopeful talk about “avoiding a double-dip”, it turns out that we didn’t avoid a double-dip—we never really managed to claw our way out of the first dip. No matter all the stimulus, no matter all the alphabet-soup liquidity windows over the past 2 years, the inescapable fact is that the economy has been—and is headed—down.

But both the Federal government and the Federal Reserve are hell-bent on using the same old tired tools to “fix the economy”—stimulus on the one hand, liquidity injections on the other. (See my discussion of The Deficit here.)

It’s those very fixes that are pulling us closer to the edge. Why? Because the economy is in no better shape than it was in September 2008—and both the Federal Reserve and the Federal government have shot their wad. They got nothin’ left, after trillions in stimulus and trillions more in balance sheet expansion—

—but they have accomplished one thing: They have undermined Treasuries. These policies have turned Treasuries into the spit-and-baling wire of the U.S. financial system—they are literally the only things holding the whole economy together.

In other words, Treasuries are now the New and Improved Toxic Asset. Everyone knows that they are overvalued, everyone knows their yields are absurd—yet everyone tiptoes around that truth as delicately as if it were a bomb. Which is actually what it is.

So this is how hyperinflation will happen:

One day—when nothing much is going on in the markets, but general nervousness is running like a low-grade fever (as has been the case for a while now)—there will be a commodities burp: A slight but sudden rise in the price of a necessary commodity, such as oil.

This will jiggle Treasury yields, as asset managers will reduce their Treasury allocations, and go into the pressured commodity, in order to catch a profit. (Actually it won’t even be the asset managers—it will be their programmed trades.) These asset managers will sell Treasuries because, effectively, it’s become the principal asset they have to sell.

It won’t be the volume of the sell-off that will pique Bernanke and the drones at the Fed—it will be the timing. It’ll happen right before a largish Treasury auction. So Bernanke and the Fed will buy Treasuries, in an effort to counteract the sell-off and maintain low yields—they want to maintain low yields in order to discourage deflation. But they’ll also want to keep the Treasury cheaply funded. QE-lite has already set the stage for direct Fed buys of Treasuries. The world didn’t end. So the Fed will feel confident as it moves forward and nips this Treasury yield jiggle in the bud.

The Fed’s buying of Treasuries will occur in such a way that it will encourage asset managers to dump even more Treasuries into the Fed’s waiting arms. This dumping of Treasuries won’t be out of fear, at least not initially. Most likely, in the first 15 minutes or so of this event, the sell-off in Treasuries will be orderly, and carried out with the idea (at the time) of picking up those selfsame Treasuries a bit cheaper down the line.

However, the Fed will interpret this sell-off as a run on Treasuries. The Fed is already attuned to the bond markets’ fear that there’s a “Treasury bubble”. So the Fed will open its liquidity windows, and buy up every Treasury in sight, precisely so as to maintain “asset price stability” and “calm the markets”.

The Too Big To Fail banks will play a crucial part in this game. See, the problem with the American Zombies is, they weren’t nationalized. They got the best bits of nationalization—total liquidity, suspension of accounting and regulatory rules—but they still get to act under their own volition, and in their own best interest. Hence their obscene bonuses, paid out in the teeth of their practical bankruptcy. Hence their lack of lending into the weakened economy. Hence their hoarding of bailout monies, and predatory business practices. They’ve understood that, to get that sweet bail-out money (and those yummy bonuses), they have had to play the Fed’s game and buy up Treasuries, and thereby help disguise the monetization of the fiscal debt that has been going on since the Fed began purchasing the toxic assets from their balance sheets in 2008.

But they don’t have to do what the Fed tells them, much less what the Treasury tells them. Since they weren’t really nationalized, they’re not under anyone’s thumb. They can do as they please—and they have boatloads of Treasuries on their balance sheets.

So the TBTF banks, on seeing this run on Treasuries, will add to the panic by acting in their own best interests: They will be among the first to step off Treasuries. They will be the bleeding edge of the wave.

Here the panic phase of the event begins: Asset managers—on seeing this massive Fed buy of Treasuries, and the American Zombies selling Treasuries, all of this happening within days of a largish Treasury auction—will dump their own Treasuries en masse. They will be aware how precarious the U.S. economy is, how over-indebted the government is, how U.S. Treasuries look a lot like Greek debt. They’re not stupid: Everyone is aware of the idea of a “Treasury bubble” making the rounds. A lot of people—myself included—think that the Fed, the Treasury and the American Zombies are colluding in a triangular trade in Treasury bonds, carrying out a de facto Stealth Monetization: The Treasury issues the debt to finance fiscal spending, the TBTF banks buy them, with money provided to them by the Fed.

Whether it’s true or not is actually beside the point—there is the widespread perception that that is what’s going on. In a panic, widespread perception is your trading strategy.

So when the Fed begins buying Treasuries full-blast to prop up their prices, these asset managers will all decide, “Time to get out of Dodge—now.”

Note how it will not be China or Japan who all of a sudden decide to get out of Treasuries—those two countries will actually be left holding the bag. Rather, it will be American and (depending on the time of day when the event happens) European asset managers who get out of Treasuries first. It will be a flash panic—much like the flash-crash of last May. The events I describe above will happen in a very short span of time—less than an hour, probably. But unlike the event in May, there will be no rebound.

Notice, too, that Treasuries will maintain their yields in the face of this sell-off, at least initially. Why? Because the Fed, so determined to maintain “price stability”, will at first prevent yields from widening—which is precisely why so many will decide to sell into the panic: The Bernanke Backstop won’t soothe the markets—rather, it will make it too tempting not to sell.

The first of the asset managers or TBTF banks who are out of Treasuries will look for a place to park their cash—obviously. Where will all this ready cash go?

Commodities.

By the end of that terrible day, commodites of all stripes—precious and industrial metals, oil, foodstuffs—will shoot the moon. But it will not be because ordinary citizens have lost faith in the dollar (that will happen in the days and weeks ahead)—it will happen because once Treasuries are not the sure store of value, where are all those money managers supposed to stick all these dollars? In a big old vault? Under the mattress? In euros?

