Early Stages of Hyperinflation Next Year-John Williams
By Greg Hunter’s USAWatchdog.com
Economist John Williams says the U.S. budget and debt ceiling circus is not the real problem. Williams contends, “The issue here, very simply, is the long term solvency of the United States of America. . . This gap based deficit is going to kill us . . . We are going to be in very serious trouble in this next year, and the global markets know this is happening.” Williams goes on to explain, “They are not going to address the long term solvency problems of the United States. That’s going to trigger a massive decline in the dollar in the not-too-distant future, and that, in turn, will give us the early stages of hyperinflation in this next year.” Williams says, “We’re basically at a point where we can’t kick the can down the road. This is it. . . . Going forward from here, you’re going to generally see a weaker dollar, and it will get much weaker. You’re going to have a dollar panic, but I can’t give you the exact timing on that.” Another potential problem is a credit downgrade of U.S. debt. Williams says, “If we get a downgrade here, that would accelerate the process of the dollar selling and moving us again into the early stages of hyperinflation.” Williams says you can protect your wealth by holding hard assets. Williams goes on to say, “If your assets are denominated in dollars and Treasury bonds, those will become worthless in hyperinflation.” Join Greg Hunter as he goes One-on-One with John Williams of Shadowstats.com.
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About the Author
Greg Hunter
Greg is the producer and creator of USAWatchdog.com. The site’s slogan is “analyzing the news to give you a clear picture of what’s really going on.” The site will keep an eye on the government, your financial interests and cut through the media spin. USAWatchdog.com is neither Democrat nor Republican, Liberal or Conservative. Before creating and producing the site, Greg spent nearly 9 years as a network and investigative correspondent. He worked for ABC News and Good Morning America for nearly 6 years. Most recently, Greg worked for CNN for shows such as Paula Zahn Now, American Morning and various CNN business shows.
Great stuff Greg,— thanks for your hard work on getting Williams back in his sage’s chair.
— What we’ve been waiting for, all right – the truly DEFINITIVE STATEMENT on this time of American idiocy, and the failure of any form of political EXTREMISM.
It was your interviews, along with Max Keiser, that have always given many of us faith in gold, and gold mining stocks, and the power of determination to keep with the grand plan of preservation with the knowledge of this imminent financial catastrophe.
Thank you Justin King for your comment and support!
Greg
thanks again greg, very informative.
Greg, according to simple logic, QE printing of dollars argues that Hyper-inflation is headed for the US Economy. I want to inform you that I believe once rapid and fast rising prices appears on the scene, the US Economy will simply not make it into a Hyper-Inflation scenario. It will begin to shutdown long before Any full-blown Hyper-Inflation State. Under the influence of fast rising prices, sections and pieces of the Economy will start turning off, like blown fuses that shut down sections of a circuit board due to voltage spikes.
Let’s see now, empty store shelves, loooonnnngggg gas lines; w/ gold in hand.
Vs.
20 vacuum packed barrels of wheat, rice, beans oatmeal etc
10 freezers full. Bacon, butter, roasts, H B , etc
10 chickens
Re locateed in country near lakes, rivers, game reserve
Hmmmmmmnnnnnn
No brainer
Finger on the pulse. usa wd
It is a no-brainer if and only if you have a brain.
Allen Ols warns, “Let’s see now, empty store shelves, loooonnnngggg gas lines; w/ gold in hand.”
Okay, okay. We get it. You think people who are diverting some cash to gold are stupid zombies who haven’t the brains to think of the scenario you described. But hey, your plan has some risk, too. I mean, I hope for your sake that the power company will take a chicken for the bill those ten freezers will rack up (if there IS any power). I’m stocking up on charcoal. Maybe we can work out a deal when that day comes. Seriously though, some of us think there may be a “other side” into which we might emerge from the calamity. If so, it might be nice to possess something hard and valuable (whatever it is) with which to start again. But if I’m wrong about that, then we’ll all just come and take your chickens (our gold is well hidden).
Aurthur
I will sell u eggs, and I have 3 generaters, several inverters sien wave type, 3 yrs gas storage,soon rabbits, boat, w/fishfinder and much more. I will sell u fish/deer meat, chiken meat and all veggies u can handle.
5 rocket mass cookers/needs no elect
Wood heat– bring your gold I will bake the bread dutch oven style/maybe some cobblers as well
Just bring gold. 🙂
Al ols
Al,
One of the most basic laws of survival is to play things close to your vest. You keep expounding on what wonderful preparations you have made and I admit I am a tad bit envious, but brother, you have painted a big bullseye on your back. You might have it in four locations but if you and/or your comrades have families and the wicked gov’t guys or even a bunch of city gagsta types start shooting them one by one, how long are you going to be able to hold out.
Or say that the Nat Guard pulls up in humvees and Bradleys and open up on your fortifications with Maw deuce and 23mm…I won’t fare any better against the guard myself…only strategies I have is flee with limited essentials and hide…let’s hope we both
see them coming because I believe the Guard and PoLICE will turn feral. After all, they will
have everyone but the Military outgunned.
My point is you might want to stop painting yourself with the laser designator and just give advice on how to protect yourself and love ones.
You r dreaming g 500, hum vees. Mac 10s opening up not even knowing where stuff is,
How about I lie and say I was provoking conversation
The military will lock down inner city chaos, stopping hoards heading to country, forfood
People in rural 10-20 miles out effected first, us 40-50 miles out will have head start, of. 4 weeks or so;
I only need 3 days head start, and w/my ear to ground at USA WDog We will see it coming afar off.
I get my new 4 wheeler in 3 weeks, will add 5- more 55 gal barrels gas.
You see I started 8 yrs ago listening to bob chapman, celente, rogers, more; and started preps
G 500 you r over exaggerating and I am much brighter than the national guard, police, or in my location
3 barney fife. Sherrifs, one 400 lbs
Alols
I’ll take your word for it as it seems good.
Impeachment and death penalty is my vote. Not just the president but all of the A$$holes in congress and senate they too should face justice. Except for the few who stood stead fast to try and save us from ourselves.
Hope you guys are prepared and God save us all
Thomas Jefferson said that the people should rise up and kill all of the politicians every one hundred years. An interesting sentiment and one that I could subscribe to except that I am an elected politician…. A most interesting quandary.
Amen Angel. Even the Pres swore an oath to protect America against all enemies, both domestic and foreign.These guys should name tthemselves as enemy combatants and self hood themselves for easy pick up. Let’s start with McCain and Obama and follow the poop trail from there.
Hey Greg
Here’s another alert!
http://europe.chinadaily.com.cn/business/2013-10/14/content_17029829.htm
Always tryin 2 keep ya ya update
Thanks Dave
Dave, thanks for the link to a new News source. The Chinese perspective is insightful
Paul Volker, where are you? S.O.R. S.O.R. “SAVE OUR REPUBLIC”
DearGreg,
Great interview but I’m confused. Greg Mannarino says hyper-inflation. John Williams says hyper-inflation.
Armstrong Economics says hyper-DEflation. Prof. Fekete says hyper DEflation.
What’s it to be? Any chance of getting on someone who thinks it will be Hyper-Deflation?
George,
I am working on Professor Fekete. Stay tuned.
Greg
Greg, deflation has also crossed my mind. Take a look at Amman’s post above, a scenario like that would keep the elite who have dollars very wealthy. With an old fashion Great Great Depression in place it would allow our ever power hungry government to impose a police state for absolute power on the ruse to curtail the hungry unemployed bellies; a “let them eat cake” type America.
Deflation is not likely, in my opinion, as we don’t manufacturer anything like we did in the Great depression. I’ll change my mind if you can advise a few things that will allow the U$D to retain its value in relation to our foreign trading partners’ currency. I can not think of anything.
If it was not for the drug trade and oil, our dollar would be in steep decline.
Yes, we are currently the reserve currency of the world but as you know from reading Greg’s site, the real world players that have manufacturing economies are flushing U$Ds as fast as possible while attempting to maximize their potential recovery.
When I say that deflation is not likely, I am talking about things you need for life. Food, gas, electricity…Even cars but houses and stocks, bills…Will drop, deflate
It will depend on which country that you are RESIDING that will determine inflation OR deflation.
Justin, hit the nail, in the, proverbial, coffin! During the 1930’s, in the US., it was deflation, inflation in Nazi, Germany. Then W.W.2! Stagflation any one? Now, W.W.Z?
There’s no business, like war business, like no business, I Know!
Stop the music! There is good news! Google
(Great Day- Bing Crosby- youtube) Blast from the past, hope fer yer future! You’ll be glad ya did!
We will get both price increases and price decreases as a result of the imbalances. The things you need to live on will hyper-increase. Everything else will hyper-decrease. Food, water, fuel, heat and energy, medicine, etc. all those will hyper-inflate. Motor homes, boats, big cars, wide screen TVs, those will all deflate. What do you think happens to the value of McMansions during this crisis? Example: If currently, 25% of wages supply food and, 30% covers housing and driving, 10% covers incidentals/entertainment and 35% covers tax burdens, what happens to all those percentages when food goes to 50%? 60-70%? People gonna eat first, they have to. And thats not accounting for healthcare.
