Free Republic

WASHINGTON — Inflation is widely reviled as a kind of tax on modern life, but as Federal Reserve policy makers prepare to meet this week, there is growing concern inside and outside the Fed that inflation is not rising fast enough. Some economists say more inflation is just what the American economy needs to escape from a half-decade of sluggish growth and high unemployment. The Fed has worked for decades to suppress inflation, but economists, including Janet Yellen, President Obama’s nominee to lead the Fed starting next year, have long argued that a little inflation is particularly valuable when the...

The US dollar sank against the euro Tuesday after fresh data on the jobs market pointed to the Federal Reserve not cutting back its stimulus before 2014. WASHINGTON: The US dollar sank against the euro Tuesday after fresh data on the jobs market pointed to the Federal Reserve not cutting back its stimulus before 2014. The prospect of the Fed's easy money program staying unchanged, after months of expectations of tightening, pushed the euro to its highest level on the greenback since November 2011. At 2100 GMT, the euro bought US$1.3780, compared to US$1.3681 late Monday. The September data showed...

Federal Reserve chair nominee Janet Yellen Wednesday suggested that she will put a renewed emphasis on “jobs” in her role as Chairwoman of the U.S. Federal Reserve Bank. President Obama nominated Yellen, a vice chairwoman of the Board of Governors of the Federal Reserve System and former president and CEO of the Federal Reserve Bank of San Francisco, to run the U.S. central bank Wednesday. If confirmed by the Senate, Yellen will become the first woman to run the Fed in its hundred-year history. Yellen is expected to accelerate the devaluation of the dollar by continuing or even expanding the...

David Buckner, the founder and CEO of Bottom Line Training and Consulting, an adjunct professor at Columbia University, and the author of “Permission to Think,” explained on the Glenn Beck Program Wednesday why America hasn’t yet seen hyperinflation — but why it could be just around the corner. Buckner said that in discussing hyperinflation, people often refer to the Weimar Republic, Zimbabwe, and Bolivia, but say “it could never happen here” because a “certain kind of layering has to occur” that America hasn’t seen. That layering, he said, or the “recipe” for hyperinflation, is: 1) Economic Implosion 2) Collapse in...

The Inflation Predictions Were Just Wrong, And Now They're Hurting People Cullen Roche, Pragmatic Capitalism June 21, 2013, 4:21 AM Remember back when QE started and we saw charts of high powered money going vertical all over the place and everyone who didn’t understand modern banking said that the reserves would flood out into the economy causing high inflation or even hyperinflation? And do you also remember how most of those same people also said that the only way you’d be able to protect yourself from this hyperinflation was by owning hard assets like gold or silver? Well, the inflation...

PRESIDENT Robert Mugabe has said he won't step down because of pressure from Britain and other countries for a change in government. “You want me to retire? You do not talk of retirement when elections are coming, do you?” the 89-year-old president told Kyodo News in an interview in the Japanese city of Yokohama where he was attending and a thre- day summit on African development. Mugabe will lead his Zanu PF party in elections to choose a substantive government this year, replacing the coalition administration he formed with rival Morgan Tsvangirai after disputed polls in 2008. The Constitutional Court...

ALBERT EDWARDS: Stocks Will Crash, Hyperinflation Will Come, And Gold Will Go Above $10,000 Joe WeisenthalApril 25, 2013 This is always reassuring. SocGen strategist Albert Edwards remains an ultra-bear, and predicts everything will go to hell. In his new note he writes: We still forecast 450 S&P, sub-1% US 10y yields, and gold above $10,000 My working experience of the last 30 years has convinced me that policymakers’ efforts to manage the economic cycle have actually made things far more volatile. Their repeated interventions have, much to their surprise, blown up in their faces a few years later. The current...

A trip to the Iranian resort island of Kish illuminates the pressures, limits, and strange consequences of economic sanctions. For years, I have been advising my cash-poor friends: the secret to an ultracheap international holiday is a Google News search for the words runaway inflation. The place listed in the dateline of any recent articles including that phrase should be your destination. En route to your home airport, visit the bank and withdraw U.S. dollars in crisp hundreds and fifties. At your beleaguered landing place, the local currencyÂ’s value will be melting away like a snowman in July. Your greenbacks...

This Is A Recipe For Massive Hyperinflation Bankruptcy Economics / HyperInflationFebruary 27, 2013 - 12:25 PM GMT By: Money MorningMartin Hutchinson Nobody was really shocked when Venezuela devalued the bolivar earlier this month from 4.3 to the dollar to 6.3. When it comes to the currency wars, massive devaluations are simply one of the keys to this "race to the bottom" strategy. But Venezuela's bad behavior, and that of several other countries in the region, means that several Latin American countries are now likely to suffer hyper-inflation or declare bankruptcy. For investors in Latin America, that raises the risks for...

The Real Danger Of The Fed's Easy Monetary Is Not The Risk Of Hyperinflation Comstock PartnersFebruary 21, 2013, 2:56 PMThe Fed's current attempt to control long term rates, "QE to infinity", is based on the hope that by providing cheap money, banking and financial firms will lend and thereby stimulate the economy. This would be a sound plan if the problem with the US economy was a shortage of credit. With corporations holding back cash and depending on productivity gains to drive earnings, the typical recovery scenario where the private sector borrows money for investment and drives job growth and...

