Image: Jonny O'Callaghan

“Everyone in the country was in shock.   People’s net worth had devalued more than 53% overnight.”

Looking back, it was so obvious.  But most people ignored the warning signs following the government’s reassurances that all would be well… It’s human nature to want to believe that everything is going to be OK.
Are we so different today?
Looking back, it’s all going to seem so obvious.   If a major, global currency crisis hits within the next 12-months, people will think, “How did I not see that coming?

Unfortunately by then it will be too late.

Cameron Diaz

On this MUST WATCH interview of Sprott’s Ask the Expert, The Dollar Vigilante’s Jeff Berwick discusses Japan’s plans to double the Yen’s money supply in the next two years- a plan Berwick describes as “textbook hyperinflation“,  and how the Fed will OUTPRINT the Japanese, meaning nothing but inflation and hyperinflation is on the horizon for the US.
With half of the US population dependent on the US gov’t, Berwick states the coming collapse of the dollar will be unlike anything the world has ever seen as the US gov’t hyperinflates the dollar to unimaginable levels. 

Full interview is below: 

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The world monetary system is even more tightly wound. Each day that goes by whistling past the reality guarantees that.   Panic leads to selling by everyone - all at once.
When the next crash arrives, the dollar’s demise will play center stage.

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Silver and gold prices continue to deteriorate as the speculators continue to buy up shorts and the commercials were able to wrest all higher priced longs from them in short covering, depressive episodes which, repeated in nature, have convinced the speculators prices are going much further South, and soon.
The important thing for the powers that be to do now is to reinforce the negative thinking on the part of speculators and anyone with interest in physical metal as they want it all for their one world currency backing, and they want it at low prices.
When prices do go below $17 we are going to begin to see foreign governments coughing up physical into the market as they will embrace all things paper and the promise of far greater returns on investment and protection from inflation for their people while watching the DOW eclipse 18,000, then 19,000 then…20,000.
If you believe Martin Armstrong, we will see DOW in the high 20,000s maybe even break 30,000.
All will seem well in the world of paper until merely days before the planned economic collapse of the world’s derivatives and bonds, and lastly all currencies.

hyperinflation

$100 million that flowed directly to Zimbabwe’s brutal dictator Robert Mugabe was more than just a cash infusion to a corrupt dictator.   Rather, it was a veritable political lifeline to a desperate and vulnerable despot. Facing defeat in the initial round of elections to the opposition, and with the nation’s currency was hyper-inflating, the only thing he had at his disposal were valuable platinum assets that were at the time held by Anglo American Platinum.
So Mugabe did what any desperate tyrant would do:  He expropriated the assets from Anglo-American and immediately put them on the market to raise money to crush his opposition.
Enter Wall Street…

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Events, food purchased away from home and live entertainment are increasingly unaffordable to the bottom 90%.
It’s starting to feel like a $5 bill is the new $1 bill: everything that could be purchased with one or two dollars not that long ago is now $5 or even $10.

The 30 statistics that you are about to read prove beyond a shadow of a doubt that the middle class in America is being systematically destroyed.  Once upon a time, the United States had the largest and most prosperous middle class in the history of the world, but now that is changing at a staggering pace.
Yes, the stock market has soared to unprecedented heights this year and there are a few isolated areas of the country that are doing rather well for the moment. 
But overall, the long-term trends that are eviscerating the middle class just continue to accelerate
.
In this economy, you don’t even have to lose your job to fall out of the middle class.
The following are 30 stats demonstrating the destruction of the US Middle Class: 

The existing dollar-centric system is not in the favor of most of the new powers of the world…and they are rapidly moving to reduce their dependence on the dollar.
If $12+ trillion is no longer needed as reserves for international settlement – where does that money go?  Well, a relatively small reduction in dollar trade replaced by Yuan, Ruble, Real, etc. (say 5%-10% over 2014) would free up $600 B to $1.2 T to move where dollars are still readily accepted…the US of A.    Typically, these dollars would be levered up (say conservatively 5x’s)…and voila, $3 trillion to $6 trillion of purchasing power is introduced to America in 2014.  Things like stocks, bonds, and Real Estate would be very positively pushed higher and higher (rents, insurance, etc. would also be unwelcomingly pushed higher as wages remain flat due to structural unemployment issues.
But let’s say in 2015 the pace of BRICS non-dollar trade continues expanding and international settlement in non-dollars grows by 10% to 20%…and 10% to 20% of dollars are no longer needed as reserves to buy oil, wheat, finance trade, etc.   This is about $1.2 trillion to $2.4 trillion formerly held reserves cleared to go looking for their home…the US$1.2 trillion to $2.4 trillion levered again very conservatively @ 5x’s is $6 trillion to $12 trillion in “hot” money looking for assets.  With just a fraction of all the inflation the US exported over the ’71-present period coming home…this creates what amounts to a hyperinflationary-monetary dollar overdose in America.
Once these things start, they create a momentum of their own and eventually a likely counter by the administration to freeze out these dollars and the likely panic this ensues both domestically and internationally.