Commodities: At the time of the panic, commodities will be perceived as the only sure store of value, if Treasuries are suddenly anathema to the market—just as Treasuries were perceived as the only sure store of value, once so many of the MBS’s and CMBS’s went sour in 2007 and 2008.

It won’t be commodity ETF’s, or derivatives—those will be dismissed (rightfully) as being even less safe than Treasuries. Unlike before the Fall of ’08, this go-around, people will pay attention to counterparty risk. So the run on commodities will be for actual, feel-it-’cause-it’s-there commodities. By the end of the day of this panic, commodities will have risen between 50% and 100%. By week’s end, we’re talking 150% to 250%. (My private guess is gold will be finessed, but silver will shoot up the most—to $100 an ounce within the week.)

Of course, once commodities start to balloon, that’s when ordinary citizens will get their first taste of hyperinflation. They’ll see it at the gas pumps.

If oil spikes from $74 to $150 in a day, and then to $300 in a matter of a week—perfectly possible, in the midst of a panic—the gallon of gasoline will go to, what: $10? $15? $20?

So what happens then? People—regular Main Street people—will be crazy to buy up commodities (heating oil, food, gasoline, whatever) and buy them now while they are still more-or-less affordable, rather than later, when that $15 gallon of gas shoots to $30 per gallon.
 
If everyone decides at roughly the same time to exchange one good—currency—for another good—commodities—what happens to the relative price of one and the relative value of the other? Easy: One soars, the other collapses.

When people freak out and begin panic-buying basic commodities, their ordinary financial assets—equities, bonds, etc.—will collapse: Everyone will be rushing to get cash, so as to turn around and buy commodities.

So immediately after the Treasury markets tank, equities will fall catastrophically, probably within the next few days following the Treasury panic. This collapse in equity prices will bring an equivalent burst in commodity prices—the second leg up, if you will.
 
This sell-off of assets in pursuit of commodities will be self-reinforcing: There won’t be anything to stop it. As it spills over into the everyday economy, regular people will panic and start unloading hard assets—durable goods, cars and trucks, houses—in order to get commodities, principally heating oil, gas and foodstuffs. In other words, real-world assets will not appreciate or even hold their value, when the hyperinflation comes.

This is something hyperinflationist-skeptics never quite seem to grasp: In hyperinflation, asset prices don’t skyrocket—they collapse, both nominally and in relation to consumable commodities. A $300,000 house falls to $60,000 or less, or better yet, 50 ounces of silver—because in a hyperinflationist episode, a house is worthless, whereas 50 bits of silver can actually buy you stuff you might need.

Right now, I’m guessing that sensible people who’ve read this far are dismissing me as being full of shit—or at least victim of my own imagination. These sensible people, if they deign to engage in the scenario I’ve outlined above, will argue that the government—be it the Fed or the Treasury or a combination thereof—will find a way to stem the panic in Treasuries (if there ever is one), and put a stop to hyperinflation (if such a foolish and outlandish notion ever came to pass in America).
 
Uh-huh: So the Government will save us, is that it? Okay, so then my question is, How?

Let’s take the Fed: How could they stop a run on Treasuries? Answer: They can’t. See, the Fed has already been shoring up Treasuries—that was their strategy in 2008—’09: Buy up toxic assets from the TBTF banks, and have them turn around and buy Treasuries instead, all the while carefully monitoring Treasuries for signs of weakness. If Treasuries now turn toxic, what’s the Fed supposed to do? Bernanke long ago ran out of ammo: He’s just waving an empty gun around. If there’s a run on Treasuries, and he starts buying them to prop them up, it’ll only give incentive to other Treasury holders to get out now while the getting’s still good. If everyone decides to get out of Treasuries, then Bernanke and the Fed can do absolutely nothing effective. They’re at the mercy of events—in fact, they have been for quite a while already. They just haven’t realized it.

Well if the Fed can’t stop this, how about the Federal government—surely they can stop this, right?

In a word, no. They certainly lack the means to prevent a run on Treasuries. And as to hyperinflation, what exactly would the Federal government do to stop it? Implement price controls? That will only give rise to a rampant black market. Put soldiers out on the street? America is too big. Squirt out more “stimulus”? Sure, pump even more currency into a rapidly hyperinflating everyday economy—right . . .

(BTW, I actually think that this last option is something the Federal government might be foolish enough to try. Some moron like Palin or Biden might well advocate this idea of helter-skelter money-printing so as to “help all hard-working Americans”. And if they carried it out, this would bring us American-made images of people using bundles of dollars to feed their chimneys. I actually don’t think that politicians are so stupid as to actually start printing money to “fight rising prices”—but hey, when it comes to stupidity, you never know how far they can go.)

In fact, the only way the Federal government might be able to ameliorate the situation is if it decided to seize control of major supermarkets and gas stations, and hand out cupon cards of some sort, for basic staples—in other words, food rationing. This might prevent riots and protect the poor, the infirm and the old—it certainly won’t change the underlying problem, which will be hyperinflation.

“This is all bloody ridiculous,” I can practically hear the hyperinflation skeptics fume. “We’re just going through what the Japanese experienced: Just like the U.S., they went into massive government stimulus—hell, they invented quantitative easing—and look what’s happened to them: Stagnation, yes—hyperinflation, no.”

That’s right: The parallels with Japan are remarkably similar—except for one key difference. Japanese sovereign debt is infinitely more stable than America’s, because in Japan, the people are savers—they own the Japanese debt. In America, the people are broke, and the Nervous Nelly banks own the debt. That’s why Japanese sovereign debt is solid, whereas American Treasuries are soap-bubble-fragile.

That’s why I think there’ll be hyperinflation in America—that bubble’s soon to pop. I’m guessing if it doesn’t happen this fall, it’ll happen next fall, without question before the end of 2011.
 
