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Guest Post: Hyperinflation, Part II: What It Will Look Like
Submitted by Gonzalo Lira
Hyperinflation, Part II: What It Will Look Like
I usually don’t do follow-up pieces to any of my posts. But my recent longish piece, describing how hyperinflation might happen in the United States, clearly struck a nerve.
It was a long, boring, snowy piece of macro-economic policy speculation, discussing Treasury yields, Federal Reserve Board monetary reaction, and the difference between inflation and hyperinflation—but considering the traffic it generated, I might as well been discussing relative breast size in the porn industry. With pictures.
Essentially, I argued that Treasury bonds are the New and Improved Toxic Assets. I argued that, if there was a run on Treasuries, the Federal Reserve—in its anti-deflationary zeal, and its efforts to prop up bond market prices—would over-react, and set off a run on commodities. This, I argued, would trigger hyperinflation.
The disproportionate attention my post garnered is indicative of people’s current fears. As I’ve said before, people aren’t blind or stupid, even if they often act that way. People are worried—they’re worried about the current state of affairs: Massive quantitative easing, toxic assets replaced by the full faith and credit of the U.S. government in the shape of Treasuries, fiscal debt which cannot possibly be repaid, a second leg down in the Global Depression that seems endless and only getting worse—people are scared. Many readers gave me quite a bit of useful feedback, critiques, suggestions and comments on the piece—clearly, what I was discussing touched on a deeply felt concern.
However, there were two issues that many readers had a hard time wrapping their minds around, with regards to a hyperinflationary event:
The first was, Where does all the money come from, for hyperinflation to happen? The question wasn’t put as baldly as that—it was wrapped up in sophisticated discussions about M1, M2 and M3 money supply, as well as clever talk about the velocity of money—the acceleration of money—the anti-lock brakes on money. There were even equations thrown around, for good measure.
But stripped of all the high-falutin’ language, the question was, “Where’s all the dough gonna come from?” After all, as we know from our history books, hyperinflation involves people hoisting bundles and bundles of high-denomination bills which aren’t worth a damn, and tossing them into the chimney—’cause the bundles of cash are cheaper than firewood. If the dollar were to crash, where would all these bundles of $100 bills come from?
The second question was, Why will commodities rise, while equities, real estate and other assets fall? In other words, if there is an old fashioned run on a currency—in this case, the dollar, the world’s reserve currency—why would people get out of the dollar into commodities only, rather than into equities and real estate and other assets?
In this post, I’m going to address both of these issues.
Apart from what happened with the Weimar Republic in the 1920’s, advanced Western economies have no experience with hyperinflation. (I actually think that the high inflation that struck the dollar in the 1970’s, and which was successfully choked off by Paul Volcker, was in fact an incipient bout of commodity-driven hyperinflation—but that’s for some other time.) Though there were plenty of hyperinflationary events in the XIX century and before, after the Weimar experience, the advanced economies learned their lesson—and learned it so well, in fact, that it’s been forgotten.
However, my personal history gives me a slight edge in this discussion: During the period 1970–’73, Chile experienced hyperinflation, brought about by the failed and corrupt policies of Salvador Allende and his Popular Unity Government. Though I was too young to experience it first hand, my family and some of my older friends have vivid memories of the Allende period—vivid memories that are actually closer to nightmares.
The causes of Chile’s hyperinflation forty years ago were vastly different from what I believe will cause American hyperinflation now. But a slight detour through this history is useful to our current predicament.
To begin: In 1970, Salvador Allende was elected president by roughly a third of the population. The other two-thirds voted for the centrist Christian Democrat candidate, or for the center-right candidate in roughly equal measure. Allende’s election was a fluke.
He wasn’t a centrist, no matter what the current hagiography might claim: Allende was a hard-core Socialist, who headed a Hard Left coalition called the Unidad Popular—the Popular Unity (UP, pronounced “oo-peh”). This coalition—Socialists, Communists, and assorted Left parties—took over the administration of the country, and quickly implemented several “reforms”, which were designed to “put Chile on the road to Socialism”.
Land was expropriated—often by force—and given to the workers. Companies and mines were also nationalized, and also given to the workers. Of course, the farms, companies and mines which were stripped from their owners weren’t inefficient or ineptly run—on the contrary, Allende and his Unidad Popular thugs stole farms, companies and mines from precisely the “blood-thirsty Capitalists” who best treated their workers, and who were the most fair towards them.
Allende’s government also put UP-loyalists in management positions in those nationalized enterprises—a first step towards implementing a Leninist regime, whereby the UP would have “political control” over the means of production and distribution. From speeches and his actions, it’s clear that Allende wanted to implement a Maoist-Leninist regime, with himself as Supreme Leader.
One of the key policy initiative Allende carried out was wage and price controls. In order to appease and co-opt the workers, Allende’s regime simultaneously froze prices of basic goods and services, and augmented wages by decree.
At first, this measure worked like a charm: Workers had more money, but goods and services still had the same old low prices. So workers were happy with Allende: They went on a shopping spree—and rapidly emptied stores and warehouses of consumer goods and basic products. Allende and the UP Government then claimed it was right-wing, anti-Revolutionary “acaparadores”—hoarders—who were keeping consumer goods from the workers. Right.
Meanwhile, private companies—forced to raise worker wages while maintaining their same price structures—quickly went bankrupt: So then, of course, they were taken over by the Allende government, “in the name of the people”. Key industries were put on the State dole, as it were, and made to continue their operations at a loss, so as to satisfy internal demand. If there was a cash shortfall, the Allende government would simply print more escudos and give them to the now State-controlled companies, which would then pay the workers.
This is how hyperinflation started in Chile. Workers had plenty of cash in hand—but it was useless, because there were no goods to buy.
So Allende’s government quickly instituted the Juntas de Abastecimiento y Control de Precios (“Unions of Supply and Price Controls”, known as JAP). These were locally formed boards, composed of loyal Party members, who decided who in a given neighborhood received consumer products, and who did not. Naturally, other UP-loyalists had preference—these Allende backers received ration cards, with which to buy consumer goods and basic staples.
Of course, those people perceived as “unfriendly” to Allende and the UP Government either received insufficient rations for their families, or no rations at all, if they were vocally opposed to the Allende regime and its policies.
Very quickly, a black market in goods and staples arose. At first, these black markets accepted escudos. But with each passing month, more and more escudos were printed into circulation by the Allende government, until by late ’72, black marketeers were no longer accepting escudos. Their mantra became, “Sólo dólares”: Only dollars.
Hyperinflation had arrived in Chile.
