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Doomsaying experts foresee economic devastation

USA Today

NEW YORK–Behind the mainstream Wall Street happy talk about more stable financial markets and an improving economy are grim warnings of tough times ahead from a small cadre of doomsayers who warn that the worst of the financial crisis is still to come.

Harry Dent, author of the new book The Great Crash Ahead, says another stock market crash is coming due to a bad ending to the global debt bubble. He has pulled back on his earlier prediction of a crash in 2012, as central banks around the world have been flooding markets with money, giving stocks an artificial short-term boost. But a crash is coming in 2013 or 2014, he warns. “This will be a repeat of 2008-09, only bigger, when it finally hits,” Dent told USA TODAY.

Gerald Celente, a trend forecaster at the Trends Research Institute, says Americans should brace themselves for an “economic 9/11″ due to policymakers’ inability to solve the world’s financial and economic woes. The coming meltdown, he predicts, will lead to growing social unrest and anti-government sentiment, a U.S. dollar with far less purchasing power and more people out of work.

Celente won’t rule out another financial panic that could spark enough fear to cause a run on the nation’s banks by depositors. That risk could cause the government to invoke “economic martial law” and call a “bank holiday” and close banks as it did during the Great Depression.

“We see some kind of threat of that magnitude,” Celente, publisher of The Trends Journal newsletter, warned in an interview.

Robert Prechter, author of Conquer the Crash, first published in 2002 and updated in 2009, is still bearish. He says today’s economy has similarities to the Great Depression and warns that 1930s-style deflation is still poised to cause financial havoc. Prechter predicts that the major U.S. stock indexes, such as the Dow Jones industrials and Standard & Poor’s 500, will plunge below their bear market lows hit in March 2009 during the last financial crisis. The brief recovery will fail as it did in the 1930s, he says.

2 very different viewpoints

If he’s right, stocks would lose more than half of their value. “The economic recovery has been weak, so the next downturn should generate bad news in a big way,” Prechter said in an e-mail interview. “For the third time in a dozen years, the stock market is in a very bearish position.

These dire forecasts differ sharply with the brighter outlooks being espoused by the bulls, or optimists, on Wall Street. Recent stock performance and fresh readings on the economy also suggest a future that is less gloomy than the doomsayers predict.

The Dow, for instance, is in rebound mode and has climbed back to levels not seen since the early days of the financial crisis in May 2008. Tech stocks in the Nasdaq composite are trading at levels last seen in 2000. Data on auto sales, manufacturing and consumer confidence have been firming. Job creation is also on the rise. The unemployment rate dipped to 8.3% in January, its lowest level in three years.

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'America’s Per Capita Government Debt Worse Than Greece,' as well as Ireland, Italy, France, Portugal, and Spain:

I don't know why this would not be plastered all over the Internet to scare the hell out of the U.S. population and wake them up, "worse than Greece". A chart passed along to the Weekly Standard from Senator Sessions office, ranking budget committee member.

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Postal Service loses $5.1 billion in fiscal 2011

WASHINGTON (Reuters) - The Postal Service reported a net loss of $5.1 billion for its 2011 fiscal year and on Tuesday warned that could run out of cash by September of next year if Congress did not offer relief. The rise of e-mail and online bill payments combined with the recession has eroded mail volume, which fell by 3 billion pieces, or 1.7 percent, during 2011. The Postal Service, which receives no taxpayer money for operations, says it is limited in how it can respond to shrinking revenues and high labor costs.

Operating revenue for the 2011 fiscal year ended September 30 was $65.7 billion, down 2.1 percent from 2010. Revenue from First Class Mail, the Postal Service's most profitable product, fell 5.8 percent, overwhelming gains in shipping and advertising mail. Joseph Corbett, the Postal Service's chief financial officer, said during a conference call with reporters that the agency could run out of cash by the end of fiscal year 2012. "We will likely nearly run out or run out of money at the end of this year, and ... if the economy turns south or we are unable to achieve our plan, we could run out of cash earlier," he said. The losses could add pressure on Congress to pass legislation offering relief to the cash-strapped agency. More.....
 

Postal Service proposing cutting 120,000 jobs

Now that the small tremors in the stock market begin to smooth out, look for massive State , Federal and City layoffs to begin. Towards the end of the year, we will begin to see cities filing for bankruptcy protection. States are going to be downgraded and municipal bond problems will arise. - Gary

Also wants union contracts, employee health and pension benefits changed

By RANDOLPH E. SCHMID

The financially strapped U.S. Postal Service is considering cutting as many as 120,000 jobs.

