STOP. READ: Unavoidable Hyperinflation

No cute pictures, today. The graphs below do not relate to immediate text and are from Shadowstats.com.  This entry is an essential read.  Skip it at your peril. This is the ultimate word to the wise. 

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Not long ago, I heard the term "normalcy bias" which is used to describe why people  (a vast majority) don't prepare or don't react intelligently. They refuse to expect their happy, normal life can be different. They merely keep busy like mice in a wheel.   People run to the entrance of a building in a fire rather than to the EXIT door next to them.  They don't think; they die. 

If you do not come to grip with what is about to happen, you risk the welfare of your family and yourself.  I am not talking about some more economic troubles where we can gripe as we eat a steak. So far, Main Street hasn't seen anything. We are in a tempest and the government is raising the sails; there isn't even time to replace the Keystone Politicians. 

The point of this blog has always been to look at the message, not the messenger. I know precious few of us don't do that as I am readily dismissed, even by friends, who, at the same time, will tell you I am usually right, they just don't want to hear what I have to say.

So, if you have to use this messenger system of analysis, instead of thinking for yourself, then consider I often report unusual facts that tend to be based on real data.  I attempt to bring information from real sources, though I like to annoy people with inflammatory stuff so don't hold that against me. Below, I am bringing you severe and clear economic analysis from John Williams.

Take note of events and real data.  Please descend from illusion, your normalcy mindset, and from believing what you hear on TV.  Statistically, you voted for Obama - can you say why? Can you say why you didn't see a useful idiot surrounded by Marxist revolutionaries? Remember how clear you were when you voted. You wanted a black guy and change. Does that make sense, now?

We are not in normal times. Those who fail to plan will suffer - you are the ultimate mark.  Those who prepare will survive. Those who invest outside the norm, will do very well.

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John Williams, aka Walter J. (not E.) Williams, runs the Shadow Government Statistics site where he attempts to assemble useful numbers. I have used the site often; indeed, in the last entries I used his M3 graph. Essentially, he finds government statistics a lie. Even the outfit that calls recessions has abandoned following governmental numbers.

Usually, the lie is by a redefinition of terms to meet political needs, such a need to reduce Social Security payments by altering the basis. To understand this, look at the CPI graph above.  The CPI definition has been changed so there is no longer an apples to apples contract. The 1980's definition tells us there is a 6% inflation (which is not the true meaning  of "inflation") in prices. 

The government said there was no inflation, so there was no increase in Social Security payments in 2010.  This lie stole money from us and it is only the beginning. The gangsters control the game.

If you click on the title, the long, Williams' updated analysis of our economic condition will be found.  I post a small section below. If you click on the "statistics a lie" you will find an interview where Williams explains the how the lying liars lie.  

Essentially, Williams forecasts, without reservation, hyperinflation.  He suggests interruption in the food supply and an inability for banks to keep up, which is a double hit on those who stayed in the dollar.

For those living in the United States, long-range strategies should look to assure safety and survival, which from a financial standpoint means preserving wealth and assets. Also directly impacted, of course, are those holding or dependent upon U.S. dollars or dollar-denominated assets, and those living in "dollarized" countries.

• Get out of the dollar and anything denominated in the dollar. 
• Use foreign accounts and stocks 
• Take any fixed percentage loan you can get
• If you can't bring yourself to jump out of 401 (k)s etc., then invest serious money against the U.S. dollar to protect yourself. (Look into ETFs)
• Stash food in he basement
• Don't rely on you bank or ATM. 
• Junk silver
• TIPS are only something to do, they rely on government CPI stats so inflation will not be properly affected. This is a weak move. 

In his radio interview, Williams says we are at a time when you must think of MAINTAINING your wealth, not investing for profit.  

We are at a crossroad that few still living in the U.S. could even understand. In the hyperinflation of the Weimar, Germany,  you negotiated your meal price before eating, to make sure the price was locked in. It could jump by meal's end.

You are perfectly within your rights to 

assume the government, that is Goldman Sachs, has figured out how to run the Keynes Ponzi scheme without a mathematical end. If you believe that, don't prepare at all.  Perhaps, this is social Darwinism at its most profound. 

If you think juggling chain saws is not a good career more, read on. Study. Do something this week.

...Hyperinflation Nears. Before the systemic solvency crisis began to unfold in 2007, the U.S. government already had condemned the U.S. dollar to a hyperinflationary grave by taking on debt and obligations that never could be covered through raising taxes and/or by severely slashing government spending that had become politically untouchable. The U.S. economy also already had entered a severe structural downturn, which helped to trigger the systemic solvency crisis. 

The intensifying economic and solvency crises, and the responses to both by the U.S. government and the Federal Reserve in the last two years, have exacerbated the government’s solvency issues and moved forward my timing estimation for the hyperinflation to the next five years, from the 2010 to 2018 timing range estimated in the prior report. The U.S. government and Federal Reserve already have committed the system to this course through the easy politics of a bottomless pocketbook, the servicing of big-moneyed special interests, gross mismanagement, and a deliberate and ongoing effort to debase the U.S. currency. Accordingly, risks are particularly high of the hyperinflation crisis breaking within the next year.  

Numerous foreign governments have offered unusually blunt criticism of U.S. fiscal and Federal Reserve policies in the last year. Both private and official demand for U.S. Treasuries increasingly is unenthusiastic. Looming with uncertain timing is a panicked dollar dumping and dumping of dollar-denominated paper assets. Such is the most likely event to trigger the onset of hyperinflation in the year ahead. 

The U.S. has no way of avoiding a financial Armageddon. Bankrupt sovereign states most commonly use the currency printing press as a solution to not having enough money to cover obligations. The alternative would be for the U.S. to renege on its existing debt and obligations, a solution for modern sovereign states rarely seen outside of governments overthrown in revolution, and a solution with no happier ending than simply printing the needed money. With the creation of massive amounts of new fiat dollars (not backed by gold or silver) will come the eventual destruction of the value of the U.S. dollar and related dollar-denominated paper assets.

What lies ahead will be extremely difficult, painful and unhappy times for many in the United States. The functioning and adaptation of the U.S. economy and financial markets to a hyperinflation likely would be particularly disruptive. Trouble could range from turmoil in the food distribution chain to electronic cash and credit systems unable to handle rapidly changing circumstances. The situation quickly would devolve from a deepening depression, to an intensifying hyperinflationary great depression.

While the economic difficulties would have global impact, the initial hyperinflation should be largely a U.S. problem, albeit with major implications for the global currency system. For those living in the United States, long-range strategies should look to assure safety and survival, which from a financial standpoint means preserving wealth and assets. Also directly impacted, of course, are those holding or dependent upon U.S. dollars or dollar-denominated assets, and those living in "dollarized" countries.

The balance of this special report is broken into the following sections:

• Defining the Components of a Hyperinflationary Great Depression

• Two Examples of Hyperinflation

• Current Economic and Inflation Conditions in the United States

• Historical U.S. Inflation: Why Hyperinflation Instead of Deflation

• U.S. Government Cannot Cover Existing Obligations

• Hyperinflationary Great Depression

• Closing Comments