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  1. #1
    Believe. Parker2112's Avatar
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    Back in late August, I argued that hyperinflation would be triggered by a run on Treasury bonds. I described how such a run might happen, and argued that if Treasuries were no longer considered safe, then commodities would become the store of value.

    Such a run on commodities, I further argued, would inevitably lead to price increases and a rise in the Consumer Price Index, which would initially be interpreted by the Federal Reserve, the Federal government, as well as the commentariat, as a good thing: A sign that “the economy is recovering”, a sign that “normalcy” was returning.

    I argued that—far from being “a sign of recovery”—rising CPI would be the sign that things were about to get ugly.

    I concluded that, like the stagflation of ‘79, inflation would rise to the double digits relatively quickly. However, unlike in 1980, when Paul Volcker raised interest rates severely in order to halt inflation, in today’s weakened macro-economic environment, that remedy is simply not available to Ben Bernanke.

    Therefore, I predicted that inflation would spiral out of control, and turn into hyperinflation of the U.S. dollar.

    A lot of people claimed I was on drugs when I wrote this.

    Now? Not so much.

    In my initial argument, I was sure that there would come a moment when Treasury bond holders would realize that they are the New & Improved Toxic Asset—as everyone knows, there is no way the U.S. Federal government can pay the outstanding debt it has: It’s simply too big.

    So I assumed that, when the market collectively realized this, there would be a panic in Treasuries. This panic, of course, would lead to the e in commodities.

    However, I am no longer certain if there will ever be such a panic in Treasuries. Backstop Benny has been so adroit at propping up Treasuries and keeping their yields low, the Stealth Monetization has been so effective, the TBTF banks’ arbitrage trade between the Fed’s liquidity windows and Treasury bond yields has been so lucrative, and the bond market itself is so aware that Bernanke will do anything to protect and backstop Treasuries, that I no longer think that there will necessarily be such a panic.

    But that doesn’t mean that the second part of my thesis—commodities rising, which will trigger inflation, which will devolve into hyperinflation—will not occur.

    In fact, it is occurring.

    The two key commodities that have been rising as of late are oil and grains, specifically wheat, corn and livestock feed. The BLS report on Producer Price Index of commodities is here.

    Grains as a class have risen over 33% year-over-year. Refined oil products have risen just shy of 13%, with home heating oil rising 18% year-over-year. In other words: Food, gasoline and heating oil have risen by double digits since 2009. And the 2010-‘11 winter in the northern hemisphere is approaching.

    A friend of mine, SB, a commodities trader, pointed out to me that big producers are hedged against rising commodities prices. As he put it to me in a private e-mail, “We sometimes forget that the commodity markets aren’t solely speculative. Most futures contracts are bought by companies who use those commodities in their products, and are thus hedging their costs to produce those products.”

    Very true: But SB also pointed out that, hedged or not, the lag time between agricultural commodities and the markets is about six-to-nine months, on average. So he thought that the rise in grains, which really took off in June–July, would hit the supermarket shelves in January–March.

    He also pointed out that, with higher commodity costs and lower consumption, companies are going to be between the Devil and the deep blue sea. My own take is, if you can’t get more customers, then you’re just gonna have to charge more from the ones you got.

    Coupled to these price increases is the ongoing Currency War: The U.S.—contrary to Secretary Timothy Geithner’s statements—is trying to debase the dollar, so as to make U.S. exports more attractive to foreign consumers. This has created strains with China, Europe and the emerging markets.

    A beggar-thy-neighbor monetary policy works for small countries getting out of a hole of their own making: It doesn’t work for the world’s largest single economy with the world’s reserve currency, in the middle of a Global Depression.

    On the contrary, it creates a backlash; the ongoing tiff over rare-earth minerals with China is just the beginning. This could easily be exacerbated by clumsy politicking, and turn into a full-on trade war.

