There’s also no doubt in my mind that another inflationary surge is right around the corner….probably starting no later than September. [Here’s why and where you should invest to get the greatest bang for your buck.] Words: 785
So says Larry Edelson (www.uncommonwisdomdaily.com) in edited excerpts from his original article*.
Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has edited the article below for length and clarity – see Editor’s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.
Edelson goes on to say, in part:
Nearly $4 trillion of money printed by the U.S. Federal Reserve, the European Central Bank, the Bank of Japan and the Bank of England money is sloshing around the global banking system. It was designed to bail out the commercial banks, which it did, but it’s still in their coffers because loan demand is still soft. When they do start lending, however, all that money is likely to run rampant through the global economy.[All the central banks]…are largely following Ben Bernanke’s lead…in the belief that when the time comes, they can reel excess liquidity back in, and prevent it from running rampant through the global economy, thereby snuffing out the next inflation surge but, in my opinion, there’s no way the central bankers are going to be able to reel that money back in, for two chief reasons:
- Once the banks start to see an increase in loan demand…they’re going to use it to make a slew of new loans — which is how banks make most of their profits.
- Also, believe it or not, the central banks don’t understand interest rates. They think that they can raise rates at the appropriate time and that higher rates will quell loan demand, thereby pulling liquidity out of the system. That might be true in a more normal economy, but in today’s economy, it’s totally backward. Because rates are so low to begin with that, as rates rise, it will likely have the opposite impact: investors and consumers will begin to realize that rates are going up and they are then going to want to buy more, borrow more and invest more.
The above means that the $4 trillion the central banks printed will run like crazy through the global economy, pushing up overall price levels.
[In fact,], forget reeling in the $4 trillion the central banks have already printed, they are about to print a heck of a lot more! There’s no question that’s coming. Just look at what’s happening.
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- Britain is now officially back in a recession.
- France’s economy is slumping.
- Spain’s economy is toast, in a depression.
- Portugal’s economy is collapsing again.
- Even Germany’s economy is starting to slow.
- Japan started another round of quantitative easing printing another $68 billion.
- In the U.S. where we will have miserable unemployment, where it appears real estate is softening again, and where we have elections in just six months, the status quo in Washington will do just about anything to keep their jobs, including putting pressure on the Fed to print more money.
There’s no question in my mind that:
- another inflationary surge will start no later than September.
- the sectors that will be impacted the most will be commodities, tangible assets and natural resources.
- the best way to protect the value of your money and make some of the biggest profits you’ll ever see in your lifetime will be to invest in the natural resource sector.
When this next phase begins, it will be a doozy. The price rises we will see in commodities — and in inflation — will be the biggest yet. In the 1970s, the Fed only printed one-sixth as much money as it has in the past four years. Today, however, you have access to specialized investment vehicles designed to deliver far-greater profits than anything that was available in the ‘70s; vehicles that could hand you truly massive profits on every $1 move in gold, silver, oil and other tangible assets!
*http://www.uncommonwisdomdaily.com/the-next-inflation-surge-is-closer-than-you-might-think-14179 (To access the article please copy the URL and paste it into your browser.)
Editor’s Note: The above article may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.
How this economic disaster ends is something about which many of us speculate. Two extreme endings are likely — a sudden deflationary collapse or a period of very high inflation/hyperinflation which ultimately cripples commerce and resolves itself in a deflationary collapse. In either case, the deflationary collapse is another Great Depression. It is important to know which route will occur because of what will happen to asset values along the way. Words: 1057
There is an all out assault on the part of global central banks to destroy their currencies in an effort to allow their respective governments to continue the practice of running humongous deficits. In fact, the developed world’s central bankers are faced with the choice of either massively monetizing Sovereign debt or to sit back and watch a deflationary depression crush global growth. Since they have so blatantly chosen to ignite inflation, it would be wise to own the correct hedges against your burning paper currencies
This analyst sees the perfect storm of converging criteria almost perfectly timed and aligned with the 2012 election cycle. When the moment arrives, the financial earthquake will rapidly demolish the existing highly precarious financial system. Government will stand by helpless, unable to shield itself, much less its vulnerable citizens or private financial institutions from the tsunami of debt and currency destruction. 2012 is shaping up to be the blockbuster main event of the ongoing financial crisis. Massive amounts of new debt, vast quantities of additional digital dollars and the spark of higher interest rates will set off version 2.0 of the credit-driven financial implosion. Let me explain. Words: 1443
Currency wars arise when a country steals growth from trading partners by cheapening its currency to promote exports. The new currency war began in 2010 when President Obama declared in his State of the Union address that it was the policy of the United States to double exports in five years. Since the U.S. would not become twice as productive in five years, the implication was the U.S. would severely cheapen its currency to achieve this goal. [Let me expand upon this.] Words: 666
Money/credit expansion (inflation) is insidious and like an addictive drug. The first effects appear to be pleasant – a seeming increase, if not boom, in business; lower interest rates; more available credit and a decline in unemployment – BUT, unless the monetary stimulus is continued, and probably at increasingly higher doses, the temporary high disappears. Below is a sampling of what eventually happens when central bankers try to ‘help’ the economy by creating money out of nothing. Words: 799
Whether our current economic crisis will end with massive inflation or in a deflationary spiral (ultimately, either one results in a Depression) is more than an academic one. It is the single most important variable for near and intermediate term investing success. It is also important in regard to taking actions which can prepare and protect you and your family. [Here is my assessment of what the future outcome will likely be and why.] Words: 1441
Daniel Thornton, an economist at the Federal Reserve Bank of St. Louis, argues that the Fed’s policy of providing liquidity has “enormous potential to increase the money supply,” resulting in what The Wall Street Journal’s Real Time Economics blog calls “an inflation inferno.” [Personally,] I think it’s too soon to make significant changes to a portfolio based on inflation fears. Here’s why. Words: 550
The developed economies of the world have opened the money spigots…[and this] massive money and credit creation is sitting in the banking system like dry tinder just waiting for a spark to set it ablaze. How quickly it happens is anyone’s guess, but once it does we are likely to be enveloped in a worldwide inflation unlike anything before ever witnessed. [Let me explain further.] Words: 625
Evidence shows that the U.S. money supply trend is in the early stages of hyperbolic growth coupled with a similar move in the price of gold. All sign point to a further escalation of money-printing in 2012…followed by unexpected and accelerating price inflation, followed by a rise in nominal interest rates that will bring a sovereign debt crisis for the U. S. dollar with it as the cost of borrowing for the government escalates…[Let me show you the evidence.] Words: 660
It is an old saying that the “road to hell is paved with good intentions”. Well, in recent years, that road has been changed to a super-highway! America was put on that super-highway a few years ago and right now we are traveling at break-neck speed toward the financial abyss. Words: 1132