The question for us now—ad portas to this hyperinflationary event—is, what to do?

Neanderthal survivalists spend all their time thinking about post-Apocalypse America. The real trick, however, is to prepare for after the end of the Apocalypse.

The first thing to realize, of course, is that hyperinflation might well happen—but it will end. It won’t be a never-ending situation—America won’t end up like in some post-Apocalyptic, Mad Max: Beyond Thuderdome industrial wasteland/playground. Admittedly, that would be cool, but it’s not gonna happen—that’s just survivalist daydreams.

Instead, after a spell of hyperinflation, America will end up pretty much like it is today—only with a bad hangover. Actually, a hyperinflationist spell might be a good thing: It would finally clean out all the bad debts in the economy, the crap that the Fed and the Federal government refused to clean out when they had the chance in 2007–’09. It would break down and reset asset prices to more realistic levels—no more $12 million one-bedroom co-ops on the UES. And all in all, a hyperinflationist catastrophe might in the long run be better for the health of the U.S. economy and the morale of the American people, as opposed to a long drawn-out stagnation. Ask the Japanese if they would have preferred a couple-three really bad years, instead of Two Lost Decades, and the answer won’t be surprising. But I digress.

Like Rothschild said, “Buy when there’s blood on the streets.” The thing to do to prepare for hyperinflation would be to invest in a diversified hard-metal basket before the event—no equities, no ETF’s, no derivatives. If and when hyperinflation happens, and things get bad (and I mean really bad), take that hard-metal basket and—right in the teeth of the crisis—buy residential property, as well as equities in long-lasting industries; mining, pharma and chemicals especially, but no value-added companies, like tech, aerospace or industrials. The reason is, at the peak of hyperinflation, the most valuable assets will be dirt-cheap—especially equities—especially real estate.

I have no idea what will happen after we reach the point where $100 is no longer enough to buy a cup of coffee—but I do know that, after such a hyperinflationist period, there’ll be a “new dollar” or some such, with a few zeroes knocked off the old dollar, and things will slowly get back to a new normal. I have no idea the shape of that new normal. I wouldn’t be surprised if that new normal has a quasi or de facto dictatorship, and certainly some form of wage-and-price controls—I’d say it’s likely, but for now that’s not relevant.

What is relevant is, the current situation cannot long continue. The Global Depression we are in is being exacerbated by the very measures being used to fix it—stimulus is putting pressure on Treasuries, which are being shored up by the Fed. This obviously cannot have a happy ending. Therefore, the smart money prepares for what it believes is going to happen next.

I think we’re going to have hyperinflation. I hope I have managed to explain why.

Comments

[Geoff-UK]

It's like a Velobabe, only a cock-ring doesn't talk as much.

[kathy.chamberli...]

NO  y i k e s!

[Joeman34]

GL - While I appreciate your analysis and prespective, I must dismiss it as nothing more than mere speculation and storytelling.  For it will be an event that no one can forecast at this time that will be the pin that pricks the Treasury market balloon.  Your timeline is too specific and depends on too many coincident factors to take place exactly as you describe it.  Because, if it was to happen as you describe, surely the players would have already planned for this scenario. 

The Treasury bubble will burst, and it will make the implosion of the housing market seem a mere bottle-rocket in comparison.  At some point in the future, generally sooner rather than later - IMO, a black swan will fly over the US Treasury market and drop a thermonuclear device that will turn this entire country into one big mushroom cloud.  But at this time, no one can predict exactly how or exactly when it will happen...

[Gonzalo Lira]

Joeman, you came in through the door like you meant business—but then I read your words and I see no argument in your dismissal of my position. Just a lot of huffy words, but no logic, no reasoning, no evidence, no case. 

So please, give me a specific argument against what I've written. I will do my best to try and defend my position—but I need for you to actually object to something I've written, for me to answer you cogently and intelligibly. 

GL

[Joeman34]

My argument is simple, IMO - maybe you missed it...  No one can predict the exact timeline of events that will lead to the popping of the US Treasury bubble and the hyperinflation that will follow.  The players have as much information as you do - have considered all likely scenarios - and have planned accordingly.  It will be an event that no one foresees that will pop the bubble.  A true 'black swan'.

[Geoff-UK]

So planning our future behavior based on our best assessment of current conditions is irrelevant, because a guaranteed Black Swan Event will make a mockery of our assessment?

Should I off myself now, or later?

[mee-mee-mee]

Should we also take into account finite resources. Peak Oil, Peak Lithium, Peak water, etc. 

Even if there was no monetery inflation, the energy / cost required to produce any resource is going up.

Thus it is a form of inflation that needs to be taken into account when we talk about devaluation of a currency.

[ATG]

Stanford ZPG Biologist and his Sierra Club wife lost money betting Julian Simon on scarcity and higher prices:

http://en.wikipedia.org/wiki/Simon%E2%80%93Ehrlich_wager

[Printfaster]

For those of you saying that we will not have hyperinflation until we have runaway interest rates, I say to you:  Check out what your credit card interest rates are.

CC interest rates are high because the ability of the US consumer to pay them back has disappeared.

The only reason Tnote/bond/bill rates are low is because Mr Fed is putting them into the rabbit hole.

Now if I can get Mr Fed to buy up my credit card debt, then all interest rates will be low.

By the way, your stupid captcha has 4 digit answers including the minus sign and is limited to 3 characters.  Can't you people do math?

[ATG]

ZH Captcha still wrong...

[kathy.chamberli...]

only took me three times to get it right this morning, but i had some human help.

[NoLongerABagHolder]

Hyper-Inflation is a low probability event:

http://seekingalpha.com/instablog/475264-tim-ayles/89328-can-the-dollar-...

[redpill]

So is being struck by lightning, but what some chuckleheads claimed the odds were don't matter once you're riding it.

[kathy.chamberli...]

chucklehead

or

knucklehead, HD ?