    What’s so bad with a trade war, you ask? Why nothing, not a thing—if you want to pay through the nose for imported goods. If you enjoy paying 10, 20, 30% more for imported goods—then hey, let’s just stick it to them China-men! They’re still Commies, after all!

    Furthermore, as regards the Federal Reserve policy, the upcoming Quan ative Easing 2, and the actions of its chairman, Ben Bernanke: There is an increasing sense in the financial markets that Backstop Benny and his Lollipop Gang don’t have the foggiest clue about what they’re doing.

    Consider:

    Bruce Krasting just yesterday wrote a very on-the-money précis of the trial balloons the Fed is floating, as regards to QE2: Basically, Bernanke through his WSJ mouthpiece said that the Fed was going to go for a cautious, incrementalist approach, vis-à-vis QE2: “A couple of hundred billion at a time”. You know: “Just the tip—just to see how it feels.”

    But then on the other hand, also just yesterday, Tyler Durden at Zero Hedge had a justifiable freak-out over the NY Fed asking Primary Dealers for their thoughts on the size of QE2. According to Bloomberg, the NY Fed was asking the dealers how big they thought QE2 would be, and how big they thought it ought be: $250 billion? $500 billion? A trillion? A trillion every six months? (Or as Tyler pointed out, $2 trillion for 2011.)

    That’s like asking a bunch of junkies how much smack they want for the upcoming year—half a kilo? A full kilo? Two kilos?

    What the you think the junkies are gonna say?

    Between BK’s clear reading of the tea leaves coming from the Wall Street Journal, and TD’s also very clear reading of the tea leaves by way of Bloomberg, you’re getting a seriously contradictory message: The Fed is going to lightly tap-tap-tap liquidity into the markets—just a little—just a few hundred billion dollars at a time—

    —while at the same time, the Fed is saying to the Primary Dealers, “We’re gonna make you guys happy-happy-happy with a righteously sized QE2!”

    The contradictory messages don’t pacify the financial markets—on the contrary, they make the markets simultaneously contemptuous of Bernanke and the Fed, while very frightened as to what they will ultimately do.

    What happens when the financial markets don’t really know what the central bank is going to do, and suspect that the central bankers themselves aren’t too clear either?

    Guess.

    So to sum up, we have:
    • Rising commodity prices, the effects of which (because of hedging) will be felt most severely in the period January–March of 2011.
    • A beggar-thy-neighbor race-to-the-bottom Currency War, that might well devolve into a Trade War, which would force up prices on imported goods.
    • A Federal Reserve that does not seem to know what it is doing, as regards another round of Quan ative Easing, which is making the financial markets very nervous—nervous about the Fed’s ultimate responsibility, which is safeguarding the U.S. dollar.
    • A U.S. economy that is weak to the point of collapse, where not even 0.25% interest rates are sparking investment and growth—and which therefore prohibits the Fed from raising interest rates, if need be.
    • A U.S. fiscal deficit which is close to 10% of GDP annually, and which is therefore unsustainable—especially considering that the total U.S. fiscal debt is well over 100% of GDP.
    These factors all point to one and the same thing:

    An imminent currency collapse.

    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.

    What the mainstream commentariat will make of all this will be really something: When CPI reaches 5% by the winter of 2011, pundits and economists and the Fed and the Obama administration will all say the same thing: “Happy days are here again! People are spending! The economy is back on track!”

    However, by the late spring, early summer of 2011, people will realize what’s going on—and the Federal Reserve will initially be unwilling to drastically raise interest rates so as to quell inflation.

    Actually, the Fed won’t be able to raise rates, at least not like Volcker did back in 1980: The U.S. economy will be too weak, and the Federal government’s balance sheet will be too distressed, with it’s $1.5 trillion deficit. So at first, the Fed will have to let the rising inflation rate slide, and keep trying hard to explain it away as “a sign of a recovering economy”.

