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Posts tagged ‘hyperinflation’

Gold, Silver and Fraudulent Investor Traps

By: Jim_Willie_CB

The feverish  positive sentiment has left the Gold & Silver market in the last two  months. Raised margin requirements during falling prices alongside naked short  ambushes in the COMEX, coupled with permitted asset damage from debt  monetization conducted more in secrecy will always help to dampen enthusiasm.  But with the billboard message on the European subway walls and boulevards and  news magazines stating the obvious, that the European debt crisis has no  solution, that Germany has no more checks to write in funding the bailouts,  that Greece is set to default, that leaders in political spheres are opposed by  bank leaders where the final decisions are made, the GOLD & SILVER PRICES  ARE SET TO ZOOM. Only the dummies sold in the last round of ambushes and  interrupted recoveries. The precious metals have suddenly awakened.

The old defended  range for the two metals was easily overrun as a splash of reality hit the  market faces. A mad scramble is likely from here onto the end of year, as  people realize that hyper-inflation is the solution on any massive bailout with  clearer gigantic needs, and as people realize that a broad string of bank  failures will drive gigantic flows into safer places since sovereign bonds will  go from sacred to toxic. The powerful decline in September, down $200 in gold  and down $10 in silver suddenly have presented a ripe easy recovery without  resistance. A powerful reversal is near and coming. Many investors will rush  back in, paying higher prices than where they unwisely sold. Many investors  will rush in, seeing banks and government bonds as ugly options

full article at source:http://www.marketoracle.co.uk/Article31185.html

Don’t Doubt Bernanke’s Ability to Create Inflation (US News)

May 26, 2010

With the Dow Jones now down 11% nominally from its high last month, NIA has been getting hundreds of emails and phone calls asking if there is any way we could be wrong about the threat of hyperinflation in the U.S. and if indeed deflation is the real problem we need to be worried about. The names Nouriel Roubini, Robert Prechter, and Harry Dent get mentioned to us a lot, with many NIA members asking why these so-called “experts” believe deflation is in our future.

Roubini, Prechter and Dent have been wrong about the overwhelming majority of their economic forecasts over the past decade. When it comes to their latest predictions about deflation, they will actually be right to some extent. We will see deflation in some assets like stocks and Real Estate, but only when priced in terms of real money – gold and silver. In terms of dollars, prices for pretty much all goods and services are guaranteed to rise dramatically over the next few years. Creating inflation is the only thing in the world Federal Reserve Chairman Ben Bernanke knows how to do and is good at.

During the past week, the mainstream media has shifted from saying we are experiencing an “economy recovery” to now saying we are at risk of a “double dip recession”. Nothing fundamentally has changed in our economy. The fact is, the U.S. economy has been in a recession since mid-2000. All government reported positive GDP growth since mid-2000 has been due to nothing but inflation. Our economy should have experienced a depression in 2001 and an even greater one in 2008, but the depression has been temporarily avoided at the expense of an inevitable Hyperinflationary Great Depression down the road.

NIA believes it is impossible for the U.S. to experience price deflation when the Federal Reserve has held interest rates at 0% for the past 17 months. Sure, there will probably be a second wave of mortgage defaults that could cause another round of forced liquidations on Wall Street, but during any future period of forced liquidations, we doubt the U.S. dollar will still be looked at as the “safe haven” it was in 2008/2009. Gold and silver will soon be looked at as the only real safe havens because they are the only assets that provide protection from both a deteriorating economy and massive inflation. Precious metals will decouple from the Dow Jones and we will begin to see gold and silver rise at the same time as the stock market falls.

Bernanke was questioned yesterday following a speech at the Bank of Japan about whether a 4% inflation target would be better than the Fed’s current inflation target of 2%. Bernanke responded that “it would be a very risky transition” if the Fed changed their inflation target, claiming that U.S. inflation expectations are currently “very stable”. (NIA estimates the real rate of U.S. price inflation is already north of 5%.)

Unfortunately, no policymaker in the world is smart enough to accurately control the rate of price inflation through the manipulation of interest rates, and certainly not Bernanke. It’s mind-boggling to us how the mainstream media could believe anything Bernanke says about inflation after how wrong he has been about everything else. Maybe the press has already forgotten that it was Bernanke who in July of 2005 said, “it’s a pretty unlikely possibility” that home prices will decline across the country, “house prices will slow, maybe stabilize but I don’t think it’s going to drive the economy too far from its full employment path”. We are 100% sure that Bernanke will be proven wrong again when it comes to inflation.

The U.S. Dollar Index has rallied from 75 to 87 since December and is approaching its high from March of 2009 of 89. This has given Bernanke the cover to keep interest rates at a record low 0%, but NIA believes Bernanke is misreading these economic signals. When the U.S. Dollar Index reached its high last year of 89, gold was only $900 per ounce. Today, gold is approximately $1,200 per ounce. The fact that gold has held up so strong despite a rapidly rising U.S. Dollar Index, proves that our financial system is getting ready to overdose on excess liquidity. The U.S. Dollar Index has rallied only because it is heavily weighted against the Euro. The Euro is now overdue for a huge bounce, which we believe will send the U.S. dollar crashing while sending gold to new record highs.

It’s not good for us to pay too much attention to short-term volatility in the financial markets. Short-term “noise” often causes investors to second guess what they know is true. In our new documentary ‘Meltup’ (which has now surpassed 441,000 views in 10 days) we said, “If stocks were to see a nominal decline one last time, we will likely see Bernanke shoot up his largest ever dose of quantitative easing, which could turn the current Meltup into hyperinflation.”

We are seeing signs of this coming true already. Washington is now calling for another stimulus.  quantitative easing, senior economic adviser to President Obama, has asked Congress to begin drafting a new stimulus bill in an attempt to prevent a “double dip recession”. The proposed size of this new stimulus is so far only $200 billion, much smaller than the last $787 billion stimulus bill. However, we are sure Congress will increase the size of it, especially if stocks continue their nominal decline. The new stimulus bill will likely coincide with trillions of dollars in additional quantitative easing by the Federal Reserve.

The National Inflation Association

For all those interested in the US economy I suggest  you look at this!

The National Inflation Association is an organization that is dedicated to preparing Americans for hyperinflation and helping Americans not only survive, but prosper in the upcoming hyperinflationary crisis.
With a $12.8 trillion national debt, $6.3 trillion in Fannie/Freddie debt and $60 trillion in unfunded obligations for programs such as Social Security, Medicare and Medicaid, the U.S. government has total obligations of over $79.1 trillion or 5.5 times our GDP of $14.2 trillion. It is our belief that the United States for all intents and purposes is bankrupt and Americans need to take steps immediately to protect themselves from the potential loss of the purchasing power of their U.S. Dollars.
NIA believes the largest financial crisis in history is ahead of us as a direct result of the U.S. government unwilling to accept a much needed recession. We are now at a point where our national debt is impossible to pay off. Due to rising interest payments on our national debt, it is unlikely the U.S. will be able to balance its budget ever again. Foreigners will eventually stop lending the U.S. money and the Federal Reserve will most likely have to print the money to fund our deficit spending out of thin air.
Our goal is to help as many Americans as possible become aware of the disaster we are rapidly approaching. In our opinion, the wealth of most Americans could get wiped out during the next decade, but it will be an opportunity for a small percentage of Americans to become wealthy by investing into companies that historically have prospered in an inflationary environment, such as Gold and Silver miners and Agriculture producers.

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