[No More Bubbles]

It's a NO PROBABILITY event.  So are Chinese workers going to suddenly make 10 times more money?   And if everthing gets 10 times more expensive, everyone is just going to "pay-up" for the things they buy?

The whole idea is preposterous........

[Printfaster]

"Hyper-Inflation is a low probability event"

Over a long enough time period, all low probability events happen.

[Rob Jones]

Excellent article! I think there will be a "Wiley Coyote moment" where after the coyote has run over the edge of a cliff, he stands suspended in mid air, gets a puzzled look, looks around, looks down, and suddenly starts to plunge.

As interest rates continue to fall, Treasuries become riskier and riskier. At some point interest rates will have fallen as low as they can possibly go and people will begin to consider just how risky 1% (or perhaps 0.5%) 10 years' really are. There will be a huge rush to sell as everyone heads for the exits and the Fed will be forced to start buying Treasuries using printed dollars. Inflation will soon follow.

The catalyst for this could come from the default of Japan or one of the weaker Euro countries. Or the panic might start in the US. But when the crisis comes, it will be quick and brutal and it will be worldwide.

[Fix It Again Timmy]

Would one consider the fact that all fiat currencies have gone to zero preposterous?

[Village Idiot]

I had to skip through parts just to catch up, but thanks, good post, good atmosphere.  I heard someone on the of the financial outlets suggesting that as we go forward "the number of possible outcomes increases." I really hope the right door is picked.  Anyway, thanks.

Edit:  I don't really know what "I really hope the right door is picked" means - I think it's a metaphor for " I hope I make lots of money this time AND book my profits.  My advisor didn't tell me about booking profits - that's a good one to know.

[Rusty Shorts]

Man, this is one 'hell of a thread' Tyler. Thanks.

[Rusty Shorts]

http://www.youtube.com/watch?v=ZzlgJ-SfKYE

[Bear]

Unfunded liabilities evaporate over night and my monthly SS check gets me a loaf of bread and a bottle of Excedrin. I think I'll start saving tin foil right now.

[kathy.chamberli...]

PM Excedrin, mon ami.

[aka_ces]

Another scenario, mentioned in several other posts the past few months but curiously not here: the gov. freezes some subset of 401Ks/IRAs/Stocks/BankDeposits and converts them to bonds.

Thoughts ?

[arthur darrell]

its called issuing treasuries by mandate and is confiscation. they can also increase the penalty for early withdrawal to 50%

[The Alarmist]

As I have said before, it will be called PABLUM ... Pension Anticipation Bonds Liquid Upon Maturity, where Maturity = your death and liquid means it flows from your book entry account at the Treasury to the general fund.

[MsCreant]

What I heard you asking is could this stem the treasury outflow and prevent or postpone the described crisis. A reasonable question. I think we would need to know the totals that everyone had in 401.Ks and IRAs to see if there is enough paper in there to sop up the debt. I don't know the answer.

[Howard_Beale]

One man's concept of the future. Big deal. The binomial tree says there are many other ways of anything occurring for those that understand option pricing. This is utterly useless information for me.

Complete nonsense to keep this on top all day Tyler. Seriously.

[Rusty Shorts]

http://www.youtube.com/watch?v=y1ehMrK3itM

[Rusty Shorts]

http://www.youtube.com/watch?v=tN-j4GDqjv4

[Rusty Shorts]

http://www.youtube.com/watch?v=ywfbyj__LKk

[Rusty Shorts]

http://www.youtube.com/watch?v=l74Y_p6or00

[Rusty Shorts]

http://www.youtube.com/watch?v=wlq0lYB3iSM

[Rusty Shorts]

http://www.youtube.com/watch?v=U2R2KXNQR1M

[blindman]

mj kills.

.

http://www.youtube.com/watch?v=BteIwbKU_iQ

[Bagsnatcher]

Beautifully written!

Love every word of it. Thanks!

[hunkofjunk]

Thought provoking thank you

[Roger Knights]

"invest in a diversified hard-metal basket before the event—no equities, no ETF’s, no derivatives."

No gold miner stocks? Why not?

[Geoff-UK]

Uncle Sam physically coming into every house in America to find your physical Precious Metal bullion?  Difficult.

Uncle Sam seizing your equity via an email to your broker and/or bank that you're now the proud owner of a percentage of a Treasury bill in exchange for taking your stock?  Pretty easy.  Especially since we now have a majority of American voters taking more in govt largesse than contributing--you'll have no sympathy when they take your mining stocks.

Obama money!

[TwoShortPlanks]

You know, with so much cyber-trading going on and everything set-up to react to reactions, a simple twitch, and everything will unwind faster than Tyler can post a blog on it.

Bandwidth Bitchez! It will kill us all.

[MsCreant]

Bandwidth (ie JIT tracking and distribution systems) is keeping us (the herd) all alive. Irony, Bitchez.

[Rusty Shorts]

http://www.youtube.com/watch?v=xx86CxKYtg0&feature=related

[Rusty Shorts]

1984

Drop Dead Legs

[godfader]

The author of the article is wrong about the ownership structure of Japanese government bonds. Japanese households (=private individuals) only account for 35 trillion out of a total of 883 trillion yen of Japanese government debt. That's a mere 4%.

The vast majority of the outstanding Japanese debt is held by Japanese banks, insurances and pension funds.

The conclusions he reaches regarding the US not following in Japan's footsteps because of a dominance of Japanese domestic household bond ownership are therefore to be questioned.

[Roger Knights]

The idea of a computer-driven accidental run on Tresuries followed by an automated flight to commodities terminating in a one-day financial collapse is a true black-swan scenario--one that is completely off the map. But that's what enables catastrophes--they are unimaginable, so they aren’t foreseen and forestalled. (Too late now, of course.)

[It is a bargin ...]

Thanks for that, the first article I've read on ZH where I've not had to wiki any word or abbrevation.Good stuff

[kathy.chamberli...]

me three, just his name pronunciation.

i just had to wiki cockring, oh boy oh boy.