    Once the Fed realizes that the rising CPI is not a sign of a reignited economy, but rather a sign of the collapsing dollar, they will pursue a puerile “inflation fighting” scheme of incremental interest rate hikes—much like G. William Miller, the Chairman of the Fed from January of ‘78 to August of ‘79, pursued so unsuccessfully.

    2012 will be the bad year: I predict that hyperinflation’s tipping point will be no later than the first quarter of 2012. From there, it will accelerate. By the end of 2012, I would not be surprised if the CPI for the year averaged 30%.

    By that point, the rest of the economy—unemployment, GDP, all the rest of it—will be in the toilet. By that point, the rest of the economy will no longer matter: The collapsing dollar will make 2012 the really really bad year of our Global Depression—which is actually kind of funny.

    It’s funny because, as you know, I am a conservative Catholic: I of course put absolutely no stock in the ridiculous notion that “The Mayans predicted our civilization’s collapse in 2012!”—that’s all rubbish, as far as I’m concerned.

    It’s just one of those cosmic jokes that 2012 will turn out to be the year the dollar collapses, and the larger world economies go down the tubes.

    As cosmic jokes go, all I’ve got to say is this:

    Good one, God.
    http://gonzalolira.blogspot.com/2010...-arriving.html

  2. #2
    uups stups! Cant_Be_Faded's Avatar
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    We will have hyperstagflation not hyperinflation.

  3. #3
    The Money Team DMX7's Avatar
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    Yawn... More "predictions"...

  4. #4
    W4A1 143 43CK? Nbadan's Avatar
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    Commodities usually rise during periods of slow or no growth as people look for larger annual years than safer bonds and stocks or treasuries offer, but at greater risk...I am enjoying this period of slow growth....relatively low gas prices, low grocery prices, low heating prices...compare that to a over-heated economy, inflation, higher-gas and heating/cooling prices.....if you have a safe job you don't know how good you really have it right now because you've fallen for the eventual downturn just around the next corner...

  5. #5
    Frumious Bandersnatch RandomGuy's Avatar
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    It seems you concur with this gentleman's hypothesis.

    Is this correct?

  6. #6
    Frumious Bandersnatch RandomGuy's Avatar
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    Yawn... More "predictions"...
    These thread rock.

    Jackwagons like Mr. Lira make solid predictions that they can't take back in 3 years.

    Subscribed to this thread too.

  7. #7
    Frumious Bandersnatch RandomGuy's Avatar
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    Back in late August, I argued that hyperinflation would be triggered by a run on Treasury bonds. I described how such a run might happen, and argued that if Treasuries were no longer considered safe, then commodities would become the store of value.

    Such a run on commodities, I further argued, would inevitably lead to price increases and a rise in the Consumer Price Index, which would initially be interpreted by the Federal Reserve, the Federal government, as well as the commentariat, as a good thing: A sign that “the economy is recovering”, a sign that “normalcy” was returning.

    I argued that—far from being “a sign of recovery”—rising CPI would be the sign that things were about to get ugly.

    I concluded that, like the stagflation of ‘79, inflation would rise to the double digits relatively quickly. However, unlike in 1980, when Paul Volcker raised interest rates severely in order to halt inflation, in today’s weakened macro-economic environment, that remedy is simply not available to Ben Bernanke.

    Therefore, I predicted that inflation would spiral out of control, and turn into hyperinflation of the U.S. dollar.

    A lot of people claimed I was on drugs when I wrote this.

    Now? Not so much.

    In my initial argument, I was sure that there would come a moment when Treasury bond holders would realize that they are the New & Improved Toxic Asset—as everyone knows, there is no way the U.S. Federal government can pay the outstanding debt it has: It’s simply too big.

    So I assumed that, when the market collectively realized this, there would be a panic in Treasuries. This panic, of course, would lead to the e in commodities.