(Most Chileans, myself included, find ourselves both amused and irritated, whenever Americans self-righteously claim that Nixon ruined Chile’s economy, and thereby derailed Allende’s “Socialist dream”. Yes, according to Kissinger’s memoirs, Nixon did in fact tell the CIA that he wanted Chile’s economy to “scream”—but Allende did such a bang-up job of fucking up Chile’s economy all on his own that, by the time Richard Helms got around to implementing his pissant little plots against the Chilean economy, there was not much left to ruin.)
One of the effects of Chile’s hyperinflation was the collapse in asset prices.
This would seem counterintuitive. After all, if the prices of consumer goods and basic staples are rising in a hyperinflationary environment, then asset prices should rise as well—right? Equities should rise in price—since more money is chasing after the same number of stock. Real estate prices should rise also—and for the same reason. Right?
Actually, wrong—and for a simple reason: Once basic necessities are unmet, and remain unmet for a sustained period of time, any asset will be willingly and instantly sacrificed, in order to meet that basic need.
To put it in simple terms: If you were dying of thirst in the middle of the desert, would you give up your family heirloom diamonds, in exchange for a gallon of water? The answer is obvious—yes. You would sacrifice anything and everyting—instantly—in order to meet your basic needs, or those of your family.
So as the situation in Chile deteriorated in ’72 and into ’73, the stock market collapsed, the housing market collapsed—everything collapsed, as people either cashed out of their assets in order to buy basic goods and staples on the black market, or cashed out so as to leave the country altogether. No asset class was safe, from this sell-off—it was across-the-board, and total.
Now let’s return to the possibility of hyperinflation in the United States:
If there were a sudden collapse in the Treasury bond market, I argued that sellers would take their cash and put them into commodities. My reasoning was, they would seek a sure store of value. If Treasury bonds ceased to be that store of value, then people would invest in the next best thing, which would be commodities, especially precious and industrial metals, as well as oil—in other words, non-perishable commodities.
Some people argued this point with me. They argued many different approaches to the problem, but essentially, it all boiled down to the argument that commodities and precious metals have no intrinsic value.
Actually, I think they’re right. In a strict sense, only oxygen, food and water have intrinsic value to human beings—everything else is superfluous. Therefore the value of everything else is arbitrary.
Yet both gold and silver have, historically, been considered valuable. Setting aside a theoretical or mathematical construct that would justify the value of gold and silver, look at it from a practical standpoint: If I went to a farmer with five ounces of silver, would he give me a sack of grain? Probably. If I offered him an ounce of gold for two or three pigs, would he give them to me? Again, probably.
Where there is a human society, there is a need to exchange. Where there is a need to exchange, a medium of exchange will soon appear. Gold and silver (and copper and brass and other metals) have served that purpose for literally millennia, but then they were replaced by paper.
Right now, there are two forms of paper currency: Actual dollars, and Treasury bonds. One is a medium of exchange, the other a store of value.
If Treasuries—the store of value—were to collapse in price, and the Fed—as I predict—tried everything in its power to at least initially prop up their prices, would those sellers who managed to get out of Treasuries in time then turn around and invest in even dodgier bits of paper, like stocks? Or REIT’s? Or even precious metal ETF’s?
No they would not: They would get out of Treasuries—supposedly the “safest” investment there is—and get into something even safer—something even more tangible: Actual commodities. Not ETF’s, not even futures (or anything else that entails counterparty risk)—sellers of Treasuries would get into actual, hard commodities. Because if suddenly even the safest of all investment vehicles is now unsafe, do you really want to get behind the wheel of an even more unsafe vehicle, like stocks or corporate bonds or ETF’s? I mean, c’mon: If Treasuries crash, what else might crash?
That’s why people in a Treasury panic would buy commodities. This ballooning of non-perishable commodities would be as a means to store value. Because that’s what people do in a panic—they batten down the hatches, and go into what’s safest. When the stock markets tanked in the Fall of ’08, where did all that sellers’ cash go? To Treasuries—because it was then considered the safest store of value. Commodities suffered in comparison—gold took a bit of a hit, as did the other precious metals—but Treasuries ballooned as the equities markets tanked.
But if Treasuries—the ultimate store of value—now tanked? If the last sure-thing in paper-based stores of value took a hit, where would people go to both store value, and have ready access to that value?
Commodities. And this rush to commodities, I argued, would trigger hyperinflation.
Now, I said I would answer two questions—one was why commodities would outpace all other asset classes in a Treasury panic and subsequent hyperinflation. The other question was, “Where’s all the dough to feed my fireplace gonna come from, in a hyperinflationary event?”
The first wave of dollars in a hyperinflationary event will come from people’s savings accounts.
If Treasuries tank, and the markets all barrel into commodities, then prices will rise for regular consumers—this should not be a controversial inference. What would consumers do, with suddenly much higher gas prices, and soon much higher food prices? Simple: They’ll bust open their piggy banks, whatsoever those piggy banks might happen to be: 401(k)s, whatever equities they might have, etc.
But if the higher consumer prices continue—or become worse—what will happen to the 320 million American consumers? They’ll start buying more gas now, rather than wait around for tomorrow—and the market will react to this. How? Two way: Prices of commodities will rise even further—and asset prices will fall even lower.
Again, the man in the desert, the diamonds, and the water: If American consumers are getting hit at the gas station and the supermarket, they’ll start selling everything so as to buy gas, heating oil (most especially) and foodstuffs. The Treasury panic will thus be transfered to the average consumer—from Wall Street to Main Street by way of $15 a gallon gas prices, and $10 a gallon heating oil prices.
All other consumer prices would soon follow the leads of gas, heating oil and food.
In the above bit of Chilean history, I described how the Allende government printed up escudos to make up for the shortfall in nationalized businesses that was produced by their policy of hiking wages, while at the same time fixing prices.
This is a completely different way to hyperinflation than the way I envision it for the American economy—but once the American economy gets there, the effects of hyperinflation will be exactly the same: People will try to get out of assets in order to get hold of commodities. To get all eccy about it, money velocity would approach infinity, as money supply remains (at first) fixed, yet in the panic over commodities, aggregate demand as measured by aggregate transactions goes vertical.
Would there be Federal government intervention of some sort? Most definitely—people would be screaming for it. Would food rationing be implemented? Probably, and probably by way of the current Food Stamps program. Troops on the streets, protecting gas stations and supermarkets? Curfews to prevent looting? Palliative dollar printing? Yes, yes, and very likely yes.
That last bit—palliative dollar-printing: That’s the key. When palliative dollar-printing happens, it will be the final stages of hyperinflation—it’s when sensible people ought to realize that the crisis is almost over, and that a new normal will soon appear. But this stage will be fucking awful.
