The masses, it seems, have been waking up for a while. Not only have we had state sanctioned inflationism ever since the credit crunch, but the developed world’s central banks have done their best to destroy faith in money altogether. It turns out that hyperinflation itself wasn’t a necessary precondition for a crack-up boom – taking interest rates into negative territory was quite sufficient to trigger a rush into real assets.
Everybody loves the early stages of inflation…
Calculating the REAL inflation rate…
Does Gold Care About Inflation?
Sprott’s Thoughts Digs In, & the Result Might Not Be What You Expected…
It’s not a question of either/or. It’s not a debate over inflation VS. deflation.
It’s only a matter of WHEN we’ll end up with BOTH.
“What we see at present is a battle between the central banks and the collapse of the financial system fought on two fronts. On one front, the central banks preside over the creation of additional liquidity for the financial system in order to hold back the tide of debt defaults that would otherwise occur.”
The dollar is revealed to be a paper thin instrument of warfare, a twisted illusion, a weapon in a covert economic war that threatens our very livelihood.
Where are consumer prices headed and how this might affect precious metals?
This looks like the beginning of a severe deflationary cycle.
It is going to get worse before it gets better.
The central banks will try to correct this deflationary spiral with further reduce interest rate reductions, massive new doses of QE, moving even deeper into negative territory, a strategy that has proven to be a complete failure.
This does not bode well for any asset class.
Excess cash will not be loaned out, thus cramming more capital into the bank balance sheets, doing nothing for the global economies except stockpiling fuel for a burst of hyperinflation.
The dollar is always losing value. To measure the decline, people turn to the Consumer Price Index (CPI), or various alternative measures such as Shadow Stats or Billion Prices Project.
They measure a basket of goods, and we can see how it changes every year.
However, companies are constantly cutting costs.
If we see nominal—i.e. dollar—prices rising, it’s despite this relentless increase in efficiency.
CPI only measures the tip of the iceberg. The result is the greatest sleight of hand ever.
The stunning graphic below illustrates the disparity:
I guess if you don’t eat anything with ground beef in it, you might think there’s no inflation:
At what stage will we see massive rise in CPI – even in real terms versus whether instead we will experience a currency collapse caused by widespread derivatives?
To the Austrians inflation is an increase in the quantity of money and credit. Inflation is not defined as rising prices; this is the long-run result of inflation in the quantity of money and bank credit.
Common jargon confuses the effect for the cause.
It seems our modern Central bankers believe something quite different entirely…
Thanks to the Federal Reserve, the middle class is slowly being suffocated by rising food prices.
Perhaps you have also noticed that food prices have gotten pretty crazy lately. In particular, meat prices have become absolutely obscene. For example, the average price of ground beef has risen to a new record high of over $4.09 a pound. Over the past twelve months, that works out to a whopping 17 percent increase…
Putin kicked out the Rothschild bankers from his country. Putin interrupted the USGovt heroin trade supply routes out of Afghanistan. Like Abraham Lincoln 150 years ago, the elite banker chambers wish to remove Putin and to suppress Russia, but the sprawling nation has joined at the hip with China. Thus Russia cannot be isolated any more than a bear can be bear hugged. The nation spans 12 time zones and is a top supplier of numerous important commodities. The Russia & China bond is growing and will result in a marriage, the consummation being a baby called the Gold Trade Standard.
The King Dollar is being displaced, kicked off its throne. Its squire the Petro-Dollar is undergoing demise. The Ukraine War is the USDollar Waterloo event.
The Saudi rejection of the USD in exclusive oil payments will be the crash heard around the world.
The marriage between the Saudis and Chinese is a process well along, with each month featuring yet another high level conference. The Saudis will make the announcement in the coming weeks or months, as a genuflection before the Chinese, with a hat tip to the Russians. Soon the crude oil price will be set by the Russia-China tag team, priced in Yuan. When the Gold Trade Standard is entrenched, the diversification away from USTreasurys in the global banking system will become a torrent. Bank system practices will follow trade payment practices. When installed, it will cause prosperity in the East and havoc in the West.
The Crash Heard Round the World is coming. The USDollar will be rejected, and replaced by the Gold Trade Standard.
In the article below, we analyze the surprisingly likely drivers that may keep the US dollar strengthening over the next few years, especially if another economic/financial crisis arrives.
While there are many reasons to fear for the longer term viability of the US dollar given America’s current misguided monetary policy and exponentially increasing debt & liabilities, the next few years could well see the greenback appreciate further by 50-100% relative to the world’s other major fiat currencies.
The QE program created substantial hedge fund interest in gold-related ETFs. Unfortunately, QE never created the inflation the funds had anticipated.
That’s because commercial banks held the QE money they received, “tight to the chest”, rather than loaning it to businesses and consumers.
In a nutshell, by enlarging the money supply while GDP was falling, the Fed created deflation.
So, if the Fed were to shrink the money supply now, or at least reduce its rate of growth, while GDP rises, and banks start making loans with their “QE booty” at the same time…. is that inflationary?
The answer is yes.
Who in good conscience wants to go their entire working lives supporting a government that wastes tax dollars on bombs, drones, spying on citizens, and bankrupting unborn generations?
It’s no wonder why the number of Americans renouncing their citizenship is increasing exponentially… and will likely continue to do so.
Renouncing US citizenship was free of charge until a couple of years ago. Then, overnight, the State Department imposed a $450 fee.
Yesterday they increased it once again– to $2,350.
That’s a 422% increase.
European Central Bank Head, Mario Draghi recently signaled Eurozone QE is Dead Ahead.
And the World has yet to deal with the Consequences of past and ongoing Fed, Japanese, and Chinese Monetary Policies. The coming Consequences of Central Bank QE and other Policies are reflected in the following Major Investors’ Actions and Analysts recommendations.
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:
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.
Gold drifted lower this week, with the price undermined by lack of interest on low volume and a slightly more hawkish tone in the FOMC minutes released on Wednesday.
The chart below, of gold and open interest on Comex, shows how the price has declined while open interest has hardly budged from its historically low level.