Why Inflation In 2013 Is Imminent Economics / InflationFebruary 14, 2013 - 03:48 PM GMT By: Money Morning Jeff Uscher writes: Is a spike in the monetary base - currency in circulation plus bank reserves at the Fed - the first sign of imminent inflation? Art Cashin, the well-respected director of floor operations at the New York Stock Exchange for UBS, recently told King World News the increase in the monetary base may well be a sign of impending inflation. Monetary base, sometimes called high-powered money, is the basis for the bank lending that drives our economy. When interest rates...

Art Cashin: A Dormant US Inflation Indicator Just Spiked, And It's Got Me Thinking Of Weimar And Zimbabwe Sam RoFebruary 13, 2013, 3:58 AM Veteran trader Art Cashin has been more concerned about the threat of inflation in the U.S. than most. In a recent interview with Eric King of King World News, he notes that the once dormant threat of inflation could be waking up. From King World News: ...That having been said, the Federal Reserve Bank of St. Louis puts out what is called the ‘Monetary Stock.’ It is the ‘raw material’ of the money supply, and it...

John Williams: How To Survive the Illusion Of Economic Recovery Economics / Great Depression IIFebruary 09, 2013 - 01:40 PM GMT By: The Gold ReportJohn Williams There is no economic recovery, and there are no signs that a recovery is coming, says Shadowstats.com author John Williams. In this Gold Report interview, he blames mal-adjusted inflation statistics for creating an alternate reality that overestimates economic activity in a way that is unsustainable. Williams warns that eventually the painful truth will be so difficult that even government manipulation won't be able to deny it and that is when hyperinflation will take its...

Why There's No Real Inflation - Yet Economics / InflationJan 30, 2013 - 01:16 PM GMT By: Money Morning Martin Hutchinson writes: According to Milton Friedman, "inflation is always and everywhere a monetary phenomenon." If that is true, then you have to wonder where the heck all of the inflation is. Every central bank in the Western world is holding interest rates down, and almost all of them are printing money like it's going out of style. Five years ago, nearly every economist in the world would have told you this would cause inflation to skyrocket, and the big deficits...

John Williams Forecasts U.S. Dollar Hyperinflation Before End Of 2014 Economics / HyperInflationJanuary 29, 2013 - 12:46 PM GMT Anybody who thinks the U.S. is in a so-called recovery isn’t listening to economist John Williams. He contends, “We haven’t had a recovery and we’re not about to have one, and it’s getting worse.” Williams says it’s because, “The consumer is in very serious trouble. . . . The average guy is not making it. His income is not keeping up with inflation.” As far as Congress getting the budget and debt ceiling under control, Williams says, “Both sides are faced...

Gold Won't Save You From Hyperinflation According To A New Study James Pethokoukis, American Enterprise InstituteJanuary 24, 2013, 6:18 PM A new NBER working paper, “The Golden Dilemma”, looks at the investment history — and possible investment future — of gold. Many fascinating nuggets and charts in the research. Especially interesting is its negative take on gold as a safe-haven hedge against hyperinflation (or even regular inflation, for that matter) or other crises: We also parse the safe haven argument and come up empty-handed. We examine data on hyperinflations in both major and minor countries and find it is certainly...

Excerpt - Original at: Hyperinflation Signs: There are a few more signs of currency hyperinflation coming to the US and the world. First, from a global perspective, the Wall Street Journal says even the Swiss are printing money now: The nation’s central bank is printing and selling as many Swiss francs as needed to keep its currency from climbing against the euro, wagering an amount approaching Switzerland’s total national output When even the staid Swiss are printing money, this is a dark sign of not just US hyperinflation, but something we’ve never seen before – a global hyperinflation, with hyperinflation...

Contrary to popular opinion, U.S. tax rates aren’t low, says Edward Prescott, a Nobel laureate economist at Arizona State University. “Tax rates are already high, much higher than is commonly understood, and increasing them will likely further depress the economy, especially by affecting the number of hours Americans work,” Prescott and Lee Ohanian, a UCLA economist, write in The Wall Street Journal. …

There are limits to how much aid the Federal Reserve can provide to the U.S. economy, Fed Chairman Ben Bernanke warned on Wednesday as he urged politicians to tackle a year-end fiscal cliff that could derail the country’s gradual recovery. … The U.S. central bank announced it would keep buying $85 billion of Treasury and mortgage-backed bonds a month until it saw a substantial improvement in the outlook for the labor market. Its balance sheet would increase to almost $4 trillion by the end of next year if it kept up that pace of purchases. … Critics of the central...

A currency war in the simplest form is basically when there is too much debt and not enough growth. - James Rickards, Currency Wars: The Making of the Next Global Crisis Currency wars are real wars. But they are waged with currencies, stocks, bonds, derivatives, commodities, rather than guns and other kinetic weapons. In a currency war, countries try to manipulate their own currency to gain an unfair trade advantage. There is a currency war when one country tries to devalue its currency relative to others in order to promote exports and create jobs. Let's take an example. Some...