dollarAll commodities and near-commodities are priced internationally in dollars, and the dollar is used for over 80% of cross-border trade settlements. Consequently the dollar is the base currency for all countries’ foreign reserves, giving it its reserve status.
However, there are now challenges to the dollar’s hegemony, with Russia, China as well as the other members, dialog-partners and associates of the Shanghai Cooperation Organisation (SCO), taking deliberate steps towards doing away with the dollar entirely for pan-Asian trade.
Recent developments setting up a rival to the IMF by the BRICS nations is part of this challenge.
If you follow the geopolitics, you might reasonably conclude that the dollar’s dominance has peaked and is now declining.
The SCO appears to believe there can be a transition away from the dollar, an idea that could turn out to be dangerously wrong at a time of great but generally unrecognised currency fragility.
At the heart of the issue there is a worrying lack of distinction between the dollar’s reserve function and its function as the monetary standard from when it replaced gold in 1971.
To fully appreciate the importance of the dollar as the standard for all other currencies, we must review the monetary history behind how and why the dollar replaced gold, and the implications for today.

launch rocket verticalThe precious metals are lynch pins.  They are nagging and persistent counter-parties to money printing gone wild.
The US currently has a Debt to GDP well north of 100%.  That’s always a part of each hyperinflation.
Real (GAAP-derived) accounting puts ($6 Trillion) deficits at least five times tax revenue in the U.S.
Most modern hyperinflations started with only 2x deficit revenue.
Jobs, energy use, and real inflation are major (misery) indicators that we are in massive decline.
The only variable left to ignite is money velocity.
When prices begin to fly, the point of no return will be long since passed.

June’s FMQ components have now been released by the St Louis Fed, and it stands at a record $13.132 trillion. As can be seen in the chart above, it is $5.48 trillion more than an extension of the pre-Lehman crisis exponential growth trend.
The chart confirms that tapering seems to be having little or no effect on money markets and therefore the growth rate of fiat currency.
Still believe the Fed is really tapering QE?

Play

The world’s leading silver expert David Morgan joins The Doc & Eric Dubin this week to discuss: 

  • The Fed tapers official QE another $10 billion- gold & silver whacked the day after the FOMC statement yet again
  • David breaks down gold and silver trading over the first half of 2014:  Gold & Silver still base building a Major Bottom
  • Is the next banking crisis beginning? Banco Espírito Santo’s share price halved on  Thursday
  • Be right and sit tight?  David explains why the PM markets will scare you out or wear you out
  • We ask David how he sees the end-game for the dollar playing out- will we see a deflationary crash, or a hyper-inflation monetary collapse,  and how will PMs protect wealth against both?
  • On the Brink?  Washington driving West towards direct conflict with Russia

The SD Weekly Metals & Markets With The Doc, Eric Dubin, and David Morgan is below:

Dr Ron Paul, the popular Presidential candidate and America and the world’s most popular libertarian voice, told CNBC yesterday that he “still believes in gold” and that “gold could go to infinity.”
Paul informed the MSM host why the long term case for gold remains intact (while Jackie DeAngelis stated gold’s 8% performance year to date is disappointing):
“Timing is the only thing.   I remember watching gold when it was 35 dollars an ounce and we thought if it ever hit a hundred dollars, the world would come to an end.   And then a thousand dollars, so; no, it’s good as long as we continues to do this [print money] , you know, it could go to infinity because when people just leave the dollar, who knows what.” 

dangerDing, Ding, Ding!
The bell tolls, not for the 1%, but for the remaining 99% in Europe, the UK, Japan, and the US.
What Danger Zone?  The powers-that-be must find a way to keep the masses under control, raise taxes, enrich themselves and monetize the debt.
The result will be currency devaluations, blood, inflation, distractions (such as downed airliners and new wars), banker bonuses, continued payoffs to politicians, and so much more.

hyperinflationThe official policy of the Central Bank (Federal Reserve)/government is: inflation is necessary for “growth,” i.e. economic expansion. The unstated reason for this official support of inflation is that it’s easier for borrowers to service their debts as their income inflates.
Just as the Federal Reserve cannot directly force you to stick the needle of monetary heroin (debt) into your arm, it also can’t force employers to pay employees more.