Don’t worry about healthcare! Didn’t you get the memo, it’s free. Obama is going to go to the subsidy tree to cover the cost. NO Worries.
I am betting that we will see a hyper-inflation scenario quickly followed by hyper-deflation. What happens after that will be irrelevant because the survivors will be keeping to themselves…
It’ll be both in different assets but I believe the order of the day will be hyperinflation first as they continue to pump money into the system as that burns itself out massive deflation to correct 100 yrs of inflation. Hold hard assets as metals do well in either scenario, check out John Exters inverse pyramid, assets don’t deflate, they evaporate.
It’s quite simple, really. You’ll have both inflation and deflation. Inflation in the prices of everything you need and deflation of the prices of everything you own. 🙂
It will be a long hot Summer of Deflation but you will have a few rainy Hyper-storms.
Well there is an inflation in stock markets and deflation everywhere else.
So you may have booth soon.
So 911,please explain what will allow the USD to retain its value. Have you looked at the trade deficit lately? Deflation is caused by a significant decrease of available monies to spend. This happened with most people’s credit cards in the last crash. The dollars will chase foreign assets in increasing numbers as the dollar’s weakness will increase toward implosion. With the Fed printing till Doom’s day to cover the failing bonds. To me, it looks like hyper inflation, as businesses will have to increase wages to cover at least part of the inflation ; you can’t pay a worker min wage ($8) when it takes $40 in gas to get there and a gallon of milk is $18.
Wait, I see a way out! We are saved! Obama will ask the Federal Reserve to loan everyone a billion in TBills per month which they can sell for €100 and buy their monthly needs.
The following is a satirical parody …. (Ignore this public service message if you are easily offended by the current state of affairs).
“Mr. Speaker … I yield 5 minutes to my colleague from the great state of Texas …..”
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
“Aight ….. Now ……. We have before us this thing called a CR”
“That’s a Continuing Resolution for those of yall that dont know, but most of yall in this chamber do know.”
“Now …. I want yall to know that if we wanted to ….. and yall all know this ….. that we could open back up the government and end the shut down if we wanted to ….. right now.”
“We could do it with a simple thing called a martial law.”
“Now every body in this chamber know what a martial law is.”
“We in the house !! …. and martial law says we all stay in the house.”
“Just want yall to know that we can do it … and aint none a yall gonna stop us.”
“Does yall understand what I am sayin’.”
“We needs to do this ….. for the people.”
“By the way, I would like to give my respect to and thank the Xerox programmers that assisted us over the weekend to bring the goods home to all my peoples in Louisiana and other places.”
“Word up to Wallmart for bringin home the bacon and a few other items to my peoples …. and my condolences to the shelf stockers that had to clean up what was left behind.”
“There were places where there was no shutdown.”
“Yo ! …. Put yo hands in the air …. Represent.”
“Peoples is hurtin’ and they needs all us in here to bring government to the people.”
“All right yall.”
“Now thats all I gots to say about that.”
“Now lets keep hope alive.”
“Obama in the house … and Obamacare on its way to a healthcare exchange server near you … at least we hope so.”
“Say a prayer or two for my white sister Miss Kathleen Sebelius.”
“We dont like very many white people, but Barack is down with you.”
“You alright for a white person.”
WOOT! WOOT!
Hahaha…hehehe…Hahaha
That is funny
Yet another outstanding interview. Greg I have to tell you. Week after week, we hear these economic analyst you bring on tell us that this economic debt crisis cannot be sustained much longer. If I were President I couldn’t sleep at night, and I sure in the heck wouldn’t be playing with our credit rating over a budget debate. When you think of it in those terms, you have to come to one of two conclusions about this administration.
1. Either they flat don’t care about the repercussions of debt and
hyperinflation.
2. Or they are making a plans for something else as we approach a
crash.
There is possibly a third which is outright ignorance, which I don’t buy.
I agree with Mr. Williams about the acquisition of hard assets. I personally have sold several of my classic cars to pay of my home and other debts I had. It was tough to let go of something I enjoyed so much, but at the end of the day I chose financial freedom over debt.
Self reliance is the key. You have to think, what will I do if I don’t have a check coming in tomorrow? What do I need to have to make it? Having shelter, food, water, and protection are at the top of the list. At my house we even cut the power off from time to time as a test run to see how we adjust. It surprising how dependent we are on electricity. Not having it poses a lot of problems. I could write a book. I would encourage others who visit your site to do the same thing. Don’t wait until you have to, to test your supplies. You won’t like it.
Thanks again Greg. Keep up the great work. I’ll ring that bell again soon.
Thank you Jerry for your comment and perspective.
Greg
Jerry wrote:
1. Either they flat don’t care about the repercussions of debt and
hyperinflation.
2. Or they are making a plans for something else as we approach a
crash.
Why not both?
Jerry,
Another choice is they know what is coming…but can’t stop it….and are trying desperately to slow it down
Ominous, sums this up. Obamacare just piled on. Someone please tell me how the collapse of the worlds greatest superpower was NOT done on PURPOSE? This has all the hallmarks of Cloward and Piven, you collapse the system from within. Then the govt grabs more power and control.
Williams added, “The crisis is coming and these guys in Washington know it, and they are not addressing it.”
Reaffirms my point that this takedown of the US may in fact have been done on purpose. If we would have had term limits for every elected official instead of career politicians maybe this could have all been avoided.
It was all planned out at the 1992 Rio earth summit. The next year NAFTA and GATT was passed to start the process. One of the richest man in the world, David Rockefeller, has made many quotes how he and other elites are taking down the united states.
Greg…This event will be the Trigger Point that pops the Chinese Housing Bubble. US Treasuries are held as reserves in China’s Central Bank. A loss in US Treasuries will create a state of Insolvency in EVERY SINGLE BANK in the World.
This will truly be a Global Event.
We DEFAULTED before on April 26, 1979.
Read this…http://seekingalpha.com/article/271928-the-day-the-united-states-defaulted-on-treasury-bills
Gold, as a RESULT, DOUBLED IN PRICE, by December, 1979-January, 1980.
This Game is Over. In fact there will be no “Volcker Miracle” because if Interest Rates are allowed to float then the US Government becomes INSOLVENT and fails.
With Jim Willie’s assessment that the Interest Rate Swaps in the Derivative Market has broke and that Bubble is popped, we are cooked.
God Bless and keep continue to expose the Truth.
This is very sad.
I find it amazing that most people think we can continue to print, or create money out of thin air. And do it forever without any consequences.
“If your assets are denominated in dollars and Treasury bonds, those will become worthless in hyperinflation.” ARE YOU LISTENING WARREN BUFFET
Greg: You have to know by now that Congress is bought and paid for. This financial crisis(collapse) coming is a planned event by the elite’s(bankster). Mr. Williams is correct – this is coming soon, but no one will talk about it”is a planned event”. Both sides of Congress know this is comng- they won’t stop it- they’re paid to vote as they are told. This is — Obama, the Cloward-Piven Strategy, and the New World Order. Google this and you’ll understand. All this back and forth is Congress is a show- a worthless event of time waste. In 2007, I believe it was- Congress behind closed doors was told the USA would in the future default on the national debt– this is coming. BE PREPARED.
AL
Al, (Con)gre$$, bought and paid fer? “Mitch Mc(Con)nell, accused of sneaking in, 2 billion, “Kentucky kickback”, in budget, dept limit deal-Say it isn’t so! Google it, you’ll be glad you didn’t.
I sure hope this interview finds it’s way into everyones mailbox. When Mr’ John Williams speaks, I get my ears very close to the laptop speaker. Folks should take a little time and read what happened to Germany during their hyperinflation of the 1920s. [1923 to be exact] People would drop dead on the street from starvation. I have photo’s of people looking down through 3 feet of ice covered sidewalks and seeing bodies. This is no joke, and nobody cared about it either. They just cared about staying alive one more day. Americans are going to soil their underware when hyperinflation hits them. Now people are more insensitive to the plight of their fellow man. Nobody cares about our neighbor as our parents and grandparents once did. Lawlessness will be the norm in this type of inflation. A godless society where right is wrong and wrong becomes right. “Every mans hand against his neighbor” Isaiah 3:5 This is why I have always contended that humans are incapable of self rule. Look at Fukushima Japan———-
Stock food out in country location, get a small camper
Hi Greg….This is a great forum, and I enjoy it very much. John Williams is one of the best, along with Dr. Jim Willie. Inflation is too much money chasing too few goods. What’s the price of a loaf of bread if there isn’t any, and you have ten thousand U. S. dollars?? Folks, the U. S. has no gold in Fort Knox or anywhere else. If we did we could certainly have given Germany back here measely 313 tons, when they asked for it, right? Clinton, Rubin and Summers leased it all or sold it, just like Gordon Brown did to England. The dollar will head much lower, U. S. Treasuries will be sold as will stocks. Thanks. Jimmy
Buy food now, don’t put it off any longer
The interview with John Williams was very interesting. I wonder how Mr Williams views how US hyperinflation will affect other currencies and countries. Will Canada, Europe etc experience hyperinflation as well? Many countries do a lot of trade with the US (oil, cars, clothing, raw materials), so I imagine hyperinflation would disrupt international trade, and thus the prosperity of other countries. More to the point almost all other countries also have enormous levels of debt, so is it just a matter of time that they follow suit?