    However, I am no longer certain if there will ever be such a panic in Treasuries. Backstop Benny has been so adroit at propping up Treasuries and keeping their yields low, the Stealth Monetization has been so effective, the TBTF banks’ arbitrage trade between the Fed’s liquidity windows and Treasury bond yields has been so lucrative, and the bond market itself is so aware that Bernanke will do anything to protect and backstop Treasuries, that I no longer think that there will necessarily be such a panic.

    But that doesn’t mean that the second part of my thesis—commodities rising, which will trigger inflation, which will devolve into hyperinflation—will not occur.

    In fact, it is occurring.

    The two key commodities that have been rising as of late are oil and grains, specifically wheat, corn and livestock feed. The BLS report on Producer Price Index of commodities is here.

    Grains as a class have risen over 33% year-over-year. Refined oil products have risen just shy of 13%, with home heating oil rising 18% year-over-year. In other words: Food, gasoline and heating oil have risen by double digits since 2009. And the 2010-‘11 winter in the northern hemisphere is approaching.

    A friend of mine, SB, a commodities trader, pointed out to me that big producers are hedged against rising commodities prices. As he put it to me in a private e-mail, “We sometimes forget that the commodity markets aren’t solely speculative. Most futures contracts are bought by companies who use those commodities in their products, and are thus hedging their costs to produce those products.”

    Very true: But SB also pointed out that, hedged or not, the lag time between agricultural commodities and the markets is about six-to-nine months, on average. So he thought that the rise in grains, which really took off in June–July, would hit the supermarket shelves in January–March.

    He also pointed out that, with higher commodity costs and lower consumption, companies are going to be between the Devil and the deep blue sea. My own take is, if you can’t get more customers, then you’re just gonna have to charge more from the ones you got.

    Coupled to these price increases is the ongoing Currency War: The U.S.—contrary to Secretary Timothy Geithner’s statements—is trying to debase the dollar, so as to make U.S. exports more attractive to foreign consumers. This has created strains with China, Europe and the emerging markets.

    A beggar-thy-neighbor monetary policy works for small countries getting out of a hole of their own making: It doesn’t work for the world’s largest single economy with the world’s reserve currency, in the middle of a Global Depression.

    On the contrary, it creates a backlash; the ongoing tiff over rare-earth minerals with China is just the beginning. This could easily be exacerbated by clumsy politicking, and turn into a full-on trade war.

    What’s so bad with a trade war, you ask? Why nothing, not a thing—if you want to pay through the nose for imported goods. If you enjoy paying 10, 20, 30% more for imported goods—then hey, let’s just stick it to them China-men! They’re still Commies, after all!

    Furthermore, as regards the Federal Reserve policy, the upcoming Quan ative Easing 2, and the actions of its chairman, Ben Bernanke: There is an increasing sense in the financial markets that Backstop Benny and his Lollipop Gang don’t have the foggiest clue about what they’re doing.

    Consider:

    Bruce Krasting just yesterday wrote a very on-the-money précis of the trial balloons the Fed is floating, as regards to QE2: Basically, Bernanke through his WSJ mouthpiece said that the Fed was going to go for a cautious, incrementalist approach, vis-à-vis QE2: “A couple of hundred billion at a time”. You know: “Just the tip—just to see how it feels.”

    But then on the other hand, also just yesterday, Tyler Durden at Zero Hedge had a justifiable freak-out over the NY Fed asking Primary Dealers for their thoughts on the size of QE2. According to Bloomberg, the NY Fed was asking the dealers how big they thought QE2 would be, and how big they thought it ought be: $250 billion? $500 billion? A trillion? A trillion every six months? (Or as Tyler pointed out, $2 trillion for 2011.)

    That’s like asking a bunch of junkies how much smack they want for the upcoming year—half a kilo? A full kilo? Two kilos?

    What the you think the junkies are gonna say?

    Between BK’s clear reading of the tea leaves coming from the Wall Street Journal, and TD’s also very clear reading of the tea leaves by way of Bloomberg, you’re getting a seriously contradictory message: The Fed is going to lightly tap-tap-tap liquidity into the markets—just a little—just a few hundred billion dollars at a time—

    —while at the same time, the Fed is saying to the Primary Dealers, “We’re gonna make you guys happy-happy-happy with a righteously sized QE2!”