Palliative dollar printing will take place when the Federal government simply runs out of options. Smart economists will get on CNBC and argue that, “The velocity of money is destroying the economy—we must expand the currency base!” It’ll sound logical, but palliative money-printing will be a policy option born out of panic. The final policy option. It won’t be done for evil conspiratorial reasons—always remember Aphorism #6 (“Never ascribe to malice what can be explained by incompetence.”). It’ll be carried out because of fear and panic.
A whole boatload of fools in Washington, on seeing this terrible commodity-driven crisis unfold, with consumer prices shooting the moon, will scream for dollars to be printed—and their rationale will be perfectly reasonable, I can practically hear it now: “We've got to get cash into the hands of the average American citizen, so he or she can buy food and heating oil for their families! We can’t let Americans starve and freeze to death!”
Palliative money-printing will take place—hence the average American family will likely be using bundles of $100 bills to fire up the chimney that hyperinflationary winter.
Hoo-Ah.
Now, this fairly Apocalyptic scenario is simultaneously horrifying, and exciting as all get out. Hell, why do you think disaster movies are so popular? Shit blowing up is way cool! That's why Roland Emmerich gets paid the big bucks, God bless ‘im.
But for sensible people, Apocalypse is a distraction—it’s not the main event. For sensible people who want to be prepared, Apocalypse represents opportunities.
A true story: In ’73, at the height of the Allende-created hyperinflation, an uncle of mine, who was then a college student, was offered an apartment in exchange for his car. That’s right—an apartment. He owned a crappy little Fiat 147—a POS if ever there was such a thing—but cars in Chile in the middle of that hyperinflation were so scarce, and considered so valuable, that he was offered an apartment in exchange. To this day, my uncle still tells the story—with deep regret, because he didn’t follow through on the offer: “That Fiat was in the junkyard by ’78, but that apartment still stands! And today it’s worth nearly a half a million dollars!” Actually, I think it’s worth a bit more than that.
Another true story: A banker friend of mine manages the assets of a fabulously wealthy 70-something gentleman, whom I'll call Alfredo. In 1973, Don Alfredo was a youngish man, just starting out, with a degree in engineering but no money—until he inherited US$3,000 from a deceased aunt. Alfredo realized that the $3,000 were in a sense worthless: He couldn’t buy anything with them, and it wasn’t enough for him to leave the country and start over someplace else. After all, even then, $3,000 was not that much money.
So he took those $3,000, went down to the stock exchange, and spent all of it on Chilean blue-chip companies: Mining companies, chemical companies, paper companies, and so on. The stock were selling for nothing—less than penny stock—because of the disastrous policies of the Allende government. His stock broker at the time told him not to buy stocks, as Allende’s government, it was thought, would soon nationalize these companies as well.
Alfredo ignored his broker, and went ahead with the stock purchases: He spent all of his $3,000 on buckets of near-worthless equities.
On September 11, 1973, the commanders in chief of the four branches of the Chilean military staged a coup d’état. Within a year, Alfredo’s stock had rebounded about ten-fold. Since then, they’ve multiplied several thousand-fold—yes: Several thousand-fold. Don Alfredo has lived off of that $3,000 investment ever since—it’s what made him a multi-millionare today.
He realized, of course, that either those blue-chip companies would be nationalized by Allende—in which case he would lose all his $3,000 inheritance, which really wouldn’t change his fortunes very much—or somehow a new normal would arrive in Chile. Since the $3,000 couldn’t buy him anything, he took a gamble—and won.
What do these two true stories tell us? Simple: Buy when there’s blood on the streets.
That’s Baron de Rothschild’s famous line—but it hides a key insight, one which should be highlighted perhaps even more forcefully than the line itself:
Even in the midst of Apocalypse, things will get better.
That’s something people don’t quite seem to understand. In fact, it’s why teenagers tragically kill themselves over some girl or boy: They don’t realize that, no matter how bad things are now, they will get better later. To repeat:
Even in the midst of Apocalypse, things will get better.
I’m not repeating this insight as an empty comfort to my readers—I’m saying it as a trading strategy. When things are at their crazy worst, when everyone believes the Apocalypse is well nigh here, that’s when thing are about to turn for the better. This applies to every situation—including and most especially in a hyperinflationary situation.
Why? Simple: Because hyperinflation—by definition—cannot last. Because people need a stable medium of exchange. So if the currency goes up in flames in a hyperinflationary fire, of course there will be a period of terrifying instability—but it will pass. Either the currency will be repaired somehow (as Volcker repaired the dollar back in 1980–’82). Or the currency will be completely and irrevocably trashed—and then be replaced by something else. Because—to insist—people need a stable medium of exchange.
If Treasuries tank and commodities shoot up so high that they essentially break the dollar, civilization will not come crashing down into anarchy. At worst, there’ll be a three-four years of hell—economic hell. Financial hell. But then things will settle down into a new normal.
This new normal might well have unsavory characteristics. I tend to be a pessimist, and just glancing through history, I can see that just about every period of hyperinflation has been stabilized by some subsequent form of autocratic or totalitarian government. The United States currently has all the legal decisions and practical devices to quickly transition into an authoritarian or totalitarian regime, should a crisis befall the nation: The so-called PATRIOT Acts, the Department of Homeland Security Agency, the practical suspension of habeas corpus, etc., etc.
But as I said in my previous post, and reiterate here: Speculations about the new normal are pointless at this time. The future will happen soon enough.
What I do know is, One, a hyperinflationary event will happen, following the crash in Treasuries. Two, commodities will be the go-to medium for value storage. Three, all asset classes will collapse in short order. And Four—and most importantly—civil society will not collapse along with the dollar. Civil society will stumble about like a drunken sailor, but eventually right itself and carry on with a new normal.
During that stumble, opportunities will present themselves. I hope I have explained why.
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You're spending a lot of time responding to the Col. Are you in love?
No, see... he's my own personal troll. Every time I come here, he follows me around, responds to every post I make, putting up some gay youtube video that he thinks is funny.
If anything, he follows me like a teenager in love.
I smack him down like a two cent ho.
http://www.youtube.com/watch?v=VLnWf1sQkjY
What a fucking loser. Seriously... can't you at least come up with something original? (No, that's why you buy gold in the first place)
Is that your girlfriend in your picture?
She has a mustache. LMAO!!!
You want originality. Well since your a paper bug. The only origininality you can handle is derivative work. So here's a derivative.
http://www.metacafe.com/watch/2775813/jizz_in_my_pants_response_puke_in_...
Good work.