In short, would hyperinflation of the US dollar trigger a worldwide depression? Will there be islands of prosperity?
David Edwards,
It seems that given massive Debt, Derivatives, and Interest Rate Swaps are completely throughout the Western world finances – a crippling of at least half the world will occur. The other half will condense into tighter circuits of trade. Worldwide Depression may be a mild way to describe it, because social unrest and raw crime will decimate populations. Those who are atheists will view such upheaval as justification to their “survival of the fittest” theories: but the truth is bodies perform work, and produce value in product or service. Sinful man will always endeavor to enslave and profit by merchandizing others; and ‘prosperity’ will be relegated to those who rule. Like Mr. Hunter – I’m a fannerino of Mannarino – and agree with his description of “Biblical proportions”: because it is exactly what it will be – Biblical fulfillment.
Yup
Excellent interview. John noted that the Zimbabwe economy continued to function through their recent hyper inflation due to the use of black market USA dollars. Also, Zimbabwe has a lot of gold production, per capita. And a lot of gold panning is done by squatters. So they actually had two back up currencies, not just one.
Also, John’s point on Bush’s prescription drug benefit for medicare was a good one. They created a massive benefit with no funding at all. They need to get rid of that and ObamaCare. Too much partisan infighting though, to get anything done.
Yeah, just wait until reality finally sinks in here at home, there will be knee jerk violent reactions by a largely totally unprepared public that will eventually simmer down and submit to a much much stronger central authority taking complete control of their lives and thus finding it necessary, due to its lack of both ability and desire to provide for its newly acquired and very much idle “human resources” to then efficiently “liquidate” such soured assets……oh and quietly of course, in secure, tidy little camps with nice clean light grey rooms smartly furnished and even having colorful plastic playground equipment on well kept mulch beds out in front.
Great interview Greg; gotta love Mr. Williams!! Very scary stuff, though, and unfortunately it looks like Mr Williams is correct on all levels. Even the UK is faltering, and this looks like a window into our future… this just out: http://www.theguardian.com/uk-news/2013/oct/11/red-cross-to-distribute-food-to-britains-poor-and-hungry
First time the Red Cross has given aid to them since WWII. Hold your breath – here we go…
Greg, as you have consistently pointed out, the “Great Debt Ceiling Crisis” is a fraud, Kabuki theater designed to confuse math-challenged “low information” members of the U.S. public.
Failing to raise the debt ceiling will not cause the U.S. to default on its debt. All that is necessary to avoid default is to continue to pay interest on the debt (as the government is currently doing) and there is plenty of incoming revenue to make that happen. Default will happen only if Obama decides to default.
The real reason that Washington wants to raise the debt ceiling is that failure to do so will require the government to prioritize its spending—and that is anathema to the professional politicians of both parties whose careers depend upon the continued growth of the Welfare/Warfare State.
The Washington political class now poses an existential threat to the economic survival of the nation, to peace, and to what little remains of American liberty.
Well said, exactly right, failure to raise the debt ceiling was not a default.
Wow, Frank – that just about nails it. Great comment.
While I understand timing is difficult, Mr. Williams has been saying this for several years. Just look at world markets. The finger pointing from China and Russia, for example, seems to have been about keeping the status quo going, and not about changing our ways.
In fact, if either had expressed vehement displeasure over the creation of even more debt capacity (debt ceiling limit increase), the change in focus during the shutdown would’ve been dramatically different. They didn’t do that. Surely they see what we see.
Unless things start to go bad soon, they may never do so. Some even suggest, that as long as China and the others are willing to buy the drinks, we can keep getting drunk without real consequences.
Bottom line: Right or wrong, one can only cry fire for so long before no one takes you seriously. Things better start happening soon.
m
md412,
“Things better start happening soon.” Where have you been? What in the world do you think QE1, QE2, QE3, and QE to infinity have been for? To prop up the system. This is a process not an event. Williams has long forecast that 2014 would be the “beginning of hyperinflation.” Famed investor Jim Rogers says, “This has never global situation has never happened before in recorder history.” What the world faces is a unprecedented debt mess in the hundreds of trillions of dollars. The timing is difficult but the ending is assured. Thank you for your comment.
Greg
Greg, I read that the combined Global debt including derivative exposures, consumer and govt debt around the world is about 1.6 quadrillion dollars. Brother, can you spare a dime?
Suggest you see how small changes in CDS effected Citibank
Greg,
I’ve been here, and have been raising hell about defict-to-debt spending for perhaps longer than you (20+ years). Most all of our present difficulties stem from the effects of what I’ve been calling an “income crisis” since the full effects of decades of outsourcing really struck home with the 2008 foreshock.
I get all of what’s being said, and have been a vocal and vehement critic of the deficit-to-debt cycle, especially of late.
Today’s announcement of a temporary debt ceiling patch is no surprise, and stems from the devil’s advocacy position of my first comment. The ceiling fight failed precisely because too few Americans believe what Mr. Williams, et. al. are saying. They just don’t believe we will collapse that badly. Today’s action actually reinforces that notion too. All along, the belief is, that we simply need to work out differences over spending. It is rarely over not spending anymore than we have, and THAT’S the problem. Until we DO collapse, the numbers aren’t there for real change, and today’s vote proves it. People just want “getting along”, NOT fighting for change.
Just look at the sentiments over Ted Cruze.
That’s not just coming from democrats and a liberal media, although those entities do exist. There from people who are hurting, to be sure, but who want instant fixes, and no more fighting. THIS is why I asked about WHEN this will happen. Loading the gun for collapse with QE, etc., is not the collapse itself.
Until THAT happens, expect little alarm to action. Else, they’d burned out the Capitol Hill phone system these last two weeks demanding an end to credit extensions. That didn’t happen.
As long as we are in the waiting phase, people won’t take this seriously, and they ARE NOT taking it seriously. Trouble is, by the time they do, there won’t be much left to save.
m
If Mr. Williams, Dr. Roberts, or any of the rest can do anything to speed it up already, those of us who want to get on with rebuilding what’s left would greatly appreciate it.
Otherwise, what’s the point?
m
I agree that a high level of alert can only be maintained for so long
“What the world faces is a unprecedented debt mess in the hundreds of trillions of dollars. ” IN THAT CASE, DEFLATION IT IS!
MD 2020,
Even the Titanic didn’t sink instantly. Your remark is non sequitur. If something doesn’t happen soon it never will.
Greg –
It’s been obvious for sometime that the US is in economic trouble. There is no way that it is mathematical possible for it to survive. The reason for this is quite simple – the very foundation of the economy is built on sand. Fractional reserve banking with money created out of thin air spell will spell doom for the US. People are going to be shocked at the pace in which the final stages of the empire unfold. I’d heard a statistic awhile back that blew me away so I created a spreadsheet to verify it:
You have a magic eyedropper and start by putting one drop of water in the middle of the Rose Bowl. One minute later you double that and put in two drops. A minute later, four drops. A minute later eight drops. A minute later sixteen drops. And so on, each minute doubling the amount of drops you put in the Rose Bowl stadium. How long would it take to fill the Rose Bowl? I did a spreadsheet in which I assumed that a drop was 1/1000th of an ounce and did the math. It would take 44 minutes to fill the Rose Bowl. 44 minutes to fill a stadium that can hold 84,375,000 gallons (right from their official website). The first 30 minutes almost nothing happens. Between minute 31 and 38 you begin to see something happen. But the last 6 minutes, really the last 3 the Rose Bowl is filled at a breathtaking rate.
What is my point? The point is this, the economy of the US is beginning to see many indicators go parabolic with a lot of volatility. When the final stages of the dollar start to unravel it will only take a short period of time before it becomes a footnote in history. I’ve been reading Shadowstats for sometime now and John Williams is spot on although his timing hasn’t always been accurate. But who of can predict with 100% accuracy when things will happen? I thought this thing was going to come off the rails a couple of years ago and somehow it has survived. The point is that the damage is already done and the patient is on life support. It’s only a matter of time before the world and the market pulls the plug.
Keep up the good work Greg.
Thank you David and matslinger for adding your voices here!
Greg
All you need to know about the PM market is this:
it’s not the direction of PM that matters…
it’s the destination.
And ownership…that is in hand possession
Why the US will not see hyper-inflation.
How are the United States’ historic budget deficits, money-printing and depressed economy any different from the country’s that have experienced hyper-inflation? The three-part answer is: (1) we don’t have any problems selling our debt; (2) we aren’t actually printing money; and (3) the United States is a highly productive economy that is nothing like bombed-out Budapest.
Let me unpack these one by one. Right now getting the markets to buy our debt isn’t the problem. Getting enough debt for the markets to buy is the problem. Investors are so crazy to load up on Treasuries that they’re actually paying us to borrow, taking inflation into account. But while we’re currently getting free money from investors, Hungary circa 1945 was getting no money. It was an investment pariah. If Hungary wanted to rebuild its economy, its only recourse was the printing press.