Facing a second year of losses totaling $8 billion or more, the agency also wants to pull its workers out of the retirement and health benefits plans covering federal workers and set up its own benefit systems.

Congressional approval would be needed for either step, and both could be expected to face severe opposition from postal unions which have contracts that ban layoffs.

The post office has cut 110,000 jobs over the last four years and is currently engaged in eliminating 7,500 administrative staff. In its 2010 annual report, the agency said it had 583,908 career employees.

The loss of mail to the Internet and the decline in advertising caused by the recession have rocked the agency.

Postal officials have said they will be unable to make a $5.5 billion payment to cover future employee health care costs due Sept. 30. It is the only federal agency required to make such a payment but, because of the complex way government finances are counted, eliminating it would make the federal budget deficit appear $5.5 billion larger.

If Congress doesn’t act and current losses continue, the post office will be unable to make that payment at the end of September because it will have reached its borrowing limit and simply won’t have the cash to do so, the agency said earlier.

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Not Everyone is Buying it: Small Biz Woman Rips Obama

As liberals begin to attack the validity of S&P's downgrade, those in some of the small businesses are not buying it.

“He’s not going to be known as the first Black President, he’s going to known as the President who had a downgrade.”

U.S. loses their AAA Credit rating?

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.

What Can We Expect from the Debt Crisis?

The most likely conclusions to the political debate over the US debt and it's phony deadline

1. A compromise that looks good for the cameras and does nothing meaningful to cut entitlement spending and other previous government spending.

Ron Paul: "Even under the Boehner plan the spending is going up over a trillion dollars. So all these cuts are fictitious, they’re only cut in the CBO-projected increases. So it’s all a fraud - we know this is all political gamesmanship. This bill has nothing to do with solving the problems."

2. Republicans and Democrats (The Ruling Class) have just negotiated away the future of our children behind closed doors.

3. A downgrade of US debt by major rating agencies.

4. A Continued slide of the dollar, which is probably the stealth policy of this administration and Treasury, this will lower the price of exports and inflate the debt away.  

By the end of the year, the growth rate of quarters 1 and 2 will be revised down to slightly negative. This happened with the growth in 2008 some 18 months later. There is a reason Bernanke of the Fed has had interest rates low for so long. There is a reason Obama's economic team just left and there is a reason the Secretary of Treasury will split as soon as this bad debt deal gets done. When the growth numbers begin to be revised down, Bernanke will pull the trigger on QE3 or some other named money printing program further diluting our currency.

Ron Paul: "August 2nd (The Debt Crisis) is more related to the month of August being off, because there’s nothing magic about August 2nd. It is a bunch of fear mongering going on that the checks won't come to the Social Security beneficiaries. But what they ought to worry about is all of us getting checks in money that has less value; that is the default this country ought to be worried about."

5. More quantitative easing (Money Printing) resulting in inflation.

They are celebrating a debt farce while the economic wheels of the nation are coming off. All administrations have the ability to manipulate the economic numbers. This was evidenced by the fact that the previous recession started 3 quarters earlier than the collapse of 2008-2009. They papered that over with tarp, larger budget spending, stimulus packages and quantitative easing. We probably have started the double dip recession as of now, or never really came out of the previous one, this will be evident by the end of the year. The return of massive layoffs has been hitting the headlines a lot lately. HSBC announced this morning that they will layoff 30,000 workers. BlackBerry phones is cutting 2,000, Research in Motion plans to cut 10.5% of its work force, Cisco Systems is cutting 6,500, Lockheed Martin plans to cut 6,500, and of course Borders is closing all stores laying off thousands. Massive layoffs are always a bit deceiving since this is bad for Main Street, but not necessarily bad for Wall Street as profits often increase as companies cut their workforces, especially in slow times. Source - National Inflation Association. Nationwide housing values have fallen and social services and teachers are partially funded by local real estate taxes. This will be the next round of massive layoffs that will dwarf the one above provided by NIA.

Ben Bernanke Is Finished!

I love the way David Stockman, Reagan's former budget director, still tells it like it really is.