[mogul rider]

Deflationista bitchez unite against the hoard of MIT tools who think the algo they have will solve all.

Look sillies

Overcapacity by at least 50%

Wages getting cut everywhere, furloughs everywhere

Money suplly shrinking to god knows where

UST rocking cause it's return of my money not return on my money

Gold goes up even as the dollar strengthens

blah blah blah says the MIT tools.

Well my granddad is stilla live and he clued me into one very salient point that he learned fromt he last great one.

Treasuries, gold, guns, and bitchez.

Hyperinflation my ass, do your goddman historical research and get yoru head out of your ass. It's about saving your family, not your pride

[kathy.chamberli...]

got 2 have the bitches†

[mogul rider]

gold, guns, bitchez, and 3-6 month treasuries

return of my money not return on my money

YUM!

Do your historical research

[ATG]

What do you do with your T Bills if they are turned into consol non-marketable perpetuals like the Social Security Trust?

[arthur darrell]

"One day—when nothing much is going on in the markets, but general nervousness is running like a low-grade fever (as has been the case for a while now)—there will be a commodities burp: A slight but sudden rise in the price of a necessary commodity, such as oil." WHEAT and POTASH nah, i'll take the cash and wait.

[Roger Knights]

IOW, not with a whimper but a bang. Makes sense to me.

[saulysw]

Gonzalo,

Just like to add my voice to those that say thanks for this article. It reads easily, it's logical and it's quite possibly what is in our future. The only thing that's making me hesitant is that perhaps you are overestimating the incompetence, and are underestimating the evil in TPTB. I agree it's a coinflip.

[Gonzalo Lira]

Aphorism#6:

Never ascribe to malice that which can be explained by incompetence.

Check out my aphorisms:

http://gonzalolira.blogspot.com/2010/06/aphorisms.html

GL

[kathy.chamberli...]

yep nice aphorisms? new word for me.

7. If two people know a secret, then it's no secret at all.bitchez

[blindman]

if only one person knows something it isn't

even a secret yet.  it's just a figment of their

imagination,  a thought, an impression.

perhaps a pre-crime.  when someone else knows

it too it's a full blown conspiracy.

[kathy.chamberli...]

fuck U

[blindman]

from where the hostility or do i not

know how to interpret these things?

[blindman]

shit, i thought we were

fucking friends, goddamn it.

it is not like me to use this type

of harsh language, apologies if any

offense was taken.  or, go fuck yourself.

[kathy.chamberli...]

no f u c k i n g going on between us, friend† just sayin'

[blindman]

no shit, you think i wouldn't notice?

.

ps..990

[MsCreant]

Thanks for playing!!!

[blindman]

incompetence is just passive aggressive malice.

[Hephasteus]

Never allow a malicious person to get you to believe they are incompetent.

[LiquidBrick]

Inflation is when the economy overheats: It’s when an economy’s consumables (labor and commodities) are so in-demand because of economic growth, coupled with an expansionist credit environment, that the consumables rise in price. This forces all goods and services to rise in price as well, so that producers can keep up with costs. It is essentially a demand-driven phenomena.

Hyperinflation is the loss of faith in the currency. Prices rise in a hyperinflationary environment just like in an inflationary environment, but they rise not because people want more money for their labor or for commodities, but because people are trying to get out of the currency. It’s not that they want more money—they want less of the currency: So they will pay anything for a good which is not the currency.

Most valuable gem on ZH I've ever read. Thank you.

[The Alarmist]

if you look past the fact that the first part is somewhat wrong. Demand pull inflation is temporary in nature and self-correcting due to the arbitrage opportunity it presents.  Inflation is a mismatch (overmatch) of the money supply to real value in the economy, caused for example by easy money due to easy credit.

[cdub]

As much as I agree with the potential market actions in the premise, I'm not confident the median consumer has sufficient liquidity to drive the hyperinflation leg of the theoretical.  Consumers need to have available cash to drive the conversion.

Most of the very recent savings seems to have gone toward reducing short-term borrowings (excepting of course most of us who care enough to read blogs like ZH).  If consumers can only drive inflation at the rate of their paychecks, won't that significantly dampen conversion driven hyper-inflation?

[The Alarmist]

Well, there are also a few $$$ overseas that might come home to roost.

[Roger Knights]

Oops -- double post

[MsCreant]

925 posts now, come on, debate me bitchez. Argue. This is about gunning the numbez bitches. Vroom.

926

[MsCreant]

927 Bitchez. You know I'm a troll, you know you want to argue.

[MsCreant]

929.

[blindman]

i don't think that 929 belongs there, more like 926.

perhaps a typo.

[kathy.chamberli...]

you guyz are just buzz_ed out†

[blindman]

oh yea...

.

http://en.wikipedia.org/wiki/Inflation_in_the_Weimar_Republic

.

Stabilization

When the new currency, the Rentenmark, replaced the worthless Reichsbank marks on November 16, 1923 and 12 zeros were cut from prices, prices in the new currency remained stable. The German people regarded this stable currency as a miracle because they had heard such claims of stability before with the Notgeld (emergency money) that rapidly became worthless. The usual explanation was that the Rentenmarks were issued in a fixed amount and were backed by hard assets such as agricultural land and industrial assets, but what happened was more complex than that.

In August 1923, Karl Helfferich proposed a plan to issue a new currency (roggenmark) backed by mortgage bonds indexed to market prices (in paper Marks) of rye grain. His plan was rejected because of the greatly fluctuating price of rye in paper Marks. The Agriculture Minister Hans Luther proposed a different plan which substituted gold for rye and a new currency, the Rentenmark, backed by bonds indexed to market prices (in paper Marks) of gold.^[8]

The gold bonds were defined at the rate of 2,790 gold Marks per kilogram of gold, which was the same definition as the pre-war goldmarks. The rentenmarks were not redeemable in gold, but were only indexed to the gold bonds. This rentenmark plan was adopted in monetary reform decrees on October 13-15, 1923 that set up a new bank, the Rentenbank controlled by Hans Luther who had become the new Finance Minister.