Second, the United States isn’t really printing money. At least not like post-war Hungary. Quantitative easing is usually described as “money-printing” but it’s not really. QE involves the Fed buying longer-term bonds from banks. It simply swaps one asset for another — in this case, cash for longer-term bonds. Unlike Hungary, the Fed isn’t directly paying the Treasury’s bills. This is a hugely important distinction.
Whatever money the Fed “prints” is stuck in the banks. That money isn’t inflationary as long as the banks don’t lend it out. What if the banks do start lending at a faster clip? The Fed can still effectively pay the banks not lend by, for example, raising the interest on excess reserves or require the banks to set aside more money. It would be shocking for the Fed not to pursue one of these options.
Third, the most important difference between us and post-war Hungary or Weimar is that our roads haven’t been razed to the ground and half the country isn’t striking. It’s very difficult to have hyperinflation when you still have a functioning economy. Almost all examples of hyperinflation result from huge economic shocks that devastate an economy so much that leaders think printing money is the only solution to growth. As bad as the Great Recession has been, our GDP is already back to and above its all-time pre-recession high. As bad as unemployment is, more than 80 percent of the labor force is working. In Zimbabwe, 80 percent of the population was unemployed,
Written by Matthew O’Brien
Thanks for letting me post…..Robert
Exactly what Matthew said,
Yes, there is QE, QE 1, QE 2, and QE 3, however this is just an exchange from the central banks to banks. The banks get reserves, but those loans aren’t a medium of exchange, just like a house isn’t a medium of exchange. Sure, the house or the reserves can be used to make more money, however reserves just like houses don’t equal money. I’m starting to believe that the U.S. has a much greater chance of a deflationary period then an inflationary period.
Robert,
The claim that we are not having a problem selling our debt is laughable. If you researched the subject, you would be horrified to find that the largest purchaser is the Fed Reserve. And by largest, read that as an order of magnitude or two higher. More than all the other purchases together.
The writer closes by pointing to phoney gov’t statistics showing growth as proof that hyperinflation is impossible. As a forensic accountant, I advise the writer to research and recreate the numbers as Wiliams does. Our GDP is a fiction created by tyrants to mislead otherwise intelligent people.
The game of lavish living and freebies are going, going, gone. It is good advice to step away from too much dollar investments and shift those into ownership, such as home ownership, cash in hand, food, and some PMs.
However, confiscation will be the only plan after hyperinflation. That is because stealing assets will be more valuable than stealing someone’s debt. Assets are worth more than debt.
Goodbye IRAs, 401ks, and any CDs.
I probably don’t understand but I will say it. Someone can enlighten me if they wish. If the dollar gets weaker,what keeps other countries from propping it up,since they stand to lose as well. I have been led to believe thatothers will not dump bonds because it will crush them as well. Again,I don’t know. It all is so confusing. If the rest of the world can survive without the dollar,then why don’t they do it? I’m sure it isn’t because they love us so much. Can someone explain?
@gerald–“If the dollar gets weaker,what keeps other countries from propping it up,since they stand to lose as well”
Can’t answer that one. However, I would frame it like this: there is a finite amount of wealth in the world, but multiple claims on that wealth. One solution would be to grow the pile of wealth. However, this will not be easy, since all the cheap oil has been found and produced, and all the prime farm land is already in production.
Another solution is for countries that issue fiat currencies to create more fiat. This doesn’t produce more wealth, but it gives the issuer the opportunity to purchase more valuable things. That is until the rest of the world sees what’s up and declines to accept that form of payment.
We are in the early stages of this ‘dollar rejection’ process. Countries are negotiating trade deals that cut the dollar out of the equation.
Gerald,
Events usually follow, and signal, the outcomes of Processes. America is in the process of eroding the value of it’s currency, the Dollar. This, as the process of perception in the world outside the USA, becomes more prevalent – those who have viewed the Dollar as ‘the least dirty shirt in the laundry’, will recognize other currencies or assets and begin a process of abandoning the Dollar SLOWLY AS POSSIBLE, in exchange. Think of Musical Chairs – those who fail to compete in this shifting dynamic – will be left without a chair; or almost anything else.
John Williams has always fascinated me. Followed him for a long time, and subscribed for a time to his publications. He’s been calling for hyperinflation for quite some time.
That said, with the amount of debt we have, the on-going property bubble in the US, and the US continuing to export its inflation (trading US dollars for goods), its really hard to see anything but persistent deflationary forces for years to come.
All these other countries desperately need someone to buy their goods. That someone, is the overly consumerist American. Each country is competing to sell us the lowest priced goods. In order to do that, they have to accept our dollars (even as they are debased.)
That’s what helps the US to maintain World Reserve Currency status. There aren’t enough of any other currency for any other country to have its currency become a reserve currency. Everyone else can hoot and holler and complain about the dollar, but frankly that is not going to change unless a significant country like China becomes a net importer, runs a deficit, and major countries like ours buy their products in Yuan. We aren’t likely to do that for a long long time as we have no need to hold Chinese currency as a reserve, and their goods and labor continue to be far cheaper than most things made here.
The US can continue to have jobs, as long as it develops many little niches for specialized goods that a large number of country’s desire to buy. Sure, we may be stuck with higher unemployment for some time to come, until citizens become far more skilled and better educated to get a job in the newer economy (like tech, bio, etc), but other than healthcare, and post high school education, maybe energy, and food, its hard to see how deflationary forces that are secular in nature, won’t overwhelm any tendency for inflation.
And yes, QE will continue far longer than most can imagine, and we may have even more of it than the current $85 billion per month. But as long as all these other countries need us as consumers, and as long as they continue to want to grow themselves from poor agragrian cultures to self sustaining and urban cultures, the US will maintain its reserve currency dominance, and as well essentially have a license to ‘steal’ (aka exchange our debased dollars for others goods/services). It continues to be our advantage until its not, and the not will not happen overnight, so people like John who keep persistently projecting hyperinflation, will likely continue to be wrong unfortunately.
Thats not to suggest that John Williams numbers are wrong about the statistics of our economy. Its just that he seems to be failing to see the over arching effects of the US maintaining Reserve Currency dominance. Our military as well, helps us to maintain that, and ironically in fact our growth in energy production, which people seem to think is a good thing, expecting us to keep our supplies coming, and maybe even be a net exporter of energy like natural gas, could be one of the longer term drivers toward the US not being able to continue to be a net importer, and maintain its deficit spending, which is needed in order to maintain reserve currency status.
Ever wondered why Democrats have been so reluctant to allow domestic energy production to really take off, and to be so against things like shale oil, shale gas, and even coal ? Has nothing to do with the environment, and everything to do with deficit spending. And they want to continue increasing deficit spending, developing more entitlement and welfare programs to ensure they keep getting re-elected. Ironically, thats why you see Republicans actually moving more toward “center” and more toward spending, (not cutting), and our government as a whole has essentially become more centrist than ever. (i.e. little difference between either party, and no incentive whatsoever to start cutting spending, or to not overspending, and continue the deficit, as long as the US maintains reserve currency status).
In fact, USA Watchdog, might want to switch from ‘watching’ and fearing inflation, to monitoring deflation. Deflation is actually a good thing when it comes to goods and services, as long as quality does not deteriorate.
I realize much of the above really turns things upside down for everyone who visits this site,but when you follow the money, and understand how it is we have a reserve currency, what that means, and continue to see (unbelievably) more QE, this essentially explains the behaviors of the FED and congress to continue on their apparently evil and harmful ways.
Greg, if you ever get a chance to have Catherine Austin Fitts on again, I’d bet you could get her to agree to most of the above premise.
People need to really re-think what it is they think they are ‘prepping for’ or ‘fighting’ and figure out a way to get with the ‘program.’ There are going to be high paying jobs for the right people, with the right skills, and rather than perhaps investing so much emotion and effort toward GOTS, (getting out of the system), or things like hyperinflation, perhaps it’d be better to diagnose how to best take advantage of the system we live in. This economy is going to continue to punish the least skilled, least educated, and people still hoping that 20th century jobs will continue for a long time. (i.e things like factory line jobs, or even many labor intensive service jobs.) We can see a resurgence in manufacturing, but it won’t be your fathers jobs coming back. It will be highly skilled jobs, requiring more than just a college education from some liberal arts school, and mostly about math, science, technology, and being able to operate ever faster computer technology, robotics, and logistics. They will be jobs that manage the work equivalent of hundreds if not thousands of foreign cheap laborers, using machines and robotics, and more and more technology. This is inevitable folks. Its called human nature and ‘progress.’ It may seem Darwinian, but you are taking a huge chance, by not figuring out how to live in it and prosper.
I appreciate the time and effort you put into your post and the optimism underlying it. However, it seems that such optimism can only be supported by using such a broad brush as to neglect certain realities….
On the one hand, we have a government that derives its power by bribing the citizenry with their children’s’ money and in so doing has created a welfare state with unfunded liabilities amounting to hundreds of billions of dollars. It criminally transfers (bailout) the current wealth of the poor and middle class to money printers and financial speculators and places taxpayers at risk for covering their future gambling losses in derivative instruments that could easily rise to more than one thousand trillion dollars. It crushes small businesses with reams of rules and regulations while subsidizing the failures of large corporations. It tries to convince the public that debt fosters wealth (quantative easing) while it destroys the value of our currency in the process. It projects its military might on a global scale and is building and arming a police state at home in preparation for…?, and it has proven itself unconcerned and unwilling change its ways.
