By Greg Hunter’s USAWatchdog.com
Economist John Williams is sticking by his assessment that the economy is in deep trouble. Williams says, “What we are seeing is a very big fiction by the financial media and the political media that the economy has recovered. The economy has not recovered. . . . We are seeing all sorts of things that indicate the economy is not recovering and never has recovered, and it is turning down again.”
On the recent wild gyrations of the stock market, Williams says, “I can’t give you good reason for why the stock market is as high as it is. The fact you are seeing this volatility means there are a lot of people who are very nervous about what is going on and where things are in the market. It is probably one of the great bubbles of all time. It most likely will collapse along the lines of the U.S. dollar in response to the reality of no economic recovery. . . . I can’t think of a more vulnerable market than what we are seeing here.”
On the dollar, Williams says, “The big factor here is the U.S. dollar and all sorts of things that impact that. The economy is probably the biggest. You also have the Fed policy. Right now, there is the presumption that the easing is over and they are going to raise interest rates. Guess what? If the stock market continues going as it is and the economy starts turning down, I think the Fed is going back to easing (money printing) again. They will use the economy as cover for its actions in trying to prop up the stock market and trying to prop up the banking system. The Fed’s primary function in life is to prop up the banking system. A weak economy is not good for the banking system. The economy is a sideline for it, and there is very little it can do, but it can use the weak economy as political cover for flooding the system with liquidity and keep the banking system afloat.” Williams goes on to say, “Any pull-back from the ‘taper,’ any shift in expectation, the Fed is going to have a QE 4, will tend to hit the dollar very hard. Along with that, a spike in gold prices and we’re off and running. . . . You are getting a confluence of extraordinary factors that are coming together that will cause the dollar to break. You’ll have a panic flight from the dollar along with dumping of U.S. Treasury bonds by foreign owners. We are coming in on the end game here.”
On rumors swirling about coming QE 4 by the Fed, Williams predicts, “It’s a virtual certainty in the event of a stock market crash. It’s a certainty in the deterioration in the quality of the banking system. That’s happening.” Williams contends, “You are not going to have a healthy recovery here until the system has had a chance to shake out all the waste and the fat, and people can sit back and say now we can move forward on a positive basis. That environment is not there. We are still living in the shadow of the panic of 2008. The latter part of that panic is now in the final stages of playing out. It is not a happy circumstance. All they did was push it into the future.”
On Williams’ 2014 hyper-inflation forecast, Williams says, “I have been forecasting hyper-inflation in 2014 for some years now. We are coming to the end of 2014, and it hasn’t happened. A prerequisite is a collapse in the dollar. A collapse in the dollar can happen at anytime . . . and at this point, I am not looking to change the outlook.”
On the fear factor of investors, Williams says, “I have had a lot of calls from clients recently to that effect, yes. I can tell you what they are seeing in terms of their business, after adjusting for inflation, and that’s using the government’s inflation number; they are not seeing any sales growth. How can you have no sales growth in 80% of the economy and have a booming economy? It’s not happening.”
Join Greg Hunter as he goes One-on-One with founder of ShadowStats.com, John Williams.
(There is much more in the video interview.)
After the Interview:
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