After November 12, 1923, when Hjalmar Schacht became currency commissioner, the Reichsbank, the old central bank, was not allowed to discount any further government Treasury bills, which meant the corresponding issue of paper marks also ceased.^[9]. Discounting of commercial trade bills was allowed and the amount of Rentenmarks expanded, but the issue was strictly controlled to conform to current commercial and government transactions. The new Rentenbank refused credit to the government and to speculators who were not able to borrow Rentenmarks, because Rentenmarks were not legal tender.^[10] When Reichsbank president Rudolf Havenstein died on November 20, 1923, Schacht was appointed president of the Reichsbank.

By November 30, 1923, there were 500 million Rentenmarks in circulation, which increased to 1000 million by January 1, 1924, and again to 1,800 million Rentenmarks by July 1924. Meanwhile, the old paper Marks continued in circulation. The total paper Marks increased to 1,211 quintillion in July 1924 and continued to fall in value to one third of their conversion value in Rentenmarks.^[11]

The monetary law of August 30, 1924 permitted exchange of each old paper 1,000,000,000,000 Mark note for one new Reichsmark, equivalent in value to one Rentenmark.

[blindman]

and this...

.

Why does fiat money seemingly work ?

written by Trotsky, edited by Mish

This is part 2 of a 2 part series. Part 1 was Misconceptions about Gold.

.

http://globaleconomicanalysis.blogspot.com/2007/06/why-does-fiat-money-seemingly-work.html

.

" Demand for fiat money was created by its acceptance for payment of taxes.

What we have here, is really no less than the explanation for why pieces of paper with some ink slapped on them are not a priori laughed out of the room, as we proposed would happen with Pete’s papyrus promises in paragraph one. The demand for this paper is established by its acceptance for the payment of taxes.

The two major pillars of the system are based on coercion: directly via the legal tender laws (which decree that fiat currency must be used/accepted for all payments of debt, public or private) and indirectly via the value imputed to government debt which rests on the faith in the government’s ability to extort enough future tax revenue to be able to repay its debt.

This latter point is extremely important for the system to function. Government bonds are the tally sticks of our age, and serve as the main ‘backing’ of bank notes and their digital counterparts in circulation. They are what is tying the government and the banking system together, via the central bank.

The central bank has the power to ‘monetize’ such debt by creating money out of thin air, however, this roundabout way of going about it is an essential part of the confidence game, the creation of the illusion of value." ...

[blindman]

and the lingering question is what happens to

"investment" in production  when all the money

is slashing about in the gambling casino and what will

be produced that will demand all those useless paper notes?

useless products and production capacity, means of production,

"assets" will become worthless or cheap....deflation.  but they will

be valuable to some, the one's who think differently,   possibly if 

it, recovery, is tolerated by "authority".   heresy will finally be tolerated, needed. 

[tradeking13]

I will bet anyone $1 million that we don't see hyperinflation.

[blindman]

that is funny.

what time frame?

[Hulk]

last word in:

hysterical!

[freshanus]

I don't agree with the motives you've assigned to the actors in this play, or your conclusion, but I do appreciate it when a hyperinflationist actually takes the time to draw out the argument in detail.  Hoping for more articles such as this.

[boogey_bank]

Hi Gonzalo Lira and my compliments for what I think is one of your best posts. The best indeed is the one regarding Corporate anarchism.

I will not take up a position in favour or against hyperinflation, the debate about this issue on every financial blog always ends as a religion war. 

My question is: why the only goal people want to achieve is being right?

Why talking either of hyperinflation or hyperdeflation alone?

Why playing Nostradamus calling the next doom episode that will happen?

The doom is already upon us. It's the Rollercoaster that is killing us. It's the jobless recovery. It's the GS, BP (fill it with your favorite global corporation...) anarchism.

This is the perfect storm and every kind of wind will harm us:

The house bubble burst (deflation).

The drop in the velocity of money (deflation).

The BDI drop (deflation).

The carry trade unwind (deflation).

The oil price spikes (inflation).

The commodities price spikes (inflation).

The spike in local taxes (inflation).

The rise in food and energy bill (inflation).

The coming derivative monster implosion (big deflation).

The coming buying frenzy of whealthy people and whealthy nations (big inflation).

And finally the scariest of all winds: the coming explosion in the bid ask spread in most markets...

Try to imagine all the hyperinflation buddies on one side trying to sell an  item and the whole deflationist buddiest packed on the ask side.

What is worst of hyperinflation?

The end of the whole market for some goods.

Could this happen ?

[MsCreant]

"The end of the whole market for some goods."

Logistics-- I have always believed this is the real problem. Between over burdened courts and people waiting for their money from debt owed them, they will go bankrupt themselves, and businesses everywhere will go under.  It will be difficult for things to be cleanly settled for years, if ever. I laugh at China buying stuff here. They will have to send soldiers to defend it, or pay some of us to defend it for them. They confiscate westerners stuff over there when it suits them. Who owns what will become really dubious in the great, erratic, spasmodic, unwind.

[blindman]

http://www.youtube.com/watch?v=ddtTbWZbEXY

.  driftin'

[MsCreant]

This was nice. No time to sample all.

So blindman does NOT see hyperinflation...