On the other hand, we have massive job losses accompanied by a declining standard of living. We have countries that have relied on the fiat US dollar maintaining its value and thereby used it as a reserve currency for international transactions who are now having second thoughts. They are actively developing a means to trade through alternative fiat mediums even though dumping the declining dollar will result in huge, but temporary, losses. Now we need our military to reinforce the dollar’s status as a global reserve currency.
But we can survive and prosper in this environment by learning highly skilled jobs in the fields of math, science and other technologies? Well, maybe so. Given that the US government is now the single largest employer in the nation, attracting people with those jobs would certainly enhance its ability to spy on, control and dominate this society as well as to project its military might against the others.
Darwin’s theory on the survival of the fittest should give us pause to consider whether continuing to participate in our own destruction constitutes the best means of survival or whether looking for an alternative route is an even better one.
Frosty, I loved the last part about social Darwinism. Based on the rankings of current American adult’s intelligence compared to our peers, I am not hopeful. We have gotten soft while the third world has stayed hungry and in a lot of categories have passed us…One of the most frightful is education.
Please explain what I am buying on a regular basis that is deflating? Milk, steak, cereal…gasoline? Please enlighten me so I can buy extra to get ahead.
Mike R, great points. I completely agree. With what you said, and with Williams. I am in manufacturing and run swiss machines. Essentially, I’m doing the work, (a quarter million parts every three months) by myself running machines. This use to require dozens of workers. I believe this will provide me with an employment buffer. Because I do believe the bottom will fall out. Inflation, and deflation as has been said. TV s are cheap, food is expensive. This is ALREADY happening. I’m currently attempting to close on a house. I will have a garden, and I will push myself within the system in place using it as long as possible. Retail only sustains due to government subsidizing low income families with cash to buy products from other countries who can use our currency to purchase crude oil from Sadi Arabia. And other goods. But, what happens if these foreign countries cease to use our dollar? Do you believe fast food will continue to be viable for broke unemployed families? That companies with capital in these foreign countries like China won’t be nationalize the factories. I’m not sure what is coming. I don’t know if what we need is food stocked or better education. But I will say this…. Get jobs, build skills aggressively, save what you can and build a support structure.
It’s been said that politics is the art postponing a decision until it is no longer relevant. So what possible event could intervene that would make the last few weeks of Potomac Kabuki theater no longer relevant?
Well before we get into any speculation on that let me just put out what I’d like to see happen. Obama likes to make comparisons between himself and Lincoln. Ok let’s see him really be Lincolnesque. Grow some hair on your balls and tell the banks to go pound sand. Be the Christian you claim to be and turn over the tables of the money changers.
When the Banks told Lincoln that they wanted outrageous interest rates to finance the Civil War he circumvented them and directed the Treasury Department to create the “Greenback” dollar that was independent of any issuance of debt. Obama should tell the banks that the needs of the nation are greater than the needs or wants of the banks and that all debt payments on paper held by the FED and the “primary dealers” is suspended until further notice and that they are prohibited from selling any of the paper that they hold as of the date of the announcement. He should then direct the Treasury to issue the appropriate “US NOTES” as are required to meet critical needs. He can then turn to Congress and tell them that he has done his part and they need to do theirs and set about serious budgetary reform and take a two bladed ax to all the duplication, fraud and waste in the Federal budget.
Anyone seriously holding their breath waiting for Obama to do any of this is a bigger fool than I am in even proposing it.
So what will we get in the alternative? Nothing good I am sure. The can has been kicked down the road so many times that looks like it’s been put in an automobile crusher. The MOPE will continue until a Black Swan event, or a false flag attack occurs and these fools plunge us into yet another devastating war or a crushing police state. Take your pick, either one will make any “negotiation” over debt limits or rational budget reform become the aforementioned irrelevance.
Love your proposal but I agree it will never happen. First, Obama would have to be a statesman, not a communist/socialist. Second, remember what happened to JFK when he issued one dollar bills that were backed not by debt but by our massive silver reserves. And no, I am not a conspiracy nut but only a fool believes Oswald did it on a whim. If there was not evidence to the contrary, the records would not have been sealed until after the death of all the perpetrators and conspirators.
Greg
Great interview, economy of USA is doomed, the question is how bad will be the causalities? I hope you, your family, your friends and your guests will survive it.
In your interview Greg Mannarino said the losses in life will be on par with world war, the question is on what time frame? Years, decades or months?
On hyperinflation, I can’t tell the exact timing either, but I can tell which thing may trigger it:
When we will heard rumors about how Chinese and other creditors sold all of their (long term) T-bills to FED.
Because they remember Argentina 1999-2001, Zimbabwe or collapse of Soviet Union. Because of these examples the BRICS doing everything to save themselves, it is just a cold calculus for the worst case scenario. And as bonus USA may fall apart (2-4 parts)-there maybe will be even Republic of Texas: http://investmentwatchblog.com/why-texas-will-survive-the-soon-collapse-of-america/ . The BRICS’s favorite is gold, other PM and optionally commodity based currencies.
And the European banks are insolvents: http://www.zerohedge.com/contributed/2013-10-14/surprise-europes-banks-are-still-totally-insolvent
The dept ceiling deal was made, although it is temporary i.e. for months: http://www.zerohedge.com/news/2013-10-16/gop-statement-deal-boehner-admits-defeat
What do you think Greg?
One very small example:
It’s cooling off here in Phoenix, so I made my first purchase of Nestle’s Rich Hot Chocolate box for the season. Regular size standard box, just like years before. However, when I opened it, there were only SIX packs instead of the usual ten. In all fairness to Nestle, I then noticed that it had a small 6 on the front. Box was half empty. Trick packaging. Just a sign of the times. Nah, there’s no inflation.
Same problem with my can of peas. Smaller size can, more liquid inside, less peas, higher price. Yea, no inflation……
Cost of chuck roast in 1963: $0.49/pound
Eggs in 1966 $0.45/dozen
Interesting to see how prices have gone up (and contents in most packages decreased):
http://www.thepeoplehistory.com/60sfood.html
I remember when a loaf of sandwich bread was $0.39
Greg.
Another great and omminous interview. Just a question as to how things would work out in a hyper-inflation situation. Lets say you have $100,000 mortgage (or 2 or 3 what ever), and the dollar crashes. Now gold is worth $100,000 and ounce. Does that mean the oz. I purchased for say $1500, I can now sell and pay off my mortgage? Or will the banks somehow change the value of my mortgage to reflect the new dollar worth? If not, the gold or silver in your home safe will be nothing but a god send and life will not be anything like the poor slobs that do not have any physical metal.
Actually, they are doing something. They are buying bullets. See the Forbes article, among others.
Seriously, as the crisis approaches, there is one thing that could be done to lessen the impact.
People have bought some 65 million silver eagle coins which are government currency at the value of one dollar. Obviously these coins do not circulate as money at their face value.
If the government were to monetize these coins by publishing a quoted value for them, this could provide a backup form of money that would not lose value in a hyperinflation. Anytime inflation had its inevitable effect, the quoted value could just ratchet upwards.
By simply declaring these coins to be legal tender at the quoted price, there would be a functioning currency that would ease the crash and provide for a way for commerce to continue.
In the Zimbabwe hyperinflation, the US dollar performed this role of providing a backup currency so that commerce could continue at some level. In the crash of the US dollar, the backup would be these silver eagles. The thing to do would be to get this in place early so that people are used to the idea of these coins functioning are money instead of just being a store of value as they are at present.
We are truly in for a few years of real trouble. Instead of mouthing stupid saying like somehow they are going to balance the budget and get the spending under control, Congress could just do this one little thing. It would be easy and it would actually be something of worth.
I have actually submitted this idea to both my congressman and my senator. Unfortunately, no response. Lack of public awareness of the problem. There is no widespread understanding of the near approach of hyperinflation.
Also, some people are fixated on a return to the gold standard. Boneheaded. Since when in US history, did the gold standard actually control the amount of money in circulation. It was always a cycle of excessive bank issue of notes, followed by runs on the bank, followed by suspension of redemption of notes. This repeated regularly on a 15 to 20 year cycle. Then back to redemption to attract more deposits.
It is impossible to exactly control the amount of money. The moment anyone issues an IOU, money is created. The right idea is to accept this fluctuation but establish a monetary role for metal by means of a quoted value related to the market valuation of the metal which takes into account the amount of money in circulation.
Anyway. Sure do appreciate the work of John Williams. Thanks.
Very similar to the ideas of Hugo Salinas-Price.
http://www.plata.com.mx/Mplata/articulos/articlesFilt.asp?offset=10&fiidarticulo=162
Thanks Greg for the interesting interview.
They won’t do this as it under mines the usd
When did John Williams first predict hyperinflation? It seems to me it goes back quite a few years now.
Jimha,
He has long stated in his reports that 2014 would be the year it begins.
Greg
gold is down the most in it’s entire 5000 year history by 764 bucks 1990’s till 1176. miners down 90% till 99%. stop dreaming of inflation no one has money everybody is broke and can’t afford anything.
gold going to 750.00-1000.00. In the investing world people lost more in gold and miners in the 2 years than anything ever . Get over it stocks and dividends hitting news high up 50-100% plus 5-15 % payouts. Please learn to trade .