    The contradictory messages don’t pacify the financial markets—on the contrary, they make the markets simultaneously contemptuous of Bernanke and the Fed, while very frightened as to what they will ultimately do.

    What happens when the financial markets don’t really know what the central bank is going to do, and suspect that the central bankers themselves aren’t too clear either?

    Guess.

    So to sum up, we have:
    • Rising commodity prices, the effects of which (because of hedging) will be felt most severely in the period January–March of 2011.
    • A beggar-thy-neighbor race-to-the-bottom Currency War, that might well devolve into a Trade War, which would force up prices on imported goods.
    • A Federal Reserve that does not seem to know what it is doing, as regards another round of Quan ative Easing, which is making the financial markets very nervous—nervous about the Fed’s ultimate responsibility, which is safeguarding the U.S. dollar.
    • A U.S. economy that is weak to the point of collapse, where not even 0.25% interest rates are sparking investment and growth—and which therefore prohibits the Fed from raising interest rates, if need be.
    • A U.S. fiscal deficit which is close to 10% of GDP annually, and which is therefore unsustainable—especially considering that the total U.S. fiscal debt is well over 100% of GDP.
    These factors all point to one and the same thing:

    An imminent currency collapse.

    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.

    What the mainstream commentariat will make of all this will be really something: When CPI reaches 5% by the winter of 2011, pundits and economists and the Fed and the Obama administration will all say the same thing: “Happy days are here again! People are spending! The economy is back on track!”

    However, by the late spring, early summer of 2011, people will realize what’s going on—and the Federal Reserve will initially be unwilling to drastically raise interest rates so as to quell inflation.

    Actually, the Fed won’t be able to raise rates, at least not like Volcker did back in 1980: The U.S. economy will be too weak, and the Federal government’s balance sheet will be too distressed, with it’s $1.5 trillion deficit. So at first, the Fed will have to let the rising inflation rate slide, and keep trying hard to explain it away as “a sign of a recovering economy”.

    Once the Fed realizes that the rising CPI is not a sign of a reignited economy, but rather a sign of the collapsing dollar, they will pursue a puerile “inflation fighting” scheme of incremental interest rate hikes—much like G. William Miller, the Chairman of the Fed from January of ‘78 to August of ‘79, pursued so unsuccessfully.

    2012 will be the bad year: I predict that hyperinflation’s tipping point will be no later than the first quarter of 2012. From there, it will accelerate. By the end of 2012, I would not be surprised if the CPI for the year averaged 30%.

    By that point, the rest of the economy—unemployment, GDP, all the rest of it—will be in the toilet. By that point, the rest of the economy will no longer matter: The collapsing dollar will make 2012 the really really bad year of our Global Depression—which is actually kind of funny.

    It’s funny because, as you know, I am a conservative Catholic: I of course put absolutely no stock in the ridiculous notion that “The Mayans predicted our civilization’s collapse in 2012!”—that’s all rubbish, as far as I’m concerned.

    It’s just one of those cosmic jokes that 2012 will turn out to be the year the dollar collapses, and the larger world economies go down the tubes.

    As cosmic jokes go, all I’ve got to say is this:

    Good one, God.

    Also an interesting bit on the mechanics:
    http://gonzalolira.blogspot.com/2010...ll-happen.html

    Some moron like Palin or Biden might well advocate this idea of helter-skelter money-printing so as to “help all hard-working Americans”. And if they carried it out, this would bring us American-made images of people using bundles of dollars to feed their chimneys. I actually don’t think that politicians are so stupid as to actually start printing money to “fight rising prices”—but hey, when it comes to stupidity, you never know how far they can go.
    The thing to do to prepare for hyperinflation would be to invest in a diversified hard-metal basket before the event—no equities, no ETF’s, no derivatives. If and when hyperinflation happens, and things get bad (and I mean really bad), take that hard-metal basket and—right in the teeth of the crisis—buy residential property, as well as equities in long-lasting industries; mining, pharma and chemicals especially, but no value-added companies, like tech, aerospace or industrials. The reason is, at the peak of hyperinflation, the most valuable assets will be dirt-cheap—especially equities—especially real estate.
    Honestly, the guy constructs a disturbingly plausible scenario.