BWAHAHAHAhahaha
http://www.youtube.com/watch?v=VLnWf1sQkjY&ob=av3n
Get new material. You're boring me.
As someone who deals in arms every day, all day, I would tell you to think again trav. There is definitely NOT plenty of ammo out there....at any price.
The major shortage has been alleviated....but it appears to me like it's starting out all over again. You would be surprised at the value of ammo. Much more divisible and tangible than a lot of other commodities.
I wonder if "shortages" are somewhat regional. With the exception of .38 hardball I have never not been able to find something I was looking for. Ranging from .17 HMR to .300 WinMag in about every common caliber, and a couple of oddballs. I may not have been willing to pay the price, but that's why I buy in bulk and wait.
God you're an idiot.
Get new material. You are boring me.
http://www.youtube.com/watch?v=VLnWf1sQkjY&ob=av3n
http://www.youtube.com/watch?v=_EAXYH4b4yM
Ooohhh... look at me, I can't think for myself!
I posted the same thing somebody else posted! I'm so goddamn clever...
Or... maybe you're just the same mustache chick that posts those videos, along with the colonel sanders guy.
All seven of you are paid shills for TPTB that get paid eight million dollars a year to bring gold down!!
Nadler!!!
LOL at morons.
Hey Johnny, what's that wet spot in your pants? And that mushroomy-fishy smell coming from it? Uh oh, you didn't do it again?
YEEAAH Buddy! He did it again! Jizzerroo!!!
http://www.youtube.com/watch?v=VLnWf1sQkjY&ob=av3n
Yeehaw. I'm havin' more fun than a tornado in a trailer park.
Get 'er done, Colonel.
230 grain Hollow Points have gone from 28 dollars for 20 rounds to about 35.00 plus taxes for 20 rounds.
I bought 50 round surplus hollow points while they were 32.00 now they are 38 dollars. Corbons and other very high powered .45's reach upwards of 50 dollars per box now. Twice what they were two years ago.
Quite a few of these brown delivery trucks carry ORM-D Boxes in varying amounts all over the Arkansas area each day. There are at least 60,000 concealed carry licensed people plus twice that who keep arms for defense and hunting.
Hunters and meat processors will become useful in times of trouble. Plenty of wild hog in our area now.
I'm an Arkie as well. There are 89,000 CCLs in the State and going higher every day. It's taking up to 6 weeks for processing they are so covered up. FYI.
Make them easier to take off folks with NONE.
It doesn't have to serve as currency..........why trade it when they can shoot your ass, and get your stuff for free?.
Gully made a point about burning shit down, well as I have stated before, gotta get close enough to do it, and if you have no surveilance systems, and cameras in place,with alarms, you just got one more thing to concern yourself with.
Also, for the LE patrols you are kidding?,it's not the job of LE to protect you, or your family, it's yours.SCOTUS has ruled on that already...........
If it's not reg Military, your ass may be grass......
As Men, we are responsible for any contingency that's survivable,for our families.
Neighborhood groups are a smart move, with people you can trust, and are like minded.Tell no ONE what you have, or where it is, except who you want to have it, if you do not make it.
As for ammo not scarce now.
Nope...............but for the last 2+yrs, you paid 5-10 times the going rate, prior to Iraq, and Trashcanistan(IF any was available)..........and it's still double to triple what it was,prior to Iraq.
My suggestion is while it's RELATIVELY inexpensive depending on caliber, is get what you want now, if you have not done so LONG ago.
We think nothing of paying $1200.00 for 1oz of Gld, but shit, if we had a stash of ammo worth that much..............your PM's gonna save your ass?.
Not in the worst case scenario, and nowhere to go.
Ammo isn't scarce because factories are cranking it out, it's being transported to stores regularly, and people feel no need to buy it rather than get beer, a new TV, see a movie, etc.
Take away new production and distribution, similarly curtail the beer/TV/entertainment, and toss in an actual need to have and use ammo, and then suddenly have tens of millions of people who have some sort of firearm and little or no ammo decide they want more....
If it's something you want, now is the time to get it.
Where is there an ammo shortage? Not in Texas. I keep hearing about it and then I run to Academy and buy some more, for what I do not know.
i thought i was reading the inflation article. Duh , fool me , i am on a survivalist site? Yikes
Got LOVE?
Deep Thoughts from John Handy:
If we have hyperinflation before depression it will last as long as a tree falling in the forest.
Deeper thoughts: If we have a depression, will passing out Prozac to everyone help?
-The dollar will no longer be the world reserve currency (Euro goes then we go)
-Hyperinflation in the price of imports (No one wants our dollar anymore)
-Deflation in the housing sector, as prices have to come back to earth because no one will have money b/c it’s being spent on imported fruits, foods and other necessities
-Oil prices soar
-Currency devaluation – this one will hurt prices for goods and services will go haywire along with incomes
-Drag the US into military conflict with Iran- only way to expel the excess dollars from the economy the paradox is that this will drive us further in debt
-Gridlock among politicians as no one wants any fingerprints on the train wreck
"The dollar will no longer be the world reserve currency"
...right you are....I suggest that the NATO 223 be considered, though there are those in favor of the 308.
the 30-06 is the most popular rifle cartridge in the world.
the .223 is a varmit caliber.
Umm, hate to break it to you, but there are more 7.62x39mm rifles in the world than ALL OTHER CALIBERS COMBINED. Ask Jane's.
Here, here, ID. Long live the AKs. The russian stuff is cheap to.
ID & cossack, right on.
The AKs are not fussy about the environment they are in. Pull the trigger, and out comes a bullet.
Good luck my friend.
http://www.youtube.com/watch?v=gRRUuXyspT0
Right, because an AR/M16/M4 would handle that test in stride... Here is bit more controlled attempt at finding what it takes to stop an AK: http://billstclair.com/DoingFreedom/gen/0304/reliability0304.html
True, but not in the (former Republic known as) USA. Here its 5.56 and 7.62 NATO.
Don't want to get into a pissing match about which one is best to own. Get what you like and are comfortable with. A fellow can always trade in an AK for an AR if he needs to, I reckon.
Correctamundo! If some underpaid Army Quartermaster decides that he'd like to part with a few M4's for a bit of my silver I certainly would not turn him down...
All wonderful firesticks!.In their place,and proper times, I personally prefer the 8541 special.
For CQ, the other two, are GudNuf.:>)
I still have the gun i was born with . It cheapens life when one must kill another to keep it.
Love is the ultimate weapon. Get some.
Grows food, laughs a lot . Mantra 'fuck it.'
When they come in numbers to your house you too will give up your weapon as others stand by and watch. I have seen folks walk past others who were hurt and not care.
