Greg Mannarino states that in the big picture, the Fed’s unlimited $40 billion a month quantitative easing announced Thursday is pushing us faster towards the biggest economic monster that the world has ever seen.  Mannarino states that unlimited QE will unleash horror on the human race the likes of which have never even been thought about! 
Mannarino states that the time to become your own central bank is NOW and that those who have not already converted their dollars into physical gold and silver are going to have a serious problem! 

Greg believes that Bernanke is playing with fire and that history and basic economics dictates that this will play out via MASSIVE inflation and ultimately HYPERINFLATION.

    • 44 mag:  Your questions are answered in the book:  When Money Dies by Adam Ferguson. 
      But the Cliff Notes answer is: Yes, having loans during hyperinflation makes them much easier to pay off!  
      You need to be really careful here and not run up any additional debt.  My input is we’re eventually going to have high 1970’s type of inflation versus hyperinflation.  Three to five years of 15% to 22% interest rates and it would reset the system versus having to go through 200% yearly inflation like Brazil in the 1990’s.  
      When does this high inflation start is the million dollar question?  It could be years or perhaps some unilateral agreement to halve everyone’s national debt could happen which could push this out further.  If the correct steps were taken there’s obviously the chance we never see any high or hyperinflation but that’s becoming doubtful.

    • The real inflation rate right now is running at around 10% to 11%. Most home owners with a decent credit score have refinanced their homes to 3%-4%. So in real terms the banks are paying us 7% to 8% to own our homes! Which means that it is happening already!

    • IMHO, 44 mag, you could go either way.  Being without debt is obviously fine.  However, there IS some benefit to having a TON of debt.  Its HOW you ACCUMULATE that debt.  BAD debt is buying “stuff”.  SUPERB debt is buying silver and creating debt that way.  I did it.  My horror story, in brief, is in 2001 after retiring, I lost nearly all my heavy six-figure nest egg thanks to my financial manager throwing me/others under the bus!  So, after burning the midnight oil FOR TWO YEARS looking for an investment needle in the haystack I decided to ride PMs to my retirement heaven. So, I borrowed every penny I could possibly get my hands on, and as a result, I’ve quadrupled my initial nest egg.  So, again, 44 mag, its the kind of debt one acquires.  Good luck and KEEP STACKING!

  1. 44 Mag  It’s my opinion that you could hold debt that may be paid off in dollars at a future date if a strong surge of inflation gives your fresh supply of dollars more value in paying off deflated debt.  It is unlikely that the bank will beg you to pay off that low rate loan so they can relend it at a higher rate but in the late 1970s my parents got an offer from their bank to pay off their 6% loan at a significant discount when inflation was running about 13%.
    You may be able to negotiate with your lender and convince them to offer you  a discount on the principal if you pay the loan early.  If your rates are very low, say in the 3% range, and inflation is 10% plus, they might be willing.  Bankers are not the brightest bulbs in the box but they are capable of third grade math, mostly.   If your precious metals ramp in value then that resulting benefit to you through debasement of of the USD will work to your advantage.  Converting some phyzz to cash and then quickly paying the loans could work. I have a low rate mortgage, 3.5%, and plan to sell a specifically allotted amount of PMs to pay that loan.  If silver hits over $200 an oz or gold over $4000 then it’s off to the races.  I have 3 years to make that conversion.

  2. No one knows what will actually happen, and if they say they do then they are deluded. Wages, may or may not be increased fast enough to keep up with hyperinflation. This is assuming you will have a wage. It seems we may be headed for economic disaster on a scale never before seen. Even if you pay off your debts and house it may do you no good since you may have to pay high taxes without having any income or a mob may burn it down with you in it. The best plan is to plan for the worse. Have lots of gold and silver, for sure, but have plans to evacuate to any of several locations where you have food, water, and weapons stored. I don’t think what we are facing is going to be anything that is fun and games where the one with the most silver wins and the others lose. It may become a life and death situation and just being able to find enough food without getting killed will be a normal day. I hope this doesn’t occur, but like I said, it is best to become prepared for the worse. It may be that being able to identify edible plants and the ability to build a shelter and stay hidden will be more valuable than all the silver in the world.

  3. I  was thinking along the lines of the Weimar Republic where I go to the bank with a wheelbarel of money and pay off my hame autos,etc. i currently work in the oil industry so for now i feel my job is stable.

  4. Wages never ever keep up with inflation.  It’s also my belief that precious metals will front run inflation’s advances.
    The wages of the average American have gone backwards by $4,000 in the last four years, from $52,000 per annum down to $48,000   That is in real dollars.  Inflation ravaged dollars means that $48,000 is possibly worth as little as $40,000. Precious metals have gone up by triple digits in that same time period.