    It will be interesting to see if he is right. I will guess that we will start seeing gold start edging higher as this idea/scenario gets a bit more "out there" into the collective brain.

    Hyper-inflation would kill most existing debt, one way or another. It would be a boon to local governments though. The amount of dollars of taxes would go up, making debt levels really easy to meet.

  8. #8
    Frumious Bandersnatch RandomGuy's Avatar
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    One thing to bear in mind would be that the Chinese have seriously pegged their currency to that of the US, and would act strongly to keep the value of their assets debased. Wonder how that would play out.

  9. #9
    Veteran scott's Avatar
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    Are we talking about REAL hyperinflation (> 50% inflation per month) or some definition invented by non-economists to sell subscriptions to their investment newsletters?

  10. #10
    Believe. Parker2112's Avatar
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    These thread rock.

    Jackwagons like Mr. Lira make solid predictions that they can't take back in 3 years.

    Subscribed to this thread too.
    So Mr. Lira is a jackwagon because his economic predictions don't agree with your economic predictions?

    What a prick.

  11. #11
    Frumious Bandersnatch RandomGuy's Avatar
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    Are we talking about REAL hyperinflation (> 50% inflation per month) or some definition invented by non-economists to sell subscriptions to their investment newsletters?
    Good question.

    Here is a thread I did on one guy who thinks pretty much the opposite.
    http://www.spurstalk.com/forums/showthread.php?t=156597

    That guy of course has his own little newsletter that tells you how to avoid THAT.

    Don't ask Parker2112 to define hyper-inflation, he is just passing it along. It is something that interests him.

  12. #12
    Frumious Bandersnatch RandomGuy's Avatar
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    So Mr. Lira is a jackwagon because his economic predictions don't agree with your economic predictions?

    What a prick.
    Nah, he's a jackwagon because he is making solid, time-specific predictions of economic cataclysms.

    (shrugs)

    Guy could be right, but such predictions tend to have bad track-records. We'll get to find out.

    If it turns out not to happen, what will you think about that? You seem to be invested in this theory.

  13. #13
    Believe. Parker2112's Avatar
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    Invested in the predicted results, or invested in disclosure of a runaway currency system?

    And I would prefer to be wrong. But the time for blind faith in th Fed, without seeing the books even...that time is over. Though you seem to be invested in the status quo, and staying in the dark.

    "Egh, we would have to replace the Fed with something, so why not keep it?" as I remember...

    That single statement summed up your knowledge on the topic and your blind loyalty to the same corruption that is pillaging the lower and middle class in everything they own.

  14. #14
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    Nah, he's a jackwagon because he is making solid, time-specific predictions of economic cataclysms.

    (shrugs)

    Guy could be right, but such predictions tend to have bad track-records. We'll get to find out.

    If it turns out not to happen, what will you think about that? You seem to be invested in this theory.
    he'll do the same thing liberals do when you point out the stimulus didn't help the economy.

  15. #15
    Frumious Bandersnatch RandomGuy's Avatar
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    blind faith in th Fed, without seeing the books even...that time is over. Though you seem to be invested in the status quo, and staying in the dark.
    Each week, the Federal Reserve publishes its balance sheet, typically on Thursday afternoon around 4:30 p.m. The balance sheet is included in the Federal Reserve's H.4.1 statistical release, "Factors Affecting Reserve Balances of Depository Ins utions and Condition Statement of Federal Reserve Banks," available on this website. The various tables in the statistical release are described below, an explanation of the important elements in each table is given, and a link to each table in the current release is provided.
    http://www.federalreserve.gov/moneta...lancesheet.htm

    One can find out enough to be fairly knowledgeable about what the Fed is doing, if one tries.