I own both, and will say this: You better get me dead ass dead with that first round of '06 or you are liable to have fifteen rounds of that "varmint" in your ass.
I would add that the definition of varmint is subjective.
God you're an idiot.
Get new material. You are boring me.
That's about the best I can do without somebody going "wahhhh... Tyler, Johnny Bravo said something bad to me!!! I'm a little bitch, so.. ban him!"
You guys haven't even seen the true skills come out yet.
Sweet! Always a robust debate on ZH! I look forward to seeing your true skills.
Sweet! Always a robust debate on ZH! I look forward to seeing your true skills.
Sweet! Always a robust debate on ZH! I look forward to seeing your true skills.
WHAT is with this constant and nonsensical whining from you about other posters "going to Tyler" already? Just what the FUCK are you talking about?
He keeps claiming tha he's always getting banned or suspended or some such. God He's fucking full of himself.
http://www.youtube.com/watch?v=VLnWf1sQkjY&ob=av3n
Not a bad idea to have both ammo's even if you can only shoot one. Consider also, what caliber might be used against you, fallen weapons are no good unless you can make them work... Survival 101.
I'll buy BRK.A for $300.00 and change ...
Avatar stealer!
http://www.youtube.com/watch?v=VLnWf1sQkjY&ob=av3n
terrifying, yet fascinating....
Look on the bright side. A hyperinflationary depression will at least improve the obesity statistics.
Time for levity - always look on the bright side of life.
http://www.youtube.com/watch?v=WlBiLNN1NhQ
To clarify, gonzalo (if you're reading this), when you say people will flee Treasurys into commodities, do you mean they will stock up on stuff for later personal consumption like buying an extra tank and buying heating oil to store in it?
Or do you mean they will sell, say, a million dollars of Treasuries and buy a million dollars of physical lumber or copper or whatever?
I can definitely see the former, especially food and energy (heating oil, gasoline, NG, LP). But not the latter. 150 tons of copper bricks stacked on pallets will not be worth anything more than that apartment in Santiago.
There are two "commodities" that will of course shoot the moon. Gold and silver. But I put the word in quotes because they won't be acting as commodities but as money.
They are the most marketable in the small (hoardable), the most marketable in the large (liquid). They have the smallest bid/ask spread. They have the highest ratio of stocks to flows. In short they have every desirable aspect of money: portable, storable, holds its value, easy to get into and out of without frictional losses, and there is enough of it to act as money without the inrush spiking prices and liquidation crashing prices.
Btw, I would quibble and use von Mises term "Crack Up Boom" rather than hyperinflation. As you explain very clearly this event is not going to be caused by banks expanding credit (which is what inflation is), but a collapse in confidence in the currency itself. When people repudiate the currency it is a whole 'nother animal.
People will just blindly and panicly buy anything they think they might need that won't spoil or would possibly be good to trade for things they "forgot" or couldn't stock easily. This includes but is not limited to. Several coats, dozens and dozens of pairs of underwear. Closets full of shoes, food, toilet paper, extra dishtowels, boxes of soap, dozens of tooth brushes, enough razors to shave italy. etc etc etc. Though it will be heavily concentrated in 25 and 50 lb bags of rice, huge tubs of oatmeal, etc etc. Basically think of costco and sam's club being picked clean like a corpse.
Oh throw in hundreds of pounds of batteries and extra tools.
Hephasteus
In addition to the Argentinian survivor post above.
http://www.thepowerhour.com/news/items_disappearfirst.htm
From a Sarajevo War Survivor:
Experiencing horrible things that can happen in a war - death of parents and
friends, hunger and malnutrition, endless freezing cold, fear, sniper attacks.
1. Stockpiling helps. but you never no how long trouble will last, so locate
near renewable food sources.
2. Living near a well with a manual pump is like being in Eden.
3. After awhile, even gold can lose its luster. But there is no luxury in war
quite like toilet paper. Its surplus value is greater than gold's.
4. If you had to go without one utility, lose electricity - it's the easiest to
do without (unless you're in a very nice climate with no need for heat.)
5. Canned foods are awesome, especially if their contents are tasty without
heating. One of the best things to stockpile is canned gravy - it makes a lot of
the dry unappetizing things you find to eat in war somewhat edible. Only needs
enough heat to "warm", not to cook. It's cheap too, especially if you buy it in
bulk.
6. Bring some books - escapist ones like romance or mysteries become more
valuable as the war continues. Sure, it's great to have a lot of survival
guides, but you'll figure most of that out on your own anyway - trust me, you'll
have a lot of time on your hands.
7. The feeling that you're human can fade pretty fast. I can't tell you how many
people I knew who would have traded a much needed meal for just a little bit of
toothpaste, rouge, soap or cologne. Not much point in fighting if you have to
lose your humanity. These things are morale-builders like nothing else.
8. Slow burning candles and matches, matches, matches
http://www.survivalblog.com/2009/12/letter_re_the_bosnian_experien.html
I would advise that you don’t keep everything that you have in one location. I was forced to leave my house and take off with just my backpack and weapon. If you can, keep a bug out bag [cached] a few miles away from your house so that you could go to it, if you are forced to abandon your residence. Be prepared to not return to your home for years and try to have another place to live in another part of the country or even some other country. I was not able to go back to my home until years later. Stash as much ammo in different locations as you can. I did not have enough ammo in the first place and whatever I had was used or traded within first month of me leaving my home. Ammo was good trading currency and could get you a meal at any time. Local paper currency was basically worthless but if you had foreign currency, then you were in better shape. At that time German Mark was most popular currency in Europe and could get you anything in former Yugoslavia during the war. The Gold and Silver were good to have but it was harder to find someone that would accept gold and silver as form of payment .
People that lived in big towns also had their share of problems. If they lived in apartment buildings, they were dependent on central heat and when the things started to go bad, there was no more fuel to heat these apartments. Not that many people had wood burning stoves and the winters in Eastern Europe can get really cold. I would advise that if you don’t have a wood burning stove, to get one and store it somewhere until you need it. You will need it not just for heat but also for cooking. The people that had stoves or were able to obtain them or make them then had another problem, getting the firewood. If you live inside of city that is surrounded and you can’t just go outside of city and cut some trees down, obtaining firewood can become your daily battle for survival. Burning your furniture, books, park benches, trees from the parks and every other tree that you can find will be normal. I would advise that if you are going to have a stove either store at least one winter supply of firewood (if you have a place to store it at) or have a plan where you get that firewood when you need it. Another issue that people from the cities faced was the shortage of water. Some people ended up digging wells in the courtyard of their apartment buildings but majority of people who tried this were unsuccessful since they were digging where there was not water or old city utilities were under the places where they tried to dig. Most of the people were forced to make daily runs to water points and bringing the water back to their families. Water points were favorite targets for snipers. Having extra water jugs will help you minimize your visits to water points.
