The Federal Reserve is now trying to figure out ways to boost inflation expectations… so that Americans are encouraged to spend more before their money is worth less. Unfortunately, not only will their money soon be worth less, it will literally become worthless! Words: 904
Major Inflation – Even Hyper Inflation – by 2012?
So says the National Inflation Association (www.nia.us) in an article* which Lorimer Wilson, editor of www.munKNEE.com, has reformatted into edited […] excerpts below 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.) They go on to say:
If the Federal Reserve doesn’t immediately raise interest rates dramatically [and there is absolutely NO signs that is going to happen in the foreseeable future], there is serious risk of the current “meltup” turning into major inflation – even hyperinflation – before the end of 2012 (see more here).
The Federal Reserve Has Lost Control of Inflation
The Federal Reserve’s words can no longer control the present situation. They are saying they want inflation so that when massive inflation does arrive, it appears as though they still have control. With gold up [over 25% and silver up 60% since the beginning of the year] it is obvious that the Federal Reserve has completely lost control of inflation and a major currency crisis is already underway.
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The world is flooded with excess liquidity of U.S. dollars. Up until now, Americans have been blessed by the fact that the world has been hoarding these dollars, believing they are a safe haven during these uncertain economic times. The world’s confidence in the U.S. dollar and strong demand for U.S. treasuries despite the need for the Federal Reserve to monetize our $13.6 trillion national debt will one day be looked back at as the most mysterious paradox of our generation.
Hyper Inflation Would Lead to Societal Collapse
The average American today is pouring money into U.S. treasuries. They got crushed when the dot-com bubble collapsed, they got decimated when the real estate bubble burst, and now they are loading into dollar-denominated assets. Simultaneously, the Federal Reserve is trying to destroy the purchasing power of the U.S. dollar. The only thing the Federal Reserve should be focused on today is preventing hyperinflation, because hyperinflation always leads to complete societal collapses.
Investment Advisors Don’t Know How to Protect You From Inflation
Almost all American investment advisors tell their clients today that government bonds are the “safest investments there are” because they “are backed by the full faith and credit of the government”. It is very common for investment advisors to recommend to their clients that they put 25% or more of their assets into U.S. government bonds and keep another 25% of their assets in U.S. dollar cash. Yet, there are almost no investment advisors in existence who recommend to their clients that they put more than 5% of their assets into gold (see more here).
Investors who only put 5% of their assets into gold might find that they only retain 5% of their purchasing power in the future. Neither NIA nor its co-founders are investment advisors, but our commentary has consistently highlighted our beliefs that there is no such thing as owning too much gold. NIA believes that individual investors’ portfolios should be 100% in assets that will retain or increase in purchasing power during hyperinflation. The only question today that smart investors should be asking themselves is what percentages do I put into physical gold, physical silver, mining stocks, agricultural commodities, etc. (see more here).
Obama continues to state he will not raise taxes for those earning less than $200,000, yet he is doing absolutely nothing to reduce government spending. With China and Japan getting ready to pull the plug on the U.S. dollar, future U.S. deficit spending will have to be paid for by outright money printing (see more here). The price inflation that is ahead as a result of monetary inflation is the absolute worst thing that can happen to middle class Americans. Obama’s inflation won’t hurt the wealthy as much because the wealthy, if they become educated and act quick enough, can still preserve the purchasing power of their wealth by buying gold and silver.
Obama’s plan to reduce our budget deficit from $1.6 trillion today down to $752 billion in 2015 is contingent on 5.58% annual GDP growth and interest rates on our public debt of only 4.1%. The only way we will see 5.58% annual GDP growth is with massive inflation and when inflation spirals out of control, so will interest rates. [That begs the following questions: Do you have gold and/or silver bullion in your portfolio? If so, do you have enough? If not, why not? Bottom line:
What are you doing to protect yourself from coming rampant inflation?
- 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.
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