The People Fiddle as the Country Burns

By Greg Hunter’s USAWatchdog.com

Thank goodness the Casey Anthony case is over! The jury thinks she is not guilty of murder. I don’t know if they got right or wrong, but I do know many dollars and much air time was devoted to a story that will have zero effect on the lives of 99.999% of Americans. I think the discovery of a walking, talking Martian would have gotten about the same attention. I guess this stuff sells newspapers and gets TV ratings but is sure not what U.S. citizens should be focused on. Maybe that’s the point. Are stories like Casey Anthony just our version of a Roman Circus? Are the masses being kept preoccupied with events that have no bearing on their lives while the country burns in a cloud of debt? I think so.

Most people have no idea of the perilous position the U.S. is in. One wrong move by our government or even a government the size of Greece, Portugal, Spain or Italy, and there could be a daisy chain of debt explosions around the globe. The people are in the dark, and I blame the mainstream media (MSM.) A story that should have people really terrified is the battle going on in Washington D.C. over raising the debt ceiling some $2.4 trillion dollars. If the issue is not settled by early August, the U.S. could have the mother of all debt defaults. The Democrats and Republicans cannot agree on a package that contains both tax increases and budget cuts. President Obama has called for a “balanced approach.” Bloomberg reported yesterday, “The Obama administration and congressional leaders are working to complete a deal on a long-term budget reduction package by July 22 as part of a plan to raise the $14.3 trillion debt limit. The Treasury Department has said that its borrowing authority expires Aug. 2 and could result in a first-ever U.S. default on its obligations. Obama’s comments came as Democrats were intensifying a showdown with Republicans over whether tax increases should be part of a deficit-cutting deal before the Aug. 2 deadline.” (Click here for the complete Bloomberg report.)

Everyone should be watching this debt ceiling negotiation because, no matter the outcome, it will affect the lives of 99.999% of Americans and many people around the globe. If a deal is not reached, catastrophic consequences would follow. In his latest report, economist John Williams from Shadowstats.com said, “Such a default would be a serious mistake, and it most likely will be avoided as political games push the limits of brinksmanship. An outright default likely would trigger massive dumping of the U.S. dollar, and it would accelerate movement to much higher U.S. inflation and, ultimately, to hyperinflation.” According to Williams, there are $12 trillion in liquid dollar assets held outside the U.S. That is where the hyperinflation would come from.

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What Accelerated Hyperinflation Looks Like

Mac Salvo

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:

The Zimbabwe dollar took roughly five years to completely lose the confidence of its people. But because the US dollar is the world’s reserve currency all bets are off in terms of time lines. Given our dependence on debt issuance and foreign investment to cover our expenses, there’s a distinct possibility that shouldn’t be ignored. As James Rawles discussed in his book Patriots: Surviving the Coming Collapse and Troy Grice in his book Indivisible, if our foreign creditors pull the plug on lending, the entire monetary system of the United States could collapse in one fell swoop. This is certainly a possibility.

Whatever the triggering mechanism, and however long it takes for the American public and our foreign creditors to lose confidence, the end result will be the same. We often talk about store shelves emptying if and when the dollar becomes worthless, but another likelihood in such an event would be that store shelves remain fairly well stocked simply because the people have nothing of value to acquire those goods (and eventually, that leads to riots and political collapse).

Website:www.shtfplan.com

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More Americans Raiding 401(k)s Than Ever

For a lot of folks, it is all about just getting by.

Moneynews.com

More Americans are breaking into their 401(k) nest eggs than ever before, according to a new report by consulting firm Aon Hewitt.

Experts warn that employees weren’t saving enough to begin with and that the steady outflow of funds is putting the retirement savings of millions of people at risk.

“The idea was to make the plans flexible and give people access to their money earlier,” said Barbara Hogg, a retirement expert with Aon Hewitt, tells The Fiscal Times.

“That gives people a really hard choice between trading future dollars for future spending and meeting immediate needs. With the financial crisis, we see people dipping in.”

According to the report, 42 percent of employees with defined-contribution plans who lost their jobs in 2010 cashed out their 401(k)s entirely. Less than 30 percent rolled their assets over into an IRA.

Approximately 7 percent of 401(k) holders — 2 percent more than before the recession — withdrew some funds from their accounts in 2010. Almost 28 percent took loans directly from their accounts, 6 percent more than before the recession.

Twenty percent of those withdrawals were for financial hardship, half of which were made because accountholders were facing eviction.

The San Francisco Bay View reports that, with 10,000 foreclosures filed every day in the U.S. and banks refusing to work with homeowners or tenants, the number of evictions is likely to rise.