  16. #16
    Frumious Bandersnatch RandomGuy's Avatar
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    If [hyperinflation that crosses the "tipping point of 15%" in 2012]turns out not to happen, what will you think about that? You seem to be invested in this theory.

    Invested in the predicted results, or invested in disclosure of a runaway currency system?

    And I would prefer to be wrong.
    Invested in the prediction of "hyperinflation". This is the second or third thread you have started on the topic.

    You theory of a "runaway currency system" pretty much seems to predict such hyperinflation, to my understanding.

    If such hyperinflation fails to materialize, what then?

    What will you make of the "runaway currency system" theory?

    Will you rationalize the non-happening of hyper-inflation or discard the "runaway currency system" theory?

  17. #17
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    I just got 3.1% on my car loan.

    not bothering me much.

  18. #18
    I play pretty, no? TeyshaBlue's Avatar
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    I just got 3.1% on my car loan.

    not bothering me much.
    Score!!!!

  19. #19
    NostraSpurMus phxspurfan's Avatar
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    I just got 3.1% on my car loan.

    not bothering me much.
    Did they charge you big fees to refinance? Or did you just purchase the car?

  20. #20
    Frumious Bandersnatch RandomGuy's Avatar
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    3 month bump.

    By March of 2011, once higher commodity prices reach the marketplace, monthly CPI will be at an annualized rate of not less than 5%.
    3 months to go.

    December CPI for all goods was at a rate of 6% annually, if my reading is correct.
    .5% for December, driven strongly by energy increases.
    http://www.bls.gov/news.release/cpi.nr0.htm

    So far so good for his prediction, although the previous two months were much lower rates.

    We will get to see if the rises will be sustained.

  21. #21
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    "Hyper-inflation would kill most existing debt, one way or another."

    worked for USA after WWII

  22. #22
    Frumious Bandersnatch RandomGuy's Avatar
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    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.
    two month to go.

    Commodity prices have been on the upswing, but corporations have been shedding a lot of costs, and have the ability to absorb higher commodity prices withou passing that on in the form of greater prices.

    I guess we will find out.

  23. #23
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    demand-pull when consumer demand is depressed and effective unemployment at 20%+ ?

    capacity restriction price-push? The UCA, for what it still manufactures, has plenty of capacity, and so does China, although China has raised interest rates to attack its inflation.

    yes, we will find out. hyper-inflation scare-mongering is right up with with deficit scare-mongering as VRWC bull .

  24. #24
    Frumious Bandersnatch RandomGuy's Avatar
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    demand-pull when consumer demand is depressed and effective unemployment at 20%+ ?

    capacity restriction price-push? The UCA, for what it still manufactures, has plenty of capacity, and so does China, although China has raised interest rates to attack its inflation.

    yes, we will find out. hyper-inflation scare-mongering is right up with with deficit scare-mongering as VRWC bull .
    There are some signs that China is bumping up against its available labor supply, oddly enough.

    Its massive demand for raw materials of all sorts has also started to run up against global capacity for those raw materials.

    Good time to be a mining company.

    As for the scaremongering, I am VERY tempted to be right there with my own "me too" newsletter for $500 a pop cashing in on all the suckers who are the target Fox "news" audience. Easy money.

  25. #25
    Homer 2centsworth's Avatar
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    One thing to bear in mind would be that the Chinese have seriously pegged their currency to that of the US, and would act strongly to keep the value of their assets debased. Wonder how that would play out.
    Chinese are struggling mightily with their own inflation problems. Highly improbably they could debase the Yuan any further. In fact, most experts expect them to float their currency to battle inflationary pressure.

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