The National Inflation Association (NIA) believes that if the Federal Reserve doesn’t reverse course immediately, we will see hyperinflation where all Americans will become billionaires by the year 2020, if not much sooner. Being a billionaire in dollars won’t mean anything. The wealth of Americans later this decade will be calculated based on how much gold and silver they own. Words: 1021
So says the NIA (inflation.us) in an article* which Lorimer Wilson, editor of www.munKNEE.com, has reformatted below with edited […] excerpts for the sake of clarity and brevity to ensure a fast and easy read. (Please note that this paragraph must be included in any article reposting to avoid copyright infringement.) The NIA goes on to say:
The Federal Reserve this past week shifted its purpose from being an inflation fighter to now being an inflation advocate [with]
a) Charles Evans, President of the Federal Reserve Bank of Chicago, saying that inflation in the U.S. is too low and the Federal Reserve needs to publicly declare a new goal of having inflation that is much higher than its informal 2% target and
b) William Dudley, President of the New York Federal Reserve, calling current low levels of U.S. inflation “a problem” because “it means slower nominal income growth” which is unacceptable because it “means that less of the needed adjustment in household debt-to-income ratios will come from rising incomes. This puts more of the adjustment burden on paying down debt.” In other words, he wants to monetize our debts by printing so much money that all Americans are earning enough income to pay back their debts. This is pure insanity!
Bush’s $200 billion stimulus sent oil prices to $147 per barrel and Obama’s $800 billion stimulus prevented massive price deflation (which would have made cost of living in America a lot more affordable) during a period of rapidly rising unemployment. Now Dudley is calling for the Federal Reserve to purchase $500 billion in bonds, but the Federal Reserve’s real quantitative easing will [probably] be much greater… [For the record, however,] our gut feeling is that we are practically at the point where the U.S. economy is about to overdose on any further quantitative easing.
Unintended Consequences of Inflation
The National Inflation Association (NIA) fears that the unintended consequences of such a policy will be:
1. An insurmountable currency crisis [which] will lead to:
a) a U.S. societal collapse with
i) class warfare,
ii) millions of Americans starving to death, and
iii) a return to a barter based system that will last until we can come up with a new form of workable government based on sound money that is backed by gold and silver.
2. A dramatic decline in the real incomes of Americans. Inflation never creates wealth, but instead misallocates resources that would have went towards productive purposes if the free market was allowed to operate. During periods of high inflation, no matter how fast incomes rise nominally, they never keep pace with rising gold prices.
Back in 1970, the median family income in the U.S. was $9,870. During the next decade, the U.S. government created unprecedented amounts of inflation, which led to the median family income rising in 1980 to $21,020 for a gain of 113%. Gold was only $35 per ounce in 1970, but rose to a high in 1980 of $850 per ounce for a gain of 2,329%. One year of income in 1970 would have bought 282 ounces of gold, but one year of income in 1980 would have only bought 25 ounces of gold. Priced in gold, families saw their real incomes decline during the 1970s by 91%.
There will come a time when the U.S. dollar crashes, with gold rising hundreds or even thousands of dollars in a day, and silver potentially doubling or tripling in value in a day. Trust us, you do not want to be on the wrong side of the trade on that day. NIA is focused on the long-term risk of hyperinflation and is not concerned about short-term volatility.
Gold, [even at its current price], is still very undervalued. If gold’s total bull run from its 2001 low of $256 per ounce equals a percentage gain of 2,329% (just like the 1970s) we will see a gold price of $6,218 per ounce. Silver, at a new 30-year high of $23 per ounce, is still an absolute steal…The gold/silver ratio has declined in recent months from 70 down to 58, but is still well above the historical average of 16. In our opinion, because silver has been undervalued for so long with artificially high gold/silver ratios, once JP Morgan is forced to cover their naked short position in silver we could see the ratio decline to an artificially low level as low as 8. Therefore, if we see $6,218 per ounce gold, we wouldn’t be surprised to also see $777.25 per ounce silver.
Hyperinflation is Coming Soon
We may be forced to soon change our hyperinflation forecast from the years 2014-2015 to as soon as the year 2012 [if recent increases in a wide array of agricultural commoditities is any indication]. During this past month of September alone we saw huge gains in soybeans +9.5%, rice +10%, corn +12%, orange juice +13%, cotton +17.5%, and sugar +19.3%.
All countries are now in a war with each other to have the weakest currency, with the false belief that having a strong currency destroys their export markets.
When history looks back to the time period we are currently in, our world leaders (especially our elected representatives in Washington) will be considered the most incompetent and corrupt in world history.
Hyperinflation is coming! Hyperinflation is coming!!
– The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
– Permission to reprint in whole or in part is gladly granted, provided full credit is given as per paragraph 2 above.
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