Maybe I’m going too far here, but I can’t help thinking of Weimar, Zimbabwe, the Ukraine and Ayers’ “final solution”.
Your dollar will now be worth one penny. A loaf of bread will cost $500.
It’s post-WW1 Germany, folks.
...gulp....
Interesting analysis. How good have his articles and predictions been in the past?
"Photoguy said...
Eric,
"Excellent, lucid, thought-provoking post. I agree on the "ego" post regarding Denninger; if he's going all cash, he'll be in the food lines of 2012."
"There is no doubt, NO DOUBT, in my mind that within the next three years, Au & possibly Ag will be confiscated. Other than canned goods, hard liquor, and other obvious storable items of value, what else could be transition our wealth into that could be easily stored and that would preserve our wealth during a period of hyperinflation? Other than Au & Ag? Diamonds are too hard to accurately grade, so I wouldn't want them. Land & CRE is taxed each year, so I don't want that. What?"
"There has to be something, other than Au & Ag. Perhaps I'm overthinking this, but I see what's coming and I'm doing my best to prepare."
Reference bump ... why are we in this hand basket and where are we going? :-(
The underlying news is that the Fed is going to increase the amount of treasury securities it holds from 1.9 trillion to 4.5 trillion.
The article subtracts the currency currently circulating abroad from the new amount of treasuries held by the Fed to get a figure for the new "US domestic monetary base" of 3818 billion.
It then defines the old monetary base as the currency circulating in the US = 250 billion.
But shouldn't the old monetary base be computed the same as the new? In other words it should be 1.9 trillion - 583 billion = 1.317 trillion.
This would mean the the US monetary base is increasing by a factor of about 3 rather than 15.
Also the article assumes that all the new money created will circulate in the US. Taking this into account would mean that the US monetary base is increasing by a factor of less than 3.
Welcome to the Big Zimbabwe.
the other factor nobody ever comments about, is that an overseas dollar is about 50% more valuable than a domestic dollar...because it escapes the current confiscatory taxation we’re drowning under....
H Y P E R I N F L A T I O N COMING..........
The ONLY safe investments will be land, property, and HOLDING precious metals like Silver and Platinum.
(Gold is WAY oversold, imho)
Physical Holding, not funds...
On the bright side, passbook savings yields will go up, but it won’t keep pace with Inflation.
There is one place that makes the paper for the currency. Is there a way to check their output and see if it’s either rising or planning a significant increase?
mark
They mention that 70% of US currency is circulating abroad - which is true to a point. That number is "PHYSICAL" currency, a.k.a. Federal Reserve Notes.
The article then goes on to state how 70% of the current money in circulation (FRN's AND computer entries) is overseas. This is completely incorrect.
FRN's make up about 3% of the currency in circulation. Of that 3%, 70% of those FRN's are held overseas.
Ping for later
That’s a pretty heavy Link, Whew!