Since this is my first post, I will not make it too long and will stop here until the next time. - A Bosnian Survivor
Serbia was in a state of war and under siege and bombardment. They produce no oil and were quickly stripped of industrial capacity.
Note that this was NOT the experience for any South American nation, all of which have gone through a hyperinflation. The two largest nations in S. Am are each on at least their 3rd currency in the past 20 years. At no point did ammunition become a currency nor toilet paper.
Large relatively resource-rich nations can't be starved to scarcities in basics like this. The US produces easily enough food to feed all of us, and still 5-6mbpd of oil per day, has relatively vast coal, gas, and uranium reserves, along with fresh water, timber, abundant wind, sun, and even hydro still out there.
Assuming we annex Canada in case of apocalypse, we have access to relatively gigantic additional reserves of oil, gas, uranium, coal, water, timber, and about every other mineral out there. Just seizing the tarsands would get us to the production levels we were at near peak, granted these are 1970-era figures, but we seemed to be doing pretty ok back then. Certainly not starving and having zombie outbreaks.
Granted. But could a recalcitrant part of a resource-rich nation be starved? Will the government be willing and able to deliver ample supplies to everyone?
Be prepared. It's the Boy Scout motto.
"assuming we can annex Canada"
and that is why our liberals/leftist gave us gun control. They want to make it easy for you.
the multiculturals win and you will still lose even if canada falls.
World govmint bitches
Annex Canada. I don't think so. Mexico is more likely to annex us if we don't get a first rate fence up.
It won't be official annexation in either case...American John Galts will move to Canada, and Juanito Guitterez will move to California, Texas, et al and reproduce like their lives depend on it.
Eventually the northern John Galt grandchildren will be subsumed by Juanitos grandchildren.
Socialism: Resistance is futile--you will be assimilated.
Doesn't Canada have more firearms per head than the USA? good luck with the annexing.
Pamp,
No their Left Wing Socialist MFKRS took away their right to own even pocket knives.
They have some of the finest Snipers in the world, in the Military, but the populace has been screwed...........
It's kinda like going to Mexico, if the Canuck BP finds a box of ammo, your screwed, even if you have no weapon.
Same for Mexico, if you can believe that...........
But the U.S. has hundreds of thousands of Civilian marksmen, that would make most Armies cringe.
Ma Bell would be jealous.
No their Left Wing Socialist MFKRS took away their right to own even pocket knives.
Canada has less guns/per citizen than the US but that statement is a crock of shit. Another thing - our current Prime Minister is more right-wing than your President!
Ma Bell would be jealous. What!?
Note to Frank - The right-wing left-wing thing is kind of silly, wouldn't you say so?
Your question is vague and without context... ? Hinting at Taoism almost. ?
There are always at least two sides or views, the extreme of either often, maybe always dangerous. Again, your question is pretty vague.
i would diplomatically argue that most of the useful issues/solutions we deal with live well within the grey mass of "no-right-answers" that resides smack between those "two sides or views" you cite.
it is the bane of humanity that we constantly attempt to force that which is naturally grey into either black or white, mostly so we can feel more comfortable with ourselves in our prespectives/illusions, then reject/atack those that don't choose our particular "side or view"
and so it goes.
agreed.
"Moderation is the inseparable companion of wisdom, but with it genius has not even a nodding acquaintance." - Charles Caleb Colton
There's a lot of truth in that quote.
Looks at his 8" randall fighting knife.
Maa
Maaaa
Made in Canada.
Hmmmm.
Canadians get permits for guns just like in much of US. No one but law enforcement can clear customs with guns anywhere in the world. I guess bribery would fix that.
That fucker Michael Moore lied to me!
''annex Canada"
Are you crazy? Take on the savage Ontarians? We might as well jump head-first into a Waring blender.
Bunch of crack heads. Let's go camping in Somalia.
Re. item #3 on the Sarajevo list - In rural Asia, nobody uses toilet paper, except as a kind of roll of napkins on a restaurant table. Making use of simple technique from time immemorial, people stay clean and healthy.
Harvest season here in the midwest. Been threatening to "put up" some veggies for years and was always lucky enough to talk myself out of it. Too close now. Just canned my first eight pints of tomato sauce. Lot of freakin' work. Olny benefit over cheaper store bought is that I know whats in it. Beans and corn this weekend. Damn, between canning, cleaning guns, and burying ammo, this prepper shit is hard work.
When the garden is overwhelming me, I seldom go to the trouble of making sauce. Tomatoes are a bitch, because they just keep coming, SLOWLY. It isn't like beans where you can get them done in two pickings, and be done with it.
If you're getting behind, try just canning them diced/quartered. Goes faster than shit, and you can always strain the seeds and puree later. Salsa is also pretty painless.
Have you tried pickling your beans? I put up 60 pints of pickled beans, 20 quarts canneds, and froze another 35-40 quarts. After that I started giving them away.
If you are canning tomatos buy determinate rather than indeterminate plants. All the tomato's tend to ripen over a very short period of time then quit producing. Milestones
Most of our plant are determinate. Roma's, Celebrities and Jetsetters. We have a couple of cherries and few heirlooms my mom started for us. (I don't remember what they are off the top of my head)
We have problems with the ripening, period. I probably have 500 mature green tomatoes outside.
Green salsa, chow chow and Picalily.
God you're an idiot.
Get new material. You are boring me.
I'm sorry. Maybe I should make my whole life revolve around entertaining you next time.
It sure entertains the hell out of me to type the same thing over and over, especially to old colonel sanders there, who follows me around and posts the same thing over and over.
Only he posts gay porn from youtube links or something. I don't know. I don't click them.
Something new! I like the spirit. I will refrain from typing the same thing over and over, though it did entertain the hell out of me too.
See you latter, JB.
Have a good night man.
And BTW, it's funny as hell to just type the same thing, if you're the one typing it...
LOL
Tampons and toilet paper
You haven't done any shopping yet Lucy?,ju got some splainin' to do,times a wastin.............and prices are WAY up over a year ago.
When folks Flee Treasuries, (if their stupid enough to wait that long), then their fooked.
This will not be a 2-3 week, month event, it will happen like a lightning bolt.
Stores empty in an hour, Dist centers, re-supply, stores empty in an hour,
Normal storage for major chains is 3 day supply per store(will be empty in minutes),Distribution facilities for same, 3 week supply, delievered, or jacked, gone in minutes.........