[blindman]

?

i saw it already, we all did.  i call it the end of the

20th century.  everything happens faster with this

digital age,  things happen before they happen.

before it happens, it is over, kind of thing.  we already

spent fiat credit to the securitized limit and bailed out

the architects of doom, what more can we inflate with?

somebody somewhere will have to take losses for their

speculation and there is plenty of room for those losses

to be spread out.  as they are people will feel it and then be

inspired to look for responsible parties.  many people demanding

some form of "justice".  it will be ugly and the more the

"system" messes with the remaining purchasing power of these

very angry "masses" the more hostility will be aroused.  ?

i see hyperinflation as a terminal symptom of a circulatory

disease, not that interesting or important.  the important thing is

the problem with the circulation.  that is the part that needs

to be fixed or death will result.   the more we focus on the

symptom the less we look at the cause which is the way the

thieves would have it.  they are just stealing the treasury, the government,

the law etc..  buying justices, scientific organizations, the medical

community, politicians etc... 

who cares what the price is said to be when no one can afford to pay

any price because they have no money and no credit.   who can

produce and distribute into this environment?  for what?  there

has to be a currency of some kind to replace a disgraced currency

that will be discarded to the bin of hyperinflation, ( waste paper ).

but why would anyone print that waste paper when we have digital

credit that doesn't work anymore.

i'm blind.  i don't see anything.

.

By late 1923, the Weimar Republic of Germany was issuing two-trillion Mark banknotes and postage stamps with a face value of fifty billion Mark. The highest value banknote issued by the Weimar government's Reichsbank had a face value of 100 trillion Mark (100,000,000,000,000; 100 billion on the long scale).^[10][11]. At the height of the inflation one U.S. dollar was worth 4 trillion German marks. One of the firms printing these notes submitted an invoice for the work to the Reichsbank for 32,776,899,763,734,490,417.05 (3.28×10¹⁹, or 33 quintillion) Marks.^[12]

.

John Maynard Keynes described the situation in The Economic Consequences of the Peace: "The inflationism of the currency systems of Europe has proceeded to extraordinary lengths. The various belligerent Governments, unable, or too timid or too short-sighted to secure from loans or taxes the resources they required, have printed notes for the balance."

.

keyword:  belligerent governments.  here the problem.

.

hyperinflation of a "currency" occurs because there is some other functioning "currency" that it can be deemed to be inflated against,

especially with fiat currency because none have any intrinsic value.

they are all really worthless.  what is valuable is the intangible ,

that which is implied or hinted at or referred to.   strange world,  man.

.

like i said, i'm blind.  i see very little.

[kathy.chamberli...]

i might B driftin too, don't mind much now, cause i know how to

F L O A T.

[blindman]

http://www.youtube.com/watch?v=VjB3AuKkH_g

.

"the universe has us surrounded." swamib1

[blindman]

http://www.youtube.com/watch?v=gVAnlke_xUY

.

the mystic

[kathy.chamberli...]

B I N G O

thanks for the show.

[The Alarmist]

Why should MsCreant have all the fun.

954, bitchez, and going for 1000.

Now that is hyperinflation.

[MsCreant]

Now you got the spirit!!!

[Mr Lennon Hendrix]

John Hancock'd.

1000 and beyond!!!!!!

[kathy.chamberli...]

ya know lennon, if wikipedia has something up, does that mean it isn't considered pornography?

like handcock'd or cockring?

[Mr Lennon Hendrix]

I am here because MsCreant told me to be, but I read the piece, so I will add....

Great post; my thoughts on equities is the same as my thoughts on everything...some will go to ZERO, some will skyrocket.  You know the one's!

I do think currenseas will hyperinflate, as it has already begun.  Look for the doelarr to lose reserve currensea status in the next two years.  Before that happens, it will lose 1/3 of its value YoY-this mirroring RE.  Precious metals will become one of the only stores of wealth, and trust no banker to hold it.  Confiscation will not be a door to door, but maybe a bank deposited one.  Be your own banker, and just like banks, hold gold as your chief.

[Turd Ferguson]

Me too but I must revise and extend:

There may now be over 1000 comments but you must throw out the 100 or so incomprehensibly stupid posts from Johnny "Jizz" Bravo. So, really, we're only about 900.

[MsCreant]

No, Johnny's posts embody the essence of hyperinflation. We are, as The Alarmist suggested, hyperinflating the comments section. Extra points that some of these comments are worthless...This is our collective art.

[Rusty Shorts]

999

[Grifter]

Because MsCreant sez so.  No sleep 'til 1,000...

[The Alarmist]

Isn't this how the dark ages began ... everything of value got carted away by the guys with the most weapons and a posse to do the carrying. Buying gold is a nice sentiment, but using your MAC-10 to take someone else's when you need it is probably more utilitarian.

BTW, 979 and counting.

[A_MacLaren]

Oh crap, this came out while I was snoozing...

So I'll post a comment, just because it hasn't, uhhh, stirred a braincell, yet.

"Comment.  'Nuff said."

[blindman]

http://www.youtube.com/watch?v=W-WO8K9Ie8c&feature=related

.

991.....

.

notice the momentum,  that intangible.  indescribable.

immaterial and all that...

there is an inevitable element at play.  see it.?

must be a number thing?     ha.......angle thing.......

[truont]

So, deflationists and hyperinflationists are basically predicting the same set of conditions.

Deflationists are really focusing on the deflation of REAL money (gold)--though they are confused a bit and think it is the FRN will deflate.  Fat chance, long term.  I can't wait for Denninger to admit he is wrong...

Hyperinflationists are really focusing on the growing worthlessness of illusory currency (FRN), and the deflation of real money (gold).

So, everyone agrees for the most part.

[blindman]

June 25, 2010
The Choice ...................... 

.....

"..We now must demand, a priori, Accord & Reason upon which to build human civilization. All that needs to be said has been said."

Posted by PeterJB at 6:38 AM . . http://verbewarp.blogspot.com/ . . and ..993  ?

[MsCreant]

On my counter yours read 995 which makes this one 996.

[blindman]

http://www.youtube.com/watch?v=ZX0g0o9YVww

.

worthless attacks!  aka...digital art.   investment opportunity

for the mess age.

http://www.youtube.com/watch?v=QSqgEH2l_5g

dummy. 