According to the Woodstock institute, over 99 percent of homes lost to foreclosure since 2008 have gone back to the lender and not to a family

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Why Men Have Dogs:

Happy Father's Day Men

1. The later you are, the more excited your dogs are to see you.
2. Dogs don’t notice if you call them by another dog’s name.
3. Dogs like it if you leave a lot of things on the floor.
4. A dog’s parents never visit.
5. Dogs agree that you have to raise your voice to get your point across.
6. You never have to wait for a dog; they’re ready to go 24 hours a day.
7. Dogs like to go hunting and fishing.
8. A dog will not wake you up at night to ask, "If I died, would you get another dog?"
9. If a dog has babies, you can put an ad in the paper and give them away.
10. A dog will let you put a studded collar on it without calling you a pervert.
11. If a dog smells another dog on you, they don’t get mad. They just think it’s interesting.
13.. Dogs like to ride in the back of a pickup truck.

And last, but not least:

14.. If a dog leaves, it won’t take half of your stuff.

From Jim Sinclair's mineset

Greek Riots Happening Now!

This is what happens when a country goes bankrupt and has to cut spending. How come we do not see this on NBC, CBS, and ABC?

End of The Dollar?

The Largest Debtor Nation In the History of the World!

As Gold Prices Soar, Texas University Has About $1B In Gold Bars

I believe the dye is now cast, the cat is out of the bag, precious metals are screaming get out of the dollar as soon as you can. Just recently, Pimco, the largest bond fund in the U.S. divested itself of all U.S. treasury bonds and now large institutions are buying gold. Continue to accumulate gold and silver, gold is at an all time high and since early February Silver has risen to $43/ounce from $27.80, a massive 55% increase in just a couple of months. Trillion dollar U.S. deficits are projected out as far as the eye can see. The financial markets are aware of this and are beginning to behave like we have a major inflation problem moving our way. Take a look at the 12 warning signs of hyperinflation article below.

Bloomberg.com

The University of Texas Investment Management Co., the second-largest U.S. academic endowment, took delivery of almost $1 billion in gold bullion and is storing the bars in a New York vault, according to the fund’s board.

The decision to turn the fund’s investment into gold bars was influenced by Kyle Bass, a Dallas hedge fund manager and member of the endowment’s board, Zimmerman said at its annual meeting on April 14. Bass made $500 million on the U.S. subprime-mortgage collapse.

“Central banks are printing more money than they ever have, so what’s the value of money in terms of purchases of goods and services,” Bass said yesterday in a telephone interview. “I look at gold as just another currency that they can’t print any more of.”

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Now, The Rest of the Fiscal Story!

Government avoids shutdown cuts 38 billion!

Millions of Americans expected $100 billion in cuts on the way to rolling back the budget to 2008 levels. So, now the Republicans are drawing a line in the sand. They absolutely will not raise the debt limit to over 100 trillion until they get their 100 billion cut and they really, really, really mean it this time. "Yes, I meant to say 100 trillion and really, really, really." 

You can't pay minimum payment on your last maxed out credit card to reduce your total debt. The cut should have been between 100 and 653.4 billion if they were serious. Have you ever tried to pay a credit card off at minimum payment for twenty five years, the interest will eat you up. The economy is supposed to be growing, the interest rates are still at emergency 0-.25 % what happens when the interest rates rise? Can we service our debt?  Will they ever rise again? Someone in the Government call Dave Ramsey! Just don't ask him about gold and silver, stick with the debt.

(CNSNews.com) - The federal debt increased $54.1 billion in the eight days preceding the deal made by President Barack Obama, Senate Majority Leader Harry Reid (D.-Nev.) and House Speaker John Boehner (R.-Ohio) to cut $38.5 billion in federal spending for the remainder of fiscal year 2011, which runs through September.

The debt was $14.2101 trillion on March 30, according to the Bureau of the Public Debt, and $14.2642 on April 7.

Since the beginning of the fiscal year on Oct. 1, 2010, the national debt has increased by $653.4 billion.

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12 warning signs that hyperinflation is coming!

The National Inflation Organization's signs of hyperinflation from Jerome Corsi's Red Red Alert. "In our estimation, the most likely time frame for a full-fledged outbreak of hyperinflation is between the years 2013 and 2015," the National Inflation Association warns. "Americans who wait until 2013 to prepare will most likely see the majority of their purchasing power wiped out. It is essential that Americans begin preparing for hyperinflation immediately." I think they are being conservative on their time frame to avoid being labeled alarmist and would be prepared by next year. Keep an eye on energy and food/commodity prices at the end of this summer - Editor.