        Everyone is feeling the pinch of inflation and wage erosion.  American net worth has eroded by 40% in the last 10 years.  In nominal dollars it is more like 60%.  1/3 of the US population has NO NET WORTH-ZERO, and 30% are below the poverty level. 
    By way of noting this I have strip mined my income from cap gains, interests and dividends plus business income  to a level below the US government measure of poverty ($27,000)  I hate paying taxes and have removed myself as far from the tax Nazis as I can. We live on what savings we have and the little bit of  business income that trickles in. 
    Don’t get me wrong though, I don’t plan to bankrupt myself.  All my financial resources are now in silver and gold.  My plan was to remove myself as far from the mainstream ground zero targeted middle class as possible and make safe harbor for what remains of my assets.
    Part of the income reduction was deliberate and part was a sign of the times. Inflation is my friend for one and one only reason. The value of precious metals will ramp up allowing me to convert phyzz back to cash to take care of expenses.  Belt tightening is the word of the day now in order to benefit in the future.
    I think I speak for many people on this site doing the same.

    • Agree.  I like a very low profile especially since the hounds of fiat have been unleashed.  We have a site to exchange ideas, talk and receive honest information and that is much appreciated.  Take care.

  5. I think all this talk about how to deal with future increased interest rates in an inflationary climate masks the result of what would happen to the federal balance of payments in such a scenario.  Just going up a percentage or two will bring down the house of cards.  The whole system is teetering.  With increased interest expenses, the government will not be able to service the debt.  They can keep printing QE to infinity to pay the interest, but the whole thing becomes craven at some point. 

    I don’t see a steady changing economic climate unfolding.  There’s a cliff out there, or a black swan waiting to appear.

  6. The only people happy about this latest QE should be the bankers and the government’s big spending bureaucrats. They won’t have to rein in the empire, or give up those shiny black Escalades-  they can cover it all on BennyBucks, threats and lies.  The people will be badly hurt. 
    If you have a couple tons of silver you will be ok for a while.  How many do?  The rest of us are going to see paychecks that shrink (in buying power) weekly, fixed income folks will be on dog food.  Unemployment will worsen, people will have less purchasing power so they cut any frivolous spending. When the higher gas/diesel prices hit, everything hauled in on trucks will go up to compensate.  Food prices to the moon.  3rd worlder’s ribs will be sticking out in no time.  Rioting and MadMax scenarios in the mideast and Africa.  (here too?) Obamacare will raise taxes in the middle of it all.  That should bump a few people out of the middle class, eh?  Total misery for most….  But our precious banks will be booming along, the bonuses this year will be fat.  I can’t believe they are this selfish and evil.  A wharf rat has more character than these bastards.  When I said they probably wouldn’t do it, I was hoping they had a modicum of human decency. Was I ever wrong.
    There is a higher Judge, and His wrath will be terrible.  Enjoy the perks while you live, rats.

  7. Bless you, MaryB, for being prepared as best you can.  About 95% of our fellow citizens do not have a clue about what is going to descend upon us in a year or two.  I’m more optimistic than some who think that we will have a financial collapse early in 2013.  No one really knows, of course, so one guess is as good as any.  The bottom line, though, is to not waste any of the time that we have left.  Go like hell and then go some more.  Have silver, have weps, have ammo, have food and water.  Best of all, have faith for that is the one intangible that will really pay off in the dark days that lie ahead.

  8. Hi guys, been preparing and have a some questions. I have about a year supply of food and a well and generators. Am I right that if you can last that long you will outlast most of the dregs- I hate to say it. I also have ammo etc. So besides health items, what should I be looking at. This is so disturbing. Aren’t we looking at a worldwide meltdown? What will it be like, Argentina? Worse? And when folks say keep it in different places (phyzz) what does that mean? Different continents? Different parts of town?

  9. Andymal  You are pretty well prepared  Skip over to ‘Doc’, the best of’ My prepper guide is embedded there. It hits the high notes and some suggestions, sites, websites and other tricks of the trade for people who want to make sure they are topped up.  I have 3 years plus of food but it is set aside for both my family and 2 others.  They have skills I dont have but I have the financial resources they don’t share. So we agree to collaborate.

  10. History repeats again if humans repeat their same mistake of the past. All fiat currencies have ended with hyperinflation and with infinity QE, the US dollar will have the same faith. I think that the fall of USA will be the same as the fall of the Roman Empire but this time, it’ll be the worst event in the human history. By that, a new era will start while the Modern era will end.

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