Posted on 12/30/2009 7:00:45 PM PST by blam
2010 Perils And Potential Profits As Hyperinflation Nears
Stock-Markets / HyperInflation
Dec 30, 2009 - 07:10 PM
By: DeepCaster LLC
To see 2010’s Potential we must first consider the Main Perils.
“Hyperinflation Nears…"
The intensifying economic and solvency crises, and the responses to both by the U.S. government and the Federal Reserve in the last two years, have exacerbated the government’s solvency issues and moved forward my timing estimation for the hyperinflation to the next five years, from the 2010 to 2018 timing range estimated in the prior report. The U.S. government and Federal Reserve already have committed the system to this course through the easy politics of a bottomless pocketbook, the servicing of big-moneyed special interests, gross mismanagement, and a deliberate and ongoing effort to debase the U.S. currency. Accordingly, risks are particularly high of the hyperinflation crisis breaking within the next year…
Numerous foreign governments have offered unusually blunt criticism of U.S. fiscal and Federal Reserve policies in the last year. Both private and official demand for U.S. Treasuries increasingly is unenthusiastic. Looming with uncertain timing is a panicked dollar dumping and dumping of dollar-denominated paper assets. Such is the most likely event to trigger the onset of hyperinflation in the year ahead…
The U.S. has no way of avoiding a financial Armageddon…With the creation of massive amounts of new fiat dollars (not backed by gold or silver) will come the eventual destruction of the value of the U.S. dollar and related dollar-denominated paper assets…”
“HYPERINFLATION SPECIAL REPORT (UPDATE 2010)” John Williams, Shadow Government Statistics, December 2, 2009
These Expectations of Hyperinflation (and a contracting Economy) are unfortunately supported by the Realities of Total U.S. Federal Obligations (National Debt plus downstream Unfunded Liabilities).
2009 Total Federal Obligations (TFO per GAAP) are $74.6 Trillion (according to Shadowstats.com), up from $65.5 Trillion in 2008.
The 2009 National Debt Component (of TFO) is $11.9 billion, up from $10 billion in 2008.
Over the long term, these obligations cannot possibly be repaid without a substantial further devaluing of the U.S. Dollar. Unfortunately, when the devaluing picks up steam the denouement could look quite like the Weimar Republic, or Zimbabwe.
In the short and medium term one refuge, and, indeed, a potential Profit Opportunity, is in Inflation Assets, and especially Agriculture.
With the Earth’s Population growing at 80 million/year and the U.S.A.’s exploding at 5 million/year, increasing demand for food is a certainty.
Of course, Timing and Selection of Specific Commodities are essential to Profit.
Supplies of Portable Energy (Crude Oil, Gasoline) are another Inflation Asset.
But profiting from these Strategic Commodities is a tricky business, and not only because their price is susceptible to levels of economic activity.
The price of Crude Oil and Other Strategic Commodities, and the Precious Metals is also subject to Overt and Covert Price Manipulation of Fed-led key Central Bankers and their Allies including certain Primary Dealers.
[snip]
In English , Please,
>> In the short and medium term one refuge, and, indeed, a potential Profit Opportunity, is in Inflation Assets, and especially Agriculture.
With its Weird, Non-Standard Capitalization, this article Reads sort of Like one of those Weird Emails I get from the Nigerian Minister of Scams suggesting I Send Him my Bank Account Info.
You know, that Nigerian Minister of Scams was just about to release $20M to me — but then he set himself on fire.
LOL! I get turned off by any analogy involving the USA with Weimar Germany or Zimbabwe. Sure we may get inflation, in the 15% annual range like the late ‘70s-which would be “hyper” relative to current rates, but you’ll have millions of rifle-toting citizens in the streets LONG before it gets “Zimbabwe-style”......
What the author is saying is that the economy can go from flirting with deflation to hyper inflation in a year's time. That can't and won't happen. Inflation is a monetary phenomenon and it is certainly possible that we'll see it in the future but not that quickly. The psychology can't possibly change so rapidly.
I’ve got both bases covered - I’ll be in the streets with a rifle and my wheelbarrow.
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