On Hyperinflation (Dire predictions. Be forewarned.)

The Market Ticker - Commentary on the Capital Markets ^ | 1/12/09 | Karl Denninger

[Thunder90]

I forget to mention that the economic crisis will force the US to take its eyes off another growing storm, the coming cold war with Russia and China. These countries have a fall back plan for economic collapse, and that is going back to Communism and planning wars. Remember that this also happened in WWII with Nazi Germany, Fascist Italy, the Soviet Union, and Imperial Japan.

[Tublecane]

“McHugh has suggested that Congress refund 5 to 10 years worth of income taxes to individuals and small businesses with the proviso that the money be used to pay down debt: credit card debt, student loan debt, car loan debt and — most importantly — mortgate debt. The remainder could be spent or invested. Those who were wise enough to avoid debt could spend or invest the full amount.”

I don’t see as how Congress would ever possibly vote to refund 5-10 years of taxes, even if it were to their long-term advantage. If they were to pass a massive money drop, they’d do what they always do, which is raise taxes on rich people.

[hiredhand]

By the time we get to that point (regional secession, even “virtual” secession) the USA won't even be recognizable.

Things are happening a lot faster than anybody would like to admit. The MSM and government leadership has been caught lying so many times and to such depth that I'm surprised that anybody believes them anymore about ANYTHING. But I believe from what I hear that the bad economic situation is a lot worse and a lot more progressed than anybody who is supposed to know will admit right now. They (our leadership) are really in a tough spot (not that they don't deserve to be there!). But so long as they let the crazies predict gloom and doom while they pull a Wizard of Oz act from behind the curtain, they can hold off the results of masses of panicked people until the scope of the problem simply can't be covered any longer. In truth, a lot more people are realizing how big and bad the problem is and it's getting hard for even our professional liars in D.C. to cover up for much longer.

I say we're officially screwed. It's already happened, and there's nothing that the government or anybody else can do about it. The only people who HAVE money aren't spending. This concerns me, because if our dim witted leaders ever really figure this out, the logical conclusion is that they use aggression and force to take from those who have. Or (and this is a paranoid suggestion), they'll simply demonize those who have and create a division between them and the have-nots and then we'll have a big turkey shoot when the mass robbery starts. But the news will report that a bunch of rich tighty-whities with guns shoot a bunch of poor people who were unarmed Hmmmm...I seem to have read this somewhere recently.... wink/wink...nudge/nudge. :-)

Either way you break it down logically, it's a bad scene on the horizon...that much is certain.

[An Old Man]

Here's another wave sequence relating the peaks to wars

Click on the Graphic for a High Resolution PDF

[sickoflibs]

RE “Schiff bought into the utterly false notion that the emerging Asian economies had decoupled from the US economy

I noticed that too. It could happen in the future but he missed it. It is possible that recover without the US by dumping dollars.

I think his message is a good one for Republicans that post-Bush stand for nothing . GWB has made tax increases popular, and socialism.

[Travis McGee]

I love the Spanish expression for “between a rock and a hard place.”

They say, “Between the wall and the sword.”

That’s where we are now. It doesn’t hurt much until it’s too late.

[randita]

Great analysis. Thanks for your insight.

Obama is going after a political solution, not an economic one. In doing so, the pain is forestalled, but when it finally comes, it will be the harbinger of a fatal illness.

[JDoutrider]

Worth a look...

[justa-hairyape]

You might have a point. The Russians are sure acting like the US is history. Perhaps they know how the geopolitical chess game will end. The West played a strong opening game, forced the East into a Russian Gambit, which has incredibly succeeded and now the end game is certain. So the Russians waltz into Georgia, public opinion be damned. Russians turn off the gas to Europe, public opinion be damned. Islamic protestors own the streets of Europe, public opinion be damned. The East knows the end and knows there is nothing we can do about it. And quite frankly, with all the idiot grifters running DC, how can we possibly have a good outcome ? Trillion dollar deficits ? Its over. Time to plan the rebuild IMHO.

[GOPJ]

The Federal Government will do, take, force, impoverish, print what ever it has to do to take care of those near and dear to it. And, we are not the ones.

You're right. We are not the ones.

[CottonBall]

They are wrong because if this outcome occurs there will be no United States of America, your gold will be confiscated and/or rendered worthless by executive fiat, and at approximately the same time an angry marauding mob consisting of half the population of the country will literally loot and burn everything to the ground.

Am I missing something? All I read in this article is that hyperinflation could not possibly happen - and only because the outcome would be very bad for a lot of people. This is not at all convincing. It's more like the author is trying to convince himself, but not even using facts or logic to do so. Only because people would suffer, therefore it won't happen. Denial is stress free, but not always correct.

[CottonBall]

I dunno, I see this all as being a GOOD thing. This is how we get our country back...

I have the same thoughts. There's no way (IMO) to change the socialist tide and entitlement-attitude among people. Except through severe economic hardships.

[adm5]

I believe the $53 Trillion was based on 2007 numbers, without the latest bailouts of late 2008 included.

So we’re probably sniffing $56 Trillion+ and growing.

Sickening.

[adm5]

Exchanging something with no inherent value(paper) for actual goods and services is called Fraud... when the layman does it. So in essence the US Government is going to perpetrate the largest fraud in the history of the world by Hyperinflating our currency to pay these suckers? Wars have been started for less.

What's the alternative? Obama cutting off all social entitlement programs, and eliminating the military, and cutting social security benefits to the tidal wave of baby boomers about to swamp the system??!

Nope, just crank up the printing presses! A lot easier.

[DuncanWaring]

Where n the constitution does the government get the right to house and feed anyone.

Where in the constitution does the government get the right to do 90% of everything it does?

[cynwoody]

You are delusional if you think the military could stop such a thing

Stop such a what? Ours are at least as good as Gus, I should hope!

[Freedom56v2]

I am not familiar with Denninger....who is he and what are his credentials?

[Xenophon450]

I concur, although I doubt China will take this lying down. If they have even half of the intelligence we give them credit for, they are already trying to diversify out of their dollars, in anticipation of this no-holds-barred orgy of debt monetized stimulus.

[blam]

"I'm composting absolutely everything to improve my soil for all the food I intend to grow. No few little salad tomato plants this year - gotta get serious. "

My neighbor bought 15 cases (12 jars in each case) of canning jars/caps this evening at Wal-Mart.

[Publius]

There's no way (IMO) to change the socialist tide and entitlement-attitude among people. Except through severe economic hardships.

It's called Aversion Therapy.

There are two books you should read. One is Atlas Shrugged by Ayn Rand. We're living through the book now.

But there is another book, long out of print, that is worth a read. It's The Devil's Advocate by Taylor Caldwell. It was written in 1952 and has since disappeared. The book is about how a few heroes used aversion therapy to ovethrow a communist dictatorship ruling America.