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16 Nov 11 15:25
Date Joined: 03 Feb 05
| Topic/replies: 6,745 | Blogger: Menelaus's blog
Since our forum village idiot keeps harping about "hyperinflation", which he continues to confuse with high inflation, I thought I would do a separate post to further explain how hyperinflation manifests itself to anyone who can fog a mirror.

I have posted frequently the opinion "hyperinflation, this is how this ends". Unfortunately the empty cranium kangaroo misinterpreted that to mean "hyperinflation, this is how it ends TOMORROW".

The FED (the only central bank that counts - the rest are noise - think global reserve currency) has lowered rates to zero and have printed, and continues to print, in an attempt to "fix" the fiscal side. The truth is their only interest is maintaining the solvency of the banking system and funding the massive USG deficits. All the newly created cheap money that ends up in the hands of the banks through swapping for garbage ends up in commodity speculation which drives prices up. Combine this with currency debasement through expanding the money supply and the job is done. This inherently manifests into inflation which they of course deny.  Higher inflation in a deleveraging economy damages further the economy and slows it down even more (higher cost inputs). As the economy deteriorates further and unemployment rises (that's what we are seeing now) Keynesian politicians start screaming louder to spend more, to keep the wheels of the economy spinning so to speak. The central bank responds by printing more, after all they have to, not because politicians demand it or that they care about unemployment but the deflation that shows up on bank balance sheets (debts that can not be repaid) needs to be covered up otherwise the banking system collapses. And they print more because there is no other way to fill the gap - no organic growth. Which in turn drives commodity prices up...........and the vicious cycle of destruction continues until one fine morning the currency breaks - those who have it want to get rid of it as quickly as possible, those who don't have it won't accept it - complete loss of confidence which is what hyperinflation is NOT high inflation.

Gawd, this idiot is starting to bore me.  Cry
Pause Switch to Standard View How hyperinflation begins.......
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Report FINE AS FROG HAIR November 16, 2011 7:38 PM GMT
And of course the powers in charge are fully aware of all this and are criminally ignoring it for their own selfish interests.
Give us a break.
Report FINE AS FROG HAIR November 16, 2011 7:45 PM GMT
Btw on the point of self interest, you do realize that if the above scenario evolves there would probably be some sort of worlwide insurrection from the lower level up, with all those at or near the top getting their heads chopped off ( or lined up against a wall these days).
So the likes of Menelaus had better perhaps sincerely hope they're wrong or start to put things right.
I don't think one would like to be living and/or working in Mayfair for a boutique investment bank ( as Menelaus purportedly does) if all that sort of hell breaks lose.
No amount of personal gold would probably save you.
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