Ted,
Learn this. If the stock market was not being propped up with phony accounting, massive money printing ($85 billion per month) and lawlessness and non regulation it would be toast. I’d rather learn how to invest.
Greg
Thank you wall street troll. Who many pieces of silver do you get for each betrayal? 30?
I smell a troll.
Thanks for doing this interview with John Williams, I think he is right about everything, it is all about the cold,hard numbers.I believe the faces behind the fed are international, they are not only american. When hyperinflation hits most americans will not have anything but fed reserve notes in there pockets and will be SOL!! Thanks again greg for what you are doing.
Greg,
Thank you for providing this free website to help educate people about current and future events unfolding. I have been following for about 4 months and words can not express my gratitude for your continuous excellent interviews with all the very knowledgeable guests and their willingness to contribute as well.
Though no one can predict with a crystal ball what will happen exactly when and how. By having so many different guests with similar and different views and analogies I feel it helps build a great view into the future that is evolving.
In the future those that have followed your website will be able to watch, comprehend and react to what is happening while the majority of the people in this country will be wondering what in the hell just happened.
While anticipation can frustrate a person waiting for something to happen it is still better than being in the majority(95%??)of people wondering what just happened.
I challenge other followers of this website to forward it on to their peers. Again Thanks, God Bless and always looking forward to your next interview!!!!!!!!
Will H
Will H
Thank you for your very kind words and for you support of the site.
Greg
Greg, I don’t understand what happens in a hyper-inflation scenario to the person with a fixed rate mortgage. I have prepared in every way, but don’t have the funds to pay off my mortgage.
Thanks,
Margaret
Margaret,
It all depends what your loan documents say. Is there a provision where the bank can call your loan? This has never happened before in history, so I frankly would be guessing. I sure would not miss a payment. In a perfect scenario you would be paying off your loan in devaluating dollars. Thank you for your question. I am sorry I do not have a better answer
Greg
A lot of comments have been to pay down debt, but in the case of a home mortgage at a fixed rate. I would think if one had extra money instead of paying down the mortgage one should buy physical gold(??) and keep it off to the side and forget you have it. If ones income diminished, you could then use the gold worth more to pay on the mortgage. Just a thought. Any other perspectives?
Hi Greg,
I was wondering if you had any input on whether the dumping of treasuries would be the final nail in the coffin for the U.S. Most people are on the fence about whether we will see deflation or hyperinflation; if much of the world simultaneously dumps (or refuses to buy) treasuries, the Fed is surely to mop up the mess with more massive purchases–which would likely be hyper-inflationary if they respond and deflationary if they do not. I’m nothing more than a novice, so I was just wondering your opinion on the matter?
Thanks friend!
Justin,
I think I am in the Williams camp on this one. It would be highly inflationary because the Fed would be forced to keep printing. In order for deflation to be the case the Fed would have to stop printing and you know what happens then. At some point the whole system stops and resets and that is where the real pain will be for most.
Greg
If the Fed is likely to expand purchasing treasuries when the world begins to dump ’em, then China’s massive gold buying and all the new bilateral trade agreements bypassing the dollar as “the” reserve currency is a signal marking the beginning of hyperinflation for us! And since China is ramping up their call for a new world reserve currency, Williams is spot on at marking next year the beginning of hyperinflation (another debt ceiling being not far off to further enrage the world). All the PM manipulation that drives prices lower and makes monetary metals revolting to the public and all the hype that seduces the public back into stocks now makes sense: Joe and Jane are gonna be left holding the bag just like every other bust. And then they’ll be begging for silver and gold at at a 1000% mark up before the global economy is reset–busted again. Even though I’m not Joe, Justin does’t sound great either. The best to every one!
Greg I posted this link for some of your viewers who are late to the party and haven’t been paying attention. Stop lying to yourself. The dollar is toast. This proves it.
http://youtu.be/MWXlyTtrVD8
Some additional points:
All this talk of “preserving purchasing power”, which I understand and agree with…IF you’re able to buy barter-able commodities, like gold or booze), presupposes there will be anything ultimately left to buy. That’s false for two reasons. First, producers won’t produce into hyper-inflationary (or severely depressed deflationary circumstances), and as you indicated, when what’s there is gone…it’s gone. So, what good would hedges do you? What would there be to trade for?
Secondly, this would not be a local catastrophe, but a global one, and therefore competition for whatever might be had would be so fierce as to render whatever meager hedges the average person managed to put together before it’s inception would very likely find themselves just a destitute as one who didn’t have a hedge to start with. I mean, if you’re imagining a collapse so bad that commodity hedges actually are useful…for a while…that utility would be very, very short.
For the same reason, I laugh at those who’ve rushed to take the housing bait, as some store of intrinsic value. Even IF you own the house, inflationary taxes and utilities would eat you alive. Alternatively, if you didn’t own it, the real value of a house payment may be that of today’s loaf of bread, but…you’ll STILL need to buy THAT DAY’S inflationary bread at today’s house payment prices. You would lose no matter what you owned.
This is why the only solution, short of armed insurrection to really shut down the government, is the experience of a complete collapse. Nothing teaches like the pain of one’s own mistakes, and this one would be excruciating. The sooner it get’s here, the less excruciating (overall) it will be.
m
I’ll take my chances with a hedge. Even Wiermar German kept baking bread and making beer, but the cost continued to go up by the hour. Hitler’s favorite beer was a billion Wiermarks in the end. Gold held its value relative to.other commodities. And the US dollar, based on gold was as good as gold
I highly respect John Williams. He does not waver with his message. He is sincere and very serious. However, we should not hold him to his 2014 prediction for hyperinflation. If this event does not occur Mr Williams will just reevaluate and push the date back another year. No one has a crystal ball and we should understand this in advance. Hyperinflation will come. We just don’t know the time and date it begins. Also, we could stay in slow burn for much longer than we thought was possible. Possibly even 4 or 5 more years. We are in uncharted territory.
Thanks Greg. This was a great interview. It really confirms what I thought all along.
Hey, Greg, I just donated $20 though paypal to your site. Kevin
kevin2,
Thank you for your donation and for your support!!
Greg
When the markets realize the US is in a recession that is when the US dollar tanks and John’s hyperinflation concerns begin. Many people feel by early 2014 the US recession will be undeniable which is about the same time John’s anticipating hyperinflation starting. Reading between the lines I think he is saying this too.
The deflation posts above assume we never have a recession. We don’t need a black swan but a normal recession in the face of zero interest rates and $90+ billion of monthly QE. That’s when confidence fails in the ability of the Fed to save the day and the music stops regardless of whatever amount QE is increased!
Confidence is very fungible. One day you are confident she or he loves you and feel your future is certain and then in a heartbeat you are walking home alone, stocked, and in misery. The same is true when the economy doesn’t agree with our make believe economic recovery.
Phil,
I love this line in your comment, “Confidence is very fungible.” Great point. Thank you very much for adding your perspective.
Greg
Dear Greg,
This is a RED ALERT!
America is beginning to get Cyprused!!!
Chase Bank Limits Cash Withdrawals, Bans International Wire Transfers
“Chase Bank has moved to limit cash withdrawals while banning business customers from sending international wire transfers from November 17 onwards, prompting speculation that the bank is preparing for a looming financial crisis in the United States by imposing capital controls.
Numerous business customers with Chase BusinessSelect Checking and Chase BusinessClassic accounts have received letters over the past week informing them that cash activity (both deposits and withdrawals) will be limited to a $50,000 total per statement cycle from November 17 onwards.
The letter reads;
Dear Business Customer,
Starting November 17, 2013:
– You will no longer be able to send international wire transfers. You will still be able to send domestic wires and receive both domestic and international wires. We’ll cancel any international wire transfers, including reccurring ones, you scheduled to be sent after this date.
– Your cash activity limit for these accounts(s) will be $50,000 per statement cycle, per account. Cash activity is the combined total of cash deposits made at branches, night drops and ATMs and cash withdrawals made at branches (including purchases of money orders) and ATMs.
These changes will help us more effectively manage the risks involved with these types of transactions.”
More:
http://www.infowars.com/chase-bank-limits-cash-withdrawals-bans-international-wire-transfers/
Video:
http://www.youtube.com/watch?v=8SguXvr_K4Q
I know you recommend gold and silver, but I honestly think this is archaic and is not the way of the future.
Have you heard of the crypto-currency Bitcoin? It is currently the largest crypto-currency and has gotten some media attention. I used to be an advocate for it; however, I have done my research and found that Bitcoin has some technological limitations, energy inefficiencies, and security drawbacks. If you are looking for an alternative, I would recommend really looking into Peercoin (ppc). If you know people are considering bitcoin, I would recommend them considering peercoin instead.
From an environmental standpoint, Peercoin aka PPCoin attempts to provide superior benefits over traditional currencies by entirely eliminating the need for conventional mining of the planet’s limited natural resources. Overall, PPCoin aims to leave behind a smaller environmental footprint than would traditional “stores-of-value” such as gold & silver, all the while functioning to keep the same purpose & fundamental “safe-haven” attributes.
