Timeline and event sequence is approximate, one
should not make make exact predictions regarding a dynamic macro economy
like the U.S.. "It will go something like this"
Let's skip the Orwellian Newspeak of QE and stick to the
Oldspeak – printing money - 600 Billion of it. QE1, the first round of
money printing was a bond buying blitz of about 2 Trillion over 2 years.
QE2 is about one-third the size, delivered in one-third the time. They
will also reinvest the principal of maturing bonds they own into new
government debt increasing QE2 by as much as another $300 billion.
The Fed will own more US Treasuries
than China.(868 Billion) We are buying our own debt with money printed
out of thin air.
So, they have continued to print the hell out of money at the same pace
and an additional 300 bill for good measure. On top of that, this
year, the Fed will buy $40 billion of investment banks toxic mortgages
every month. The Fed has shown now, through past history, they will
print as much money as necessary to avoid a deflationary depression.
The final debasement of the dollar has begun
and hyperinflation is the United States future.
The prices of nearly all agricultural commodities have
been moving up. In the past, cotton prices are up
54%, corn prices are up 29%,
soybean prices are up 22%, orange juice prices are up 17%, and sugar
prices are up
51% "you get the point, there is a lot
more". The year over year price of pork is up
60%. This may be the year consumers notice that consumer
commodity prices are moving up or the size of the packing is decreasing
while maintaining the same price. These higher commodity prices will
continue reaching the marketplace, monthly CPI will be at an annualized
rate of at least 5%. Food prices will continue to move up and other
higher commodity prices will begin to reach the market place. Meanwhile
consumers pay checks will remain stagnant due to large corporate,
government and small business cuts to maintain profitability from
increased commodity prices, budget constraints and government
regulations, such as Obama Care.
The Obama administration, the Fed, and the majority
Keynesian economics pundits will be singing the praises, "our
consumption economy is back, people are spending again, the economy is
moving in the right direction, look!, the market is at an all time
high!". That won't be the case, forced consumption spending through
inflation and voluntary exchange are much different as are high U.S.
stock market prices and the value of the U.S. dollar. Zimbabwe had the best
performing Stock Exchange in the world, but the worst paper currency.
Really," The Fed’s unending quantitative easing
(money printing) has acted like a stimulant drug on the market. The Fed
buys $40 billion of the investment banks toxic mortgages every month and
some of that money has found it’s way into the stock market.
Without the Fed the market would still be thousands of points lower".
(Lou Scatigna The Financial Physician) Soon, the American people
will begin to catch on. Real Annualized CPI could be pushing 10%. But,
the so-called quantitative easing will have pushed the value of the
dollar much lower. Perhaps the race to the bottom currency war, could
devolve into a trade war. With the commodity prices already rising
sharply, a trade war would force import prices up also.
Remember, at the end of the year we still probably have
a weak economy and still have emergency .25% interest rates that don't
seem to be sparking growth & investment for the past couple of years.
Assuming this is correct, this will deter the Fed from raising rates if
need be. There will also be a U.S. fiscal deficit that is close to 10%
of GDP annually, which is probably unsustainable—especially considering
that the total U.S. debt is well over 100% of Gross Domestic Product. QE
(money printing) plus debt & deficits is already making the markets
nervous. Wait till you see what happens when the average American get
nervous about the U.S. Economy and the U.S. Dollar. "Oh!, wait, that
reminds me, I have to get online and get some more silver coins, get to
Walmart and pick up another ten cases of coffee and non perishable
canned goods for my pantry (Non perishable food storage area). I don't'
think these prices will last much longer". - Editor
More to come - as the Austrian Economists have
predicted, the U.S. dollar should have already hyperinflated. What they
have missed or what they fail to mention is the fact that the United
States exports a large portion of their dollars. An ever increasing
demand for dollars allows them to continue printing for an extended
period of time before hyperinflation sets in.