1) The Federal Reserve is buying 70 percent of U.S. Treasuries. In recent months, central bank purchases of U.S. treasuries have declined from 50 percent to 30 percent, while Fed purchases have increased from 10 percent to 70 percent.

2) The private sector has stopped purchasing U.S. Treasuries. The private sector, once responsible for purchasing up to 30 percent of U.S. Treasury debt, has stopped buying Treasuries. At the same time, top bond funds, like the PIMCO Total Return Fund, once the largest private sector owner of U.S. government bonds, has reduced its holdings of U.S. Treasury debt to zero.

3) China has begun moving away from the U.S. dollar as a reserve currency. Today, the dollar is no longer backed by gold, and China has the world's largest manufacturing base. The People's Bank of China has agreed to allow the yuan to be used as a reserve currency. All China needs to do is use its $1.15 trillion in U.S. dollar reserves to accumulate gold and use that gold to back the yuan.

4) Japan is beginning to dump U.S. Treasuries. Japan is the second largest holder of U.S. Treasury debt, with $885.9 billion in U.S. dollar reserves. Japan may have to spend as much as $300 billion over the next year to rebuild after the compound disaster of the recent earthquake, tsunami and nuclear meltdown. Japan is likely to reduce their Treasury holdings and slow their purchases of new Treasuries as the nation focuses on rebuilding.

5) The fed funds rate remains near zero. The Fed has held the fed funds rate at 0.00-0.25 percent since Dec. 16, 2008, a period of 27 months. This low of a rate is unprecedented, with banks being flooded with excess liquidity of U.S. dollars. The dollar has become the new "carry trade," available for member banks to borrow at zero and use for speculation in the stock, commodities and currencies markets.

6) Year-over-year CPI growth has increased 92 percent in three months. An increase in year-over-year CPI (Consumer Price Index) growth from 1.1 percent in November 2010 to 2.11 percent in February 2011 means that the CPI's growth rate has increased by approximately 92 percent over a period of just three months.

7) Mainstream media denying Fed's target passed. The media are now claiming that the Fed's informal inflation target of 1.5 percent to 2 percent is based off year-over-year changes in the Bureau of Labor Statistics core-CPI figures. Core-CPI excludes food and energy prices. Including food and energy in the calculation would leave no doubt that the Fed's inflation target is not being met.

8) Record U.S. budget deficit in February 2011 was $222.5 billion. The federal budget deficit in February 2011, $222.5 billion, was more than the entire fiscal year of 2007. February's deficit on an annualized basis was $2.67 trillion.

9) High budget deficit as percentage of expenditures. The projected U.S. budget deficit for fiscal year 2011 of $1.645 trillion is 43 percent of total government expenditures in 2011 of $3.819 trillion. That is almost the same level of Brazil's budget deficit as a percentage of expenditures just before Brazil experienced hyperinflation in 1993, and the ratio is higher than Bolivia experienced right before Bolivia's hyperinflation in 1985.

10) Obama lies about foreign policy. Obama campaigned that he would take troops out of Iraq. Now Obama has increased troop levels in Afghanistan, and he is on the verge of sending troops into Libya, causing a third U.S. war in the Middle East. The U.S. is now spending $1 trillion annually on military expenses, including the costs of maintaining more than 700 U.S. military bases in 135 countries around the world.

11) Obama changes definition of balanced budget. Obama has recently redefined "balanced budget" to exclude interest payments on the national debt because the White House knows interest payments are about to explode and it will be impossible to truly balance the budget.

12) U.S. faces largest ever interest payment increases. The U.S. is almost certain to experience a large spike in long-term bond yields, as creditors demand more compensation for financing U.S. debt. Interest payments could reach $500 billion within the next year or two, and more than $1 trillion by mid-decade. When interest payments reach $1 trillion, interest will account for 30 to 40 percent of government tax receipts, up from interest payments being only 9 percent of tax receipts today. No nation has ever seen interest payments on national debt reach 40 percent of tax receipts without experiencing hyperinflation.

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Food Inflation Kept Hidden in Smaller Packages

 NYT

Chips are disappearing from bags, candy from boxes and vegetables from cans.

As an expected increase in the cost of raw materials looms for late summer, consumers are beginning to encounter shrinking food packages.

With unemployment still high, companies in recent months have tried to camouflage price increases by selling their products in tiny and tinier packages. So far, the changes are most visible at the grocery store, where shoppers are paying the same amount, but getting less.