More:
https://en.wikipedia.org/wiki/PPCoin
http://peercoin.net/
Thanks but no thanks. I’ll.take a silver.dollar to a phantom currency like bicycling or its.untried contender. Almost everyone understands PM’s have value and will trade with you as such. Cybercurrency, not so much
I hate these spell check s thAt change what you type. Bicycling=bitcoin
Hi Greg,
Excellent interview with a man who’s at the top of his game.
But thinking through all of what is presented, JW raises a few more questions than he answers. Here is JW’s equation:
Solvency issues => Currency decline => Hyperinflation.
To date the US has been able to remain solvent (Fed monetising debt) to pay the bills. Solvency is a matter of state. When the country loses its “ability” to pay its debts, then it becomes insolvent.
Therefore the solvency of the US is not a slam dunk issue UNTIL the ability to create currency is removed.
Who will do that ?
When will they do it ?
Why would they do it ?
In addition to the solvency part of the equation….there is the matter of the currency decline.
Again we have some dilemmas here.
What will drive the currency lower ?
The Market ? HF’s ? Bond Vigilante’s ? Sovereign Funds ?
Keeping in mind that the Biggest external holders of USD currency and bonds have a vested interest to keep the USD where it is, save for annihilation of their respective reserves. The only other possibility is the creation of an alternate “reserve” currency OR that US citizens exchange their dollar assets/holdings into something more tangible …en masse. To date, printing ($7 TLN additional notes) has certainly had a detrimental effect on the USD across the international basket of currencies, but it hasn’t created the anticipated dramatic fall that has been forecast. It has also attracted much angst amongst the Eastern Countries. Devaluation is a more likely scenario for the Government when backed into a corner.
The third part of the equation is Hyperinflation.
Firstly we cannot compare (as many do) to the other episodes of Hyperinflation that have affected many countries in history (esp. Weimar Germany).
The USA has the privilege of being the world’s default reserve currency. What other country in history has experienced Hyper Inflation whilst being the reserve currency ?
To experience a Hyper Inflationary event…. would necessitate that all holders of currency (USD) are engaging in the simultaneous act of quitting dollars….at ever increasing speed.
Think that through….is it feasible ? Possible ..yes…likely…NO !
The implications of that USD Hyperinflation…is that it simply strangles (for want of a better word) the global economy. Forced devaluations across the spectrum of world currencies would be the order of the day.
I agree that Hyperinflation is a very bad outcome…one that the world (not just the USA) wants to avoid. No one is immunised against that monster.
JW brings up an interesting point in closing… “The crisis is coming and these guys in Washington know it, and they are not addressing it.”
I ask ..Why are they not addressing it ?
Are they without options/alternatives ?
What do they fear ?
Is there a higher order/plan, which only becomes relevant when it is required.
Why aren’t the public addressing the matters with the local/state/federal members.
The Public is not doing enough to right the wrongs.
We are all morally corrupt and complicit if we do nothing by accepting the fate that lies ahead.
We bare witness to the inept government and we know about the theft, corruption, manipulation, voting scams, welfare/health/education debacle and the list goes on ad infinitum …and yet ?
It needs more than idle chatter. It demands a greater voice/awareness and a bigger stage.
The Public at the end of the day …has the loudest voice. It is more powerful than any ruling government.
If things are getting to the pointy end….and they deteriorate from here, then time is against everyone. Its hopeless. We will capitulate to the central planners and continue to trust them to do what is required (under force or by acceptance).
In that scenario I fear for mankind.
Liquid motion,
It may have more to do with the acceptance of the dollar than the creation of new ones. I don’t know, but that is just a thought. Thank you for your participation in the discussion on the site!!
Greg
Mr. Williams is probably one of the most qualified economists when it comes to hyperinflation. He is well-respected in our circles for his honest compilations of the economic numbers which the government routinely lies to us and manipulates in their sanitized versions of economic government statistics. However, Williams is not saying anything new. Just do some of your own basic historical research on the inflation rates experienced in the Fall of Rome, the Assignats of France, Weimar Germany, Hungary, Zimbabwe, etc.
Always without exception, the transition from inflation to hyperinflation happens very quickly, like in the speed of light or the flick of a switch. When people no longer want to hold their currency because of rising inflation, then they trade their paper money for “real things”(sachwerte in Germany) like land, hard assets, soft commodities, or any tangible thing, even pig-iron like they did in Weimar Germany. This abandonment of paper money is called the velocity of money, when this progression takes a life of its own and increases exponentially. And just go to the grocery store today, you know we have inflation rates much higher than the approximate 2% that our government contends. Try closer to 8 or 10%, so the rates can really increase from where we are now!
I’m particularly worried because hyperinflation has never happened to a world reserve currency like the US dollar, and Americans definitely do not have a strong inner moral constitution like they did in previous hard times. Our coming experience could prove to be the mother of all monetary collapses, one for the history books.
I’m extremely concerned beyond starvation and rioting because the political ramifications of this collapse should logically lead to a tyrant who will promise to bring us civil order with the sacrifice of what few freedoms we have left. Also, I suspect that this has been carefully planned so that a new world currency can come from the ashes of the dollar, which will most assuredly be abused and manipulated again by a cabal of world bankers with their interlocking world power elites. I will bet that they do not have philanthropic motives in mind for the billions in humanity.
I really don’t know Greg.
Just look at the posts you have here.
Those who believe gold is a good investment are almost universally ridiculed. The arguments against it are compelling.
Some of the posts make sense that we are no where near a disaster and the economy has a bright future.
I guess I have heard too many cry wolf far too many times.
None of the deadlines or predictions have even come close to happening….this is very unsettling.
I am trying to say objective through all this
Thanks Greg
dave,
You are missing one very big factor and that is the massive money printing, phony accounting and zero % interest rates propping up and extending this Ponzi scheme. When it ends, nobody is going to come out and blow a trumpet. It will end quickly and badly. It is an ongoing and accelerating process. Just trying to help you stay objective and informed.
Greg
Greg, please set down & hear this, just look up the “ACT OF 1871” on you tube & then tell all of what you think, deep down, just your thoughts, no out side input, just your gut!
If we bow to the weakness of those in 1871, we are no better & even worse, we know better now!
Peace be You!
This guy scares the hell out of me!
Happy Thursday all
As long as a nations health (or a worlds for that matter) is measured using scales like “GNP, GDP, hyper inflation, hyper deflation, stock values, precious metals prices, hedges and etc. etc.” , we will probably continue to play guessing games about when and how the pyramid will be reset. Sort of like the movie Ground Hog Day using the movie Trading Places type plot and Characters. Yes it seems the whole conversation should change from what’s good for profits of the few (always confused with the good of the many) to what’s good for the spirits of people and our home. Problem is people who suggest this way of life find themselves nailed to crosses or moving next door to the displaced natives of Diego Garcia. Even so is that a good reason to not at least have the conversation? We can pick any of the above scales we want to measure our health and we will always end up back here at some point. Or not?
Greg, I had to write after the Gang of 535 voted late last night. Does Joe Public know that there is no debt ceiling in place now? How about that for the Republicans to say they got some concessions. I wonder what Mr. Williams would say about unlimited debt without a ceiling, sounds inflationary to me.
How about interviewing Martin Armstrong ?
He’s been quite accurate on his call for deflation, and no hyperinflation as credit contraction far outweighs QE, and further he’s the only one who has accurately called the direction of gold from the peak in 1900 to below 1200.
Explain what you are basing his claim of predicting deflation. What exactly is decreasing in price that I need. Don’t point to tech as they phoney up the stats on that. I am waiting with baited breath.
Margaret O.
I deal with foreclosure properties, so I can answer part of your question. Depending in which state you live, the bank can call a default if you are past 30 days on a payment. At that time they can legally begin foreclosure proceedings. The bigger question is who is going to call the note due, if the bank is insolvent from a collapse? It certainly won’t be the Federal Government since they will be insolvent as well. It won’t be like the depression, when there was still some gold in Fort Knox. I really don’t know? As far as utilities, there won’t be any since the power company will not have money coming in to pay their usage fees. Most power companies buy power from other producers. As far as local taxes. Who knows? It depends on how broke your county gets. My grandfather got paid to be a tax collector during the depression for a county he didn’t even live in. The county he collected in , was so broke they couldn’t pay their employee’s. But he was getting paid by the Federal Government to do it. Bottom line. Its all speculation. Do whatever you can. Doing something is better than doing nothing, and hoping it will all go away. I have a mental picture of a couch potato dead on the floor next to his empty bag of Chetto’s and a remote in his hand. That’s the future for many.
Greg,
This was something that caught my eye….
Nancy Pelosi “Reckless and irresponsible” loss of 24Bln in GDP growth….through budget stalemate/debt default/government shutdown drama…cost the USA….
http://www.politico.com/story/2013/10/house-democrats-blast-gop-for-budget-saga-98494.html
Quick check of numbers tell me that $85 BLN / month (Created by the FED)in new DEBT equates to $2.83Bln per day or $40 Bln over 14 days(of procrastination) ….SAVED. The Lord giveth and the Lord taketh.