[Rusty Shorts]

I believe B9K9 posted this;

"Exactly. Which is why most people I know think they can ignore the math and everything will be okay. They fight the very idea that there is a real decline in quality of life, that it is permanent, and that it will continue to deteriorate. As Michele added above: "Apres moi, le deluge." Everyone else will get screwed but not me, I got mine.
It's a tsunami. Previous paradigms no longer apply.
Teevee, junkfood-addled Amerika could not withstand a currency collapse. The Black Plague made human capital valuable again - in modern application we have tens of millions on the gov't teat with no recovery.
http://www.martinarmstrong.org/files/Are-We-Running-Out-of-Other-People-...
All those 99-weekers waiting for jobs. What jobs? Doing what? The service economy is a fiat lie and our infrastructure is based on a constant flow of cheap oil.
Mortgage? WTF for? Prices are artificially high because of 1) shadow inventory 2) who can say they will be employed in their profession to make payments for 30 years anymore - no man is an island.
Stay nimble. Stay quick. This is no time for white picket fences. Going back to the sad, miserable, drugged-up state of our Nation it ain't a stretch to imagine that the Mandarin speakers are planning to make use of their raw (war) materials and spouse-less young men for "real estate acquisition". Hasn't anyone read a history book around here? The Chi-Coms have openly spoken of how they deserve North America. This kind of scenario isn't discussed because it is the worst-case scenario outside of nuc-bio-chem warfare, and then subsequent invasion.
"Oh, but China needs us and we need them." Bullshit. Everyone is buying time. The Chinese aren't stupid and they know they aren't getting their money back. Some finance guy over there said US bonds are not safe medium and long. In other words "We are trying to buy as much time as possible to acquire tangible assets that matter!"
All the survivalists from the 70's were wrong because they didn't understand the "Nixon" trick/effect of taking us off the gold standard and taking paper money to its extreme utility. It would have been better to face this shitstorm back then. Back when Americans were still eating meals that had real nutrition, no obesity epidemic, actual human interaction, strong infrastructure with less bureaucracy. Today it's all bloated beyond recognition.
When the Fed finally makes a move that has a visible and real effect on Amerika even rationing of supplies won't keep the interurban areas content. We are at the brink of a f.u.n.d.a.m.e.n.t.a.l. shift. Be far away from the millions that require a weekly check for their very survival. Do you think the owners of the Fed care if millions starve?"

[MsCreant]

Who will post 1,000? Not me...I am 999.

[kathy.chamberli...]

Mazel tov - Wikipedia, the free encyclopedia

congratulations

[blindman]

http://www.zerohedge.com/article/guest-post-how-hyperinflation-will-happen

.

it be said this was 1000.  no other.

[Frank Owen]

To collect your prize stop by the ZH main office... but goodluck finding it blindman :)

[blindman]

the prize is the universal loop,  it exists inside

all of creation.  here, there and everywhere.

.

check the link, thanks.

[lizzy36]

am i 1000?

likely not. my timing always sucks. 

[Apocalypse Now]

Just a few notes to add to the discussion:

• We are already buying our own debt (monitization)
• The Fed = TBTF Banks due to share ownership (coordinated in fact across countries - central banks are franchises)
• Germany was predominately unionized with wage inflation adjustments (like COLA) that adjusted constantly
  • This caused a self reinforcing hyper-inflation loop as the more they printed the higher wages increased
  • Comparisons to Germany or Zimbabwe are poor apples to oranges due to reserve status, military, oil
  • Our COLA adjustment for SS was ZERO like our interest rates and .GOV workers received 2% 2010 wage increases
• Bush said our financial system was a house of cards and Biden said we need to spend or we go bankrupt
• The banking plan may be to let everyone go broke and acquire their real assets through foreclosure in deflation - followed by hyper-inflation to wipe away their debts
• If there is hyper-inflation it should happen in other countries first as an indicator and would only happen after losing reserve currency status
• Exeters pyramid describes the flow out of paper money and into hard assets with gold at the bottom when the system becomes a house of paper cards from derivatives.  We currently have much more "wealth" or claims on assets or future cash flow streams than real assets.  Once trust collapses (via counterparty risk) there could be a monumental attempt at exiting digital digits and acquiring real assets.  My only caveat to the price of those goods increasing is that much of the paper wealth could just dissappear overnight.  In other words, the market cap of the stock market could theoretically go to zero over night and that wealth could just dissappear if selling overtakes bids (with huge bid/ask spreads).  In that scenario, those funds would not be available to drive up the prices of real/hard assets.

[Dr. Sandi]

Over 1000 posts on a single thread here at ZH is MY DEFINITION of hyperinflation!

[blindman]

http://www.youtube.com/watch?v=h-s8JFTt-vo&NR=1

[DeltaDawn]

We are all going over the fall together, some of us in better boats.

[kathy.chamberli...]

life boat

[alexwest]

totally crap.. its not SF..

before writing idiot article learn history.. 
there are only handful cases when REAL HYPERINFLATION happened..

#1 after/during war.. government prints money to pay for .. its WEIMAR Germany.

#2 when closed before country opens up .. Russia for example.. Russian rubles became overnight worthless cause 
the were not backed by real stuff...

#3 because of overall economical depression government prints money to pay salaries etc etc..
Zimbabwe...

my guess combination of 1+3 will cause hyperinflation in USA

or you think this time is different..??
alex

[paladin]

Gonzalo Lira

Harry Schultz' International Harry Schultz Letter is going to closs this year.

he had this to say...

Schultz specializes in big ideas. Currently, he is fascinated by the possibility that hyperinflation might be triggered quickly, by a sort of global financial traffic accident.

Schultz devotes a lot of his current letter to summarizing an account of how hyperinflation could happen by Gonzalo Liro on Zerohedge.com

http://jsmineset.com/2010/09/17/in-the-news-today-654/

[kathy.chamberli...]

1020 posts on this thread. WOWzeeWOW wow

ZH is the complete package for me anyway, maybe i can find a date.

[Herry12]

Thanks for such a great post and the review, I am totally impressed! Keep stuff like this coming!...
cheap site hosting
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[hugomarch]

Housing prices do collapse when money becomes worthless.  People do sell real estate for next to nothing.  It's all true. 

[designerhandbag...]

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