Hint - After President Nixon closed the international
gold window in 1971, leaving the dollar a fully fiat currency or
hyperinflatable, Henry Kissinger went to the middle east and made deals
to protect oil producing countries as long as they price their oil in
dollars. The worlds largest oil producers price their oil in dollars
creating an ever increasing demand for the U.S. Dollar. This increasing
demand for the dollar allows the U.S. to export part of their inflation
and slow the inevitable onslaught of hyperinflation while they continue
to print. Economist Jerry Robinson (FTMDaily.com) refers to this as the
Petro/Dollar System. I would refer to it as a Psuedo World Reserve
currency that will eventually bite you in the ass. This is why middle
eastern foreign policy is so important to the United States.
The Dictator Saddam Hussein of Iraq, another large oil producing nation,
began selling oil priced in Euros instead of dollars, we all know what
happened to him. Needless to say, Iraq now prices oil in dollars. One
would guess, both U.S. - Iraq wars were to maintain the free flow of oil
at market prices, with an additional benefit of the later one being to
finish the sentence, one should say,
"maintain the free flow of oil at market prices and priced in U.S.
Moreover, as of right now
Iran is trading oil in a basket of currencies and Russia and China have
certain deals to trade oil and natural gas in their own currencies. So,
the saga continues!
Markets Hit All Time Highs
Here is a good article from the financial
physician explaining why the markets are up and the country is in
relatively poor fiscal shape
This week the Dow hit an all-time high, erasing the losses
experienced during the 2008 crash and economic crisis. Meanwhile, the
economy continues to struggle. Fourth quarter 2012 growth was non
existent, unemployment won’t budge from the official 8% rate (really
15%), and housing, is still depressed. So why has the stock market
soared to new Highs?
1. The Fed’s unending quantitative easing (money printing) has acted
like a stimulant drug on the market. The Fed buys $40 billion of the
investment banks toxic mortgages every month and some of that money has
found it’s way into the stock market. Without the Fed the market would
still be thousands of points lower.
2. The stock market has become the only game in town for investors.
Safe vehicles like bank accounts and treasury bonds offer paltry yields
while money market funds yield virtually 0%. Pensions and conservative
savers are being forced into the market in a effort to make some return
on their money. Retirees have really been thrown under the bus by
Bernanke. While the Fed bails out the banks and the stock market with a
zero interest rate policy for 5 years and counting the inflation beast
has awoken. Food, energy and health care have soared but the CPI is
inaccurately reported to be under 2%. Savers receive no income and at
the same time the cost of living has been rising. The retiree is in real
3. The market is going up because it is going up. What I mean by that
is when markets are rising others want part of the action resulting in a
self fulfilling prophecy. News of new market highs flash across
computers, newspapers and television news reports prompting more market
envy with the latecomers pushing stocks even higher. These late to the
party investors are the ones who will experience the most pain when the
market reverts to a level consistent with economic health.
Congratulation to all those investors who invested in the market in
2007 and early 2008, after five years you have a 0% annual rate of
Today the U.S. lost their
AAA credit rating. Fox Business ask could we lose our AAA just a few
months ago: - do these people in Treasury and the Admin know what is
going on? intentionally?
Peter Barnes of Fox Business “Is there a risk that the United States
could lose its AAA credit rating? Yes or no?”
Geithner’s response: “No risk of that.”
“No risk?” Barnes asked.
“No risk,” Geithner said.
Ben Bernanke Is Finished!
I love the way David Stockman,
Reagan's former budget director, still tells it like it
Never having lived through a hyperinflationary currency meltdown
makes it difficult to visualize how such an event may unfold. We know
from historical examples like the Weimar Republic and Zimbabwe that the
end result is wheel barrows full of paper currency being used to buy
basic staples like bread and rice. The following chart from the late
Howard Katz provides us an example of what the beginnings of a currency
meltdown look like, in this case Zimbabwe’s hyperinflation, and how
quickly it can devolve into completely financial chaos:
rate of increase in prices
The two charts below, based on
market history, give an idea of what is coming to the U.S. dollar.
If the path of dollar destruction continues, one must consider an
immediate move to commodities and tangible assets for wealth
Real News Group, The Conservative,
Laymen's terms, Today's mainstream media will not give you an objective
opposing view, so, we will find it for you.
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