A balanced argument is more compelling Nancy.
Besides the Republicans didnt cause the negativities being cast upon the US and the USD….the free money idiots under Clinton and Obama did it all.
I dont affiliate with either party. Both are as corrupt as each other.
Whats missing in politics is sound, logical and unbiased argument and ACCOUNTABILITY. Its clear that the current players wish to continue the charade by continuing to blind the public.
WHO HOLDS THESE CLOWNS RESPONSIBLE FOR THEIR ACTIONS ?
IN A DEMOCRATIC SOCIETY.. WE AS THE PUBLIC DO.
While you and I hold the pols accountable, we are in the minority.
Greg,
URGENT….
this article might spark some interest amongst readers and listeners…..please post immediately….
http://www.infowars.com/chase-bank-limits-cash-withdrawals-bans-international-wire-transfers/
Its happening right now….be very concerned.
Currency Wars -> Trade Wars -> Capital Controls -> World Wars ???
After a few days of punditry, it is apparent that the Tea Party types haven’t learned one thing.
Being XENOPHOBIC by nature, they don’t care about the rest of the world , and are determined to blow this system to smithereens, and will laugh about it, until their OWN FAMILY is in financial trouble.
Everyone remains lost in their own bubble, and chaos is INEVITABLE.
Justin King,
So you think people concerned about the massive debt and $1 trillion dollar annual short fall are “XENOPHOBIC”? You think people who dare to voice opposition to a gigantic expansion of another U.S entitlement are the bad guys here? I think the Democrats are pretty selfish and reckless here because the path they are taking will blow up the global economy. Everyone on the planet will lose big time when countries sell, sell, sell, U.S. Treasury debt. The Democratic way just takes longer but the financial meltdown will be far worse than if the U.S. cut spending. Obama could have avoided the entire shutdown mess if they would postponed the individual mandate same as the Employer Mandate he pushed off for 1 year. They ALL know what is coming, and that is cruelest thing of all. Thank you for weighing in.
Greg
One more thing, take a look at this video about debt. It makes my point and it’s kind of funny: http://www.youtube.com/watch?v=Li0no7O9zmE
No offense Justin but we have bankrupted our country via IMF , UN and assorted I’ll advised police actions. It’s time to clean our house. It’s funny you correlate fiscal responsibility with xenophobia. I’d hate to see your view of good food or love.
Greg – John Williams is a good guy, but who really knows when hyperinflation will start? He’s been wrong before about the timing issue.
Also, this headline caught my attention on the sidebar under Top Stories: “Leonard Pitts Jr.: Dr. Ben Carson sinks to a new low, comparing Obamacare to slavery (This is outrageous).” Who wrote the last 3 words in parentheses? Why is this outrageous? Ben Carson is a brilliant man, probably 10 times smarter than you or me, and his comparison seems to be quite true. Obamacare might not be slavery for just the black race, but for all people in America. Again, why is this outrageous? I’m dying to know, Greg. Maybe I misunderstood your brief editorial.
Just Justin,
I wrote (This is Outrageous.) It is outrageous because the premise of anyone disagreeing with the President being either a racist or facilitator or racism. I totally disagree with Obama Care and I am not a racist. It is a job killing expansion of the entitlement system that the U.S. cannot afford to stack on a $17 trillion annual deficit. Falsely accusing an entire political movement of racism and bigotry to gain political points is a appalling and anti free speech. You did not misunderstand I describe it in detail in the Wrap-Up.
Greg
Greg,,
Love John Williams. Thanks for bringing him back. Two things stuck out. First, only way default can happen is by Obama’s action or inaction. Scary stuff. Second, that we can choose pain now or fatal economic devastation by pushing it off. Our debt is like our best nuclear sub that is sinking out of control. As it gets closer to crush depth, leaks spring and a few drown but the leaks are contained to allow further time to fix. Instead of attempting to fix the issues and blow the ballast tanks, these politicians man the ship stop for breakfast and a nap ensuring that the ship implodes. Best analogy I can come up with. I’d get off the sub if I could but I can’t hold my breath long enough to surface. Trying to make my way to the escape pod while the morons eat . Peace
…..soooo it will sink slowly; yeah more time to do more. 🙂
It seems like the “gold bugs vs. rural 50-lb-sack-of-rice preppers” dichotomy is the latest doomer debate du jour. To me, it epitomizes Freud’s “narcissism of petty difference” — I think any reasonable person could agree that owning a little gold and silver is a good thing, but no substitute for food and land — but realistically, everyone is just going to do what they’re capable of and let’s face it, despite all informed people being aware of the calamity that’s coming for over a decade now we’re probably still only a fraction of a percent of the population (in fact, we’re probably shrinking, since bashing weirdo “preppers” is par for the course in the mainstream media.)
I personally think that if we truly _do_ experience a systemic collapse, all bets are off. Your gold, chickens, rice, or whatever you have that you think is going to make you “survive” isn’t going to mean a thing to a carload of Crips with AK-47’s intent on cannibalizing your family, or to a criminal government that can seize your land because you have “controversial” political views (under the guise of some trumped up Randy Weaver-type charges, of course.) It could very well be that some of the people _least_ aware of these impending calamities might, in fact, be the ones that actually already have pre-existing social networks (I’m thinking mainly of gangs here) that will allow them to adapt much quicker, versus some well-read guy with a liberal arts degree that reads Chris Martenson’s website regularly. I mean, at the end of the day, I’d rather know some prison-hardened Aryan Brotherhood or Hell’s Angels type guys that might know more about cooking meth or street fighting than anything we talk about on this website. Likewise, I have some farm relatives in Kansas and Nebraska that I guarantee you haven’t ever heard of Ben Bernanke and don’t have an opinion on anything that transpires outside of a ten-mile radius of their home not related to crop prices (except for maybe the Huskers schedule) but they just so happen to be sitting on thousands of bushels of grain — but even they are not “safe” from marauding urban hordes. Point being, anyone who thinks that they’ve got the magic formula for survival in a situation like that is deluding themselves.
As for me, I’m currently single, overworked, and tied to living in a large urban area. There’s no point in me fooling myself into thinking I’m going to build an off-grid house and permaculture plot. Of course, I have some basic necessities (backup power, firearms, a couple of weeks of food and water, etc.) Basically, I want to get through your basic “Hurricane Katrina” sort of scenario. I’ve helped a friend of mine build a “compound” in the Pacific Northwest that is a 50-lb-bag-of-rice type guy (that also owns a couple of “assault rifles” and grows a good chunk of his own food) but even he admits that you can’t do this sort of thing on your own — you need to _network_ with a lot of people that just aren’t going to know or care about issues relating to fiat money or the Federal Reserve or what have you.
I do really not think that the system is going to collapse any time soon. Maybe in another 50 years or so… but unfortunately, the same people ruining things now are probably going to be the ones that emerge on top of the scrap heap after the dust settles. I don’t want to be pessimistic, but after reading about a century-plus of false flags and banking conspiracies, I don’t see anything other than divine intervention making it otherwise. I try my best to inform family and friends but to be honest, I’ve pretty much given up on that as well — anyone that doesn’t “get it” by this point is pretty much a lost cause. In addition, I’ve also personally experienced a bit of “apocalypse fatigue” after a decade of studying these issues (ever since I read Eustace Mullins back in 2004, my curiosity of the financial system triggered by Warren Buffet’s infamous “derivatives as ‘weapons of financial mass destruction'” comment in 2002.
Maybe hyperinflation will happen in 2014, but I kind of doubt it. It’s probably more likely that we’ll just experience very _high_ inflation. Ten, maybe fifteen or twenty percent a year (the government cooking the books Argentina-style and stating the official rate as five or six percent naturally.) But then again, as stated, maybe I’ve just grown a bit weary of the end-is-nigh meme.
nice post
I have read several post nay shaking gold and even provisions for a disastrous event. 1) the smartest people on the planet, the Chinese (used to be us until we moved from wealth manufacturing to wealth theft), are getting rid of U$D and buying as much gold as possible. 2) things (Shi-ite) happens, it doesnt cost a lot.to buy some water, canned goods, flour, beans, rice and powdered milk.
It seems to me that one who is intelligent would take the money spent for two evenings out and have a small safety net. I’d also recommend to put less in a 401-k or savings (long term) and hedge with some PMs. I don’t sell either of these commodities and doubt I can persuade anyone with logic but I thought I would give it a shot. And speaking of shot, a 12 gauge pump and few hundred rounds of buckshot are not that expensive either. I beg and pray that God bless us all and shelter us in his hands. I also believe God helps those who help themselves.Good luck
Good interview Greg but John Williams is dead wrong on his 2014 hyperinflation/currency collapse. The U.S. dollar is the worlds reserve currency and has the most potent military in the world to make sure that doesn’t change.
America is not Zimbabwe or Argentina therefore his analysis and comparisons are hyperbole. I’m sure his extreme predictions gets him a lot of interviews but I don’t see much value in his commentary. I would not be surprised to see some inflation catch everyone by surprise next year but nothing like Williams is forecasting.
Keep up the good work!
Ralph
Ralph Cap,
We will just have to wait. By the way he said that is when it would start to hyper-inflate. Thank you for your support and kind words.
Greg