IOW, if you have ANY thoughts this may happen, NOW is the time to start, not waiting till it's too late............
Like the market,rather be out a year early, than a day late.
I am envious of the youngsters here, that do not have kids,and grandkids.......just themselves and Mom & Dad.
Both.
Remember the oil contango? Those big tankers, just sitting out there, filled to the brim, waiting for the futures to catch up to them?
The same thing—at all levels of trade. Though I do think that, if there is a hyperinflationary event, the futures markets will explode—literally.
As to gold, as I mentioned in passing in the other post, I actually think gold will be finessed by the powers that be, at least in the initial phases. The reason I think so is, gold is a big psychological metric, yet at the same time is a small enough market to be manipulable, at least short term. Be warned, this is just my hunch, not backed up by anything except my horse sense—and considering how badly I do on the ponies, I wouldn't bet much. It's just a feeling I have, which is why I would prefer silver.
Hope this helps.
GL
Regarding folk's questions about "where the money would come from" - I'm guessing that if the banks "lost the faith" they would collectively dump all that stimulous cash they've been hording ASAP.
If that all went into commodities - that would drive that segment of the market to the moon right there.
Citu,
Again, if that time HITS, you won't be able to buy ONE ounce of Gold, for all the FIAT the bank has,,,,,,party's over dudeski.
Who's going to give you the ultimate in wealth for a shitload of paper?.
NO ONE.
That's why most here have USED those FRN's or a lot of their FRN's, now, to make sure they do not get caught BROKE.
I won't be able to buy them, but I'll be able to rob goldbugs for them! LOL
Another really good essay and nice examples.
Thank you, Double-D, very kind of you to say.
GL
Ditto's Gonzalo, very good article, and gave a lot of light, on just what to expect, IF it happens here.
However IF it does here, I expect it to be far worse.
People have a difficult time grasping Americans knowledge, and lietimes of freedom, and how tough it will be to freely surrender it.
I for one, see a really shitty scenario playing out,too many folks here not willing to give in without some bad shit.
I may be wrong, but I fear I am not.
Like Mr. Cenente say's, "When you lose it all, You LOSE it".
...freedom, and how tough it will be to freely surrender it.
I for one, see a really shitty scenario playing out,too many folks here not willing to give in without some bad shit.
Liberty or death.
I wonder if we'll be able to jam this thread through 1000 comments, just like the last one.
Calling Johnny Bravo. Come in, Johnny Bravo...
I think he took his ball and left. I tried to talk him out of it ..
Even the mention of my name gets ten posts.
The people here are obsessed with me. I'm a star.
Star of a German Schizer video, maybe. People talk about you the way they talk about the guy that got caught having sex with animals. Here's a hint, we're all laughing at you.
So why don't you just leave?
Because what would all my groupies do if I left?
Cry out into the night... "Where's Johnny Bravo???"
I don't want to disappoint my fans. It's tough being a star.
http://www.youtube.com/watch?v=VLnWf1sQkjY
Oh look. One of my groupies posted a video that I'll never watch.
How clever.
I want to do the same thing as everybody else too. Then I could be clever.
And the funniest thing about Escape Key?
Her mustache.
Take a razor to your hungry ass! I have a Mach 3 you can borrow.
LOL
They aren't posting it for you, tubboy.
win.
Actually JB is right. On a gold thread the other day, JB did not show, it seemed like the party never happened...
Still going to buy more gold though.
It's good to hear somebody tell the truth. I always knew I could count on ya, buddy.
You're one of the good ones, DoChen.
And this spalding guy even took my old avatar!
WTF?!?
Poser! LOL
He appeared briefly on another thread, having been called out for being silent as the market sold off. Patted himself on the back for being a trading genius, then said the market was about to go up. He will not appear here is my prediction.
Nah, I just have better things to do than listen to a bunch of retarded conspiracy theorists spout their drivel all day.
Yes, the market is about to go up.
I wasn't silent about any market sell off. I told people to buy VXX near the last highs.
I barely come here anymore. It just isn't worth it. The comments in this thread should explain why.
Obviously you don't.
You're right, it isn't worth it. Why don't you just get out?
Bravo still wants to prove that the Industrial Revolution did not take place until 1913. He will accomplish this by calling people assholes. At least that's the plan.
This is exactly the intellectually dishonest behavior I speak about.
Why even bother to argue? People will make up what I said later anyway.
I gotta give you somebody to hate, tmosley.
Think of all the beatings I save your wife (husband?), dog, and kids every day!
That's right, pretend like your life has some sort of value.
Truth is, no-one needs you. No one wants you, other than as a sideshow.
johnny my hero, you delightful , youthful soul. I thank you ! I haventh laughed this hard in a while. Markets going up! Yeah KA BoOOMM
No way. They're way oversold. You won't even see them break 1040 is my guess. They might break down later, but not right now..
'I barely come here anymore. It just isn't worth it'
who are you kidding. this place is the highlight of your life and we all know it.
Just wait for a small correction in gold prices temporarily and he will appear suddenly with his balls.
Gold is about to turn down, the market is about to turn up.
There's my prediction.
Of course I won't get any credit when it happens.
I give you credit for being wrong already although you probably think you're right. Gold will not go above $1220...then you changed to $1230ish, and now it reached $1240. How'd your shorts go?
I was right when I called the uptrend at 1160.
What did you do? Say to "back up the truck" the last time it was on the way down?
LOL. You paid 1300 for a 1240 asset, and you're asking me how I did being wrong by 20 bucks?
You're the one who's upside down for 60 before you even do anything else.
What's the max, JB? I had another idiot gold troll tell me that $1100 was the max. That it was going to plunge, and that I was going to "lose my ass". Now here we are at $1240, and he's claiming to be a psychic (literally). I'm sure you will be claiming the same thing in a few months when we are sitting at $1500.
He's occupied at the moment...
http://www.youtube.com/watch?v=VLnWf1sQkjY
I am the lifeblood of this site.
Every time I post a few times, a thread gets double the clicks.
What conspiracy theorist can claim that?
People love to hate me because I'm right.
your production is as prolific as it is pathetic. if only you would leave and quit clogging the server.
And then I'd get fifteen people on every thread going "where's Johnny Bravo?"
Every time I log in and go to a random thread, I see it.
I'll pick one out of the hundred stories, and there's ALWAYS somebody asking.
I know that people hate geniuses and all, but they can't live without me.
I feel like Copernicus must have. I keep telling you that the earth revolves around the sun, but you guys just want to burn me at the stake and then ramble on "goled to 540000 bitchez!!!! Canned hamz under the porch yo!"
