Sunday, October 31, 2010
Friday, October 29, 2010
Hyperinflation by 2012?
Gonzalo Lira thinks we could see hyperinflation by 2012:
I think he is spot on. This isn't going to directly cause the debt collapse that I have been warning about in the blog - countries can survive for years with hyperinflation - but it will make life very different. I think a temporary solution would be to use some other currency for savings and for day to day purchases, maybe the Canadian dollar.
Therefore, I am confident in predicting the following sequence of events:
• By March of 2011, once higher commodity prices reach the marketplace, monthly CPI will be at an annualized rate of not less than 5%.
• By July of 2011, annualized CPI will be no less than 8% annualized.
• By October of 2011, annualized CPI will have crossed 10%.
• By March of 2012, annualized CPI will cross the hyperinflationary tipping point of 15%.
After that, CPI will rapidly increase, much like it did in 1980.
--http://gonzalolira.blogspot.com/2010/10/signs-hyperinflation-is-arriving.html
I think he is spot on. This isn't going to directly cause the debt collapse that I have been warning about in the blog - countries can survive for years with hyperinflation - but it will make life very different. I think a temporary solution would be to use some other currency for savings and for day to day purchases, maybe the Canadian dollar.
Sunday, October 24, 2010
Sunday, October 10, 2010
Massive inflation coming?
I don't feel like posting the links, but combine: 1) news that foreclosures have been halted in most states, and 2) news that there may be $2 trillion+ of quantitative easing coming soon. I think there is a plan to flood the system with cheap dollars in hopes that the real estate market may recover and also to help the jobless. And to prevent a stock market collapse.
It isn't going to work. While the sentiment may be good, it doesn't justify the actions taken. Is stealing ok if I give the money to a homeless shelter? No. The flood of cheap money will go into the pockets of just a few well-connected people who will just dump it in the stock market and won't buy real estate. It won't help the homeless and jobless at all.
And it will cause a little inflation, but will increase the deficit even more because of the automatic cost-of-living increases and higher interest rates and higher oil prices. And once inflation starts, it takes on a life of its own.
While this action alone won't cause the type of collapse that I have been warning about on this blog, I think it will speed up the process.
It isn't going to work. While the sentiment may be good, it doesn't justify the actions taken. Is stealing ok if I give the money to a homeless shelter? No. The flood of cheap money will go into the pockets of just a few well-connected people who will just dump it in the stock market and won't buy real estate. It won't help the homeless and jobless at all.
And it will cause a little inflation, but will increase the deficit even more because of the automatic cost-of-living increases and higher interest rates and higher oil prices. And once inflation starts, it takes on a life of its own.
While this action alone won't cause the type of collapse that I have been warning about on this blog, I think it will speed up the process.
Wednesday, October 6, 2010
US Debt increased 65% in just 2 years!
On 9/1/2008, the US debt held by the public was $5,479 billion.
On 9/30/2010, the US debt held by the public was $9,023 billion.
That's an increase of 65%!
Does anybody see a problem?
On 9/30/2010, the US debt held by the public was $9,023 billion.
That's an increase of 65%!
Does anybody see a problem?
Tuesday, October 5, 2010
How long does it take to spend $500 billion?
The total government debt as of 9/30/10 was $13,561 billion. As of 5/28/10, it was $12,992 billion. So the answer is: only 4 months.
This is actually an improvement, since the last time I asked a similar question, I determined that it took only 6 months to spend 1 trillion dollars.
This is actually an improvement, since the last time I asked a similar question, I determined that it took only 6 months to spend 1 trillion dollars.
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