For Lisa Stauber, stretching her budget to feed her nine children in Houston often requires careful monitoring at the store. Recently, when she cooked her usual three boxes of pasta for a big family dinner, she was surprised by a smaller yield, and she began to suspect something was up.

“Whole wheat pasta had gone from 16 ounces to 13.25 ounces,” she said. “I bought three boxes and it wasn’t enough — that was a little embarrassing. I bought the same amount I always buy, I just didn’t realize it, because who reads the sizes all the time?”

Ms. Stauber, 33, said she began inspecting her other purchases, aisle by aisle. Many canned vegetables dropped to 13 or 14 ounces from 16; boxes of baby wipes went to 72 from 80; and sugar was stacked in 4-pound, not 5-pound, bags, she said.

Five or so years ago, Ms. Stauber bought 16-ounce cans of corn. Then they were 15.5 ounces, then 14.5 ounces, and the size is still dropping. “The first time I’ve ever seen an 11-ounce can of corn at the store was about three weeks ago, and I was just floored,” she said. “It’s sneaky, because they figure people won’t know.”

In every economic downturn in the last few decades, companies have reduced the size of some products, disguising price increases and avoiding comparisons on same-size packages, before and after an increase. Each time, the marketing campaigns are coy; this time, the smaller versions are “greener” (packages good for the environment) or more “portable” (little carry bags for the takeout lifestyle) or “healthier” (fewer calories).

Where companies cannot change sizes — as in clothing or appliances — they have warned that prices will be going up, as the costs of cotton, energy, grain and other raw materials are rising.

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There is Some Bad Things Coming!

Hopefully I am Wrong , But, I do not think So! I do not want to live in the world I am going to tell you about. We are living in unbelievable times.

#1 I think there is a fifty percent chance the stock market will crash this year. Japan will have to sell our bonds to rebuild their country Bernanke will have to continue moneitizing our debt and we just got into another dammed war. There will be a run on U.S.Treasury Bonds and Municipal bonds and possibly a dollar melt down, by the end or 2011 or middle of 2012. Get the hell out of long bonds now! Think physical gold and silver.

# 2 You want to buy the market when there is blood in the streets and it may be coming at the end of this year. (Buy at the funeral and sell at the wedding) Be ready to buy blue chips at the bottom!

#3 Where the hell do you want to put your money? Food, Energy and gold and silver. What do you mean food & energy? A relative short term emergency, food storage, gas generator or fuel to bug out if it gets really bad. No, I am not a conspiracy theorist. I believe in a emergency plan in desperate times, that may be coming. The middle class is disappearing in our country. I am surprised there have not been indictments in the financial industry.

More to come....      

U.S. Dollar Collapse Getting Closer?

China this morning reported 4.9% price inflation for the month of February, exceeding analyst expectations of 4.8%. With China now mimicking the U.S. Bureau of Labor Statistics and taking steps to artificially manipulate their consumer price index (CPI) numbers as low as possible, it is likely that real price inflation in China is now closer to 10%. China was at least smart enough to raise interest rates last month by 25 basis points to 6.06%, while the U.S. Fed continues to leave interest rates near zero with there being absolutely no talk of the Federal Reserve ever raising interest rates again. China will be successful at containing inflation, as U.S. inflation spirals out of control and becomes the greatest economic crisis in American history.

From April to August of 2010, the last time the Federal Reserve allowed its balance sheet to shrink, the Dow Jones fell by over 1,000 points. If Bernanke doesn't soon begin to leak out the strong likelihood of QE3, we could see the stock market decline by 1,000 points or more, which will force Bernanke into launching QE3. If we see a major sell off in stocks, NIA doesn't necessarily think that precious metals prices will follow. In fact, we could see gold and silver rise along with the Dow Jones falling. NIA projects the Dow Jones to gold ratio to decline to 6.5 in 2011. This means even if the Dow Jones fell to below 11,000, we still believe gold is likely to rise to around $1,600 to $1,700 per ounce this year, with silver soaring to around $42 to $44 per ounce. NIA believes the worst decision any American can make is to sell their gold and silver and go long U.S. dollars, hoping to buy their precious metals back at a lower price in the future.
National Inflation Association more....

By the end of this summer, 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. By the end of the year, 2012 will be the year of inflation! That will be the beginning, and of course, they will have to print more money "to help the people". You will know when it is over when there is a “new (or devalued) dollar” and possibly new currencies across the Western world. - Editor Jan 13, 2012 See - 2012 may end in tears

Gold	Dollar	Silver

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