LOL
That's because you're a sideshow. A freak. A guy, people use to feel better about themselves; "at least I'm not him". So, yeah, in a really sad way you do have a purpose.
Oh, and
http://www.youtube.com/watch?v=VLnWf1sQkjY
Yeah, I'd have to feel better about myself by ganging up with a bunch of losers if I was a loser.
As far as the "at least I'm not him." That's what I say every time I see your fucking asinine posts.
I mean really. You all could be making money trading. Instead you're posting conspriacy theories that have no chance of coming true.
Your need to feel better than other people just shows what a loser you are.
And now here you are, posting the same video that somebody else posted.
You can't even be original. It's pathetic.
he reposted what he had posted before. and you still haven't been able to explain your hypocrisy or is it merely sadism? for your insult laden trolling spam. you must be getting something out of it. anonymous internet attention? i need say no more.
from what I've seen people don't hate you, they love you because you are wrong
When youland yourself in the bottom of a big hole - put down the shovel and STOP DIGGING!
Who needs gold when you have guns (really big guns) and lots of ammo?
So you plan on stealing and robbing when the chips are down? It's because of people like you that I have armed myself as well. There are an over whelming population that's armed now. Stealing might work a few times until it doesn't.
Bingo! I have multiple guns to protect myself from people like him (or her) who might be looking to poach what I have stashed thus far.
Just a little southern humor...
The guy running the slowest, is carrying the most gold.
Well Done!
Think back to 1999, you had to pick the next internet winner. Think back to 2006, housing prices were sky rocketting you had to get in you had to buy something. Thats how you felt, you were missing out. The same is true when the bottom of "event happens" you feel hopelessness and dispare. Thats when things will get better.
Here's my version of Life After The Crash:
"It's my opinion that after Sept 2008, the US Gov't has a plan in place for just such an emergency; they obviously are'nt letting me in on it, so this is my best guess. I'd wager that "The Plan" is to nationalize vital utilities and companies. I think there will be no choice but to hit the "reset" button on the financial system, which does two things.. first it wipes out any debts owed by anyone anywhere.. including home mortgages, which is a way to ensure that 100 million families don't become homeless and it'll make them kinda glad in a way for the collapse, thus ensuring political stability. I believe that states will then issue ration cards for all the unemployed, which will be at least half the adult population. I believe the state will take all foreclosed properties and give them to families; hotels will be siezed by states and used. The second part of this is that anyone with money, bonds or stock are wiped out, even if you are saving the money in your mattress. Retirement is now a pipe dream, as is a job.
The people will notice that gas is extremely valueable; your ration card will allow unemployed folk perhaps 2 gallons a week or so as the Arabs refuse USD and demand a barter of goods.. grains primarily. The local stores will be essentially cleaned out, and only the basics of life are available. Instead of perhaps thirty brands of toothpaste, you'll have one. Coffee, booze and cigs are a memory. The food will be more local.. there will be no more imported grapes from Chile; instead you'll have bread, carrots and beans. People will begin using bicycles again out of necessity, and they become more valueable than cars. Golf carts become the luxury SUV's of tomorrow"
http://themeanoldinvestor.blogspot.com/2010/05/after-crash.html
All kinds of great posts coming out tonite. Thanx
LOL. That is some funny shit right there.
Yes, that's it. Free everything. The guy in line behind me at the welfare office said the exact same thing.
They might have a plan but it will be a fiasco that will never happen. Like all their totalitarian wet dreams. Stocking up is smart.
or... to take care of the useless eaters and to reduce the load, manufacture a world de-population event for 25 to 50%.
Got your registered mail with the micro needle inoculation patch yet?
Mr. Lira: this is an interesting analysis. Thanks for it.
But I would prefer that you not conflate the issues of breakdown of law/order/property rights and hyperinflation. Yes, they happened to occur simultaneously in Chile in those years. But that experience is not dispositive regarding what may happen in the US, assuming of course that we can maintain law/order/property rights.
It's hard to predict what might happen to hard asset (real estate, land, equipment) prices. Clearly, if the general level of business activity in real terms declines, asset prices might also, as their returns fall pari passu with the decline in activity. But this does not mean they would underperform other asset classes here.
Basic commodities would probably fall under rationing or price controls. Yes, a black market would develop. But it would be hard for ZHers to exploit this opportunity legally.
Paradoxically, RE and farm equipment might outperform these other assets in real terms.
Also, I believe that over half the currency already printed by the US circulates outside the country. (Could you check on this for us?) This would be quite a tax on foreigners and gangsters (and foreign gangsters). Indeed, a shitload of paper money would be required.
In short, I believe it is very hard to predict how to protect oneself, beyond the obvious weaponry suggested by our fellow readers.
Basic commodities would probably fall under rationing or price controls.
Price controls lead to shortages, not lower prices. Bread might be $1.00 a loaf, but there will be none available.
I believe it is very hard to predict how to protect oneself
I believe the author laid out a very respectable description.
How can you use the words 'dispositive' and 'shitload' in the same post? Isn't that illegal in most states?
Clearly the massive liquidity in the banking system has the potential to cause inflation. The Fed has provided the means to trigger it but it hasn't happened yet mostly because of ZIRP and steady net reductions in lending.
But the seeds of inflation are present. The Fed will not be able to "drain liquidity" effectively as they have vowed to do. So once again we are at the mercy of the bankers who's sole purpose since 1913 has been to cause inflation.
Please tell me if I have missed anything here.
Chunk
I cannot emphasize this enough—
There will be no inflation. Deflation is here to stay—until if and when we get the hyperinflation that I describe, brought about by the loss of confidence in Treasuries that I predict.
Inflation will never happen in the Global Depression we are experiencing. It will not happen because there is downward price pressure on wages and inventories, and there has been (since at least 2008) a rapid contraction in credit. So there is no chance at all that the economy will revv up and create inflation.
Inflation and Hyperinflation are not the same thing.
Sorry to scream, but it's getting a little annoying having to go over the same old ground.
Peace.
GL
I must disagree with your definition of inflation. Yes, demand-pull can cause inflation, but it is a transitory effect that is readily overcome by arbitrage to take advantage of the higher prices. Inflation of a more lasting kind (that is still not hyperinflation) is a general rise in the price level due to an overmatch of the money supply to the actual wealth or value circulating in the economy in the economy.
He can define inflation any way he likes so long as his deductions drawn therefrom are consistent with the definition. Different definitions will yield different conclusions, so not agreeing with his definition of inflation will result in your not agreeing with his conclusions. Anyhow, that's my take on your comment.
Care to make the hypothesis falsifiable with a time line?