shadowstats "congress starts early stages of hyperinflation"

[Large Sarge]

https://www.youtube.com/watch?v=eB4huOTkBwY&feature=player_embedded

[madfranks]

Congress can't initiate hyperinflation, because they don't control monetary policy. The possibility of hyperinflation right now is a burden the Federal Reserve is carrying, and until Congress nationalizes the Fed, they can't "start" hyperinflation.

[iOWNme]

I have said this many times,.....There wont be hyperinflation! Because of a little thing called COMPUTERS.

The Fed can create credit until the end of time, but if that credit is not put into circulation via money printing, we will never see a Weimar style scenario here. True the debt has been increased by Trillions, and all of your children will be told they must pay, but thats not hyperinflation.

If we were even close to hyperinflation MOST people would have dollars falling out of their pockets......And thats just not the case.

[Carl]

I agree 100% with Sui Juris's statement.

[jimswift]

Elastic Currency = whatever they say it's worth


...now back to work, citizen! [P]

[Hatha Sunahara]

I think Sui Juris is right too. What we are more likely to see in the near future is a dramatic crash in the bond market. There is a Treasury Auction on April 10 for 10 year T Bonds. If demand for those bonds is low-and likely it will be because The Foreigners who have money don't want those bonds, then the interest rates will have to go up. That means bond prices will go down, and there will be a massive shift of money out of bonds and into either stocks or physical gold. That will crash the bond market. It will likely also kill the dollar--which will have to be devalued. Prices for everything imported, which is most stuff, will go up accordingly. The government will not be able to meet its obligations, and people on welfare and food stamps will be cut off, and they will riot as soon as they get hungry. 1 in 6 people are on food stamps.

We won't have hyperinfllation because the banksters are intent on impoverishing us and creating maximum disorder, so they can kill the dollar and replace it with a global currency. Take a look at this:


http://canadafreepress.com/index.php/article/54163


Hatha

[Carl]

Let me make a counter intuitive point here: Credit neither increases nor decreases in value, you either have it or you don't.

Credit's existence is based solely upon the value of the assets that back it, and credit as currency remains viable only for as long as the institutions that maintain its existence remains solvent and functional, and that is totally dependant upon the value of the assets as well.

Credit is DENOMINATED in Dollars, it is not Dollars. Credit has no legal status as a currency at all.

[Silver Rocket Bitches!]

I think a realistic scenario for hyperinflation is the dollar being dropped as the reserve currency. Once that happens, there will be nowhere else to spend those dollars around the globe except within the US. Limited goods being chased by a huge influx of currency is a recipe for disaster.

[Golden]

The entire world's monetary system is based on credit and backed by the full faith of market participants. Alot of economic behaivor is a simple confidence trick and is done out of ritual. The top would have the bottom believe whatever is necessary to further their gains. But, you don't have to take my word for it. It's everywhere to be witnessed because truth doesn't need belief.

[jimswift]

http://canadafreepress.com/index.php/article/54163


Hatha



It is important to note the specificity of the word “kill.” Stated in the active voice, it means an unambiguously intentional and deliberate act. The murder of our national currency, the United States Dollar (USD), is the ultimate agenda to be implemented under Obama. To “kill” our national currency will subvert the United States and destroy it from within. This begs a number of questions, including what type of Americans would actually have, as their objective, the destruction of our national currency? To whom do they hold their allegiance, if not to the American people whose life’s work as well as the toil of our ancestors is represented in the form of wealth held in U.S. dollars? Does this make any sense to us, as Americans? The answer of course is “no.”


By its very definition, to kill our national currency is an act of high treason by those engaged in this activity. It undermines the very sovereignty and survival of our nation, and will have a life-changing impact on every citizen in the U.S. It will also impact every nation and the people of every nation on the planet, as the USD is presently the world’s reserve currency. It is an act that should result in the filing of criminal charges against the conspirators, a trial of their peers and if convicted, a death sentence. It’s that serious.


yet....

[madfranks]

I think Sui Juris is right too. What we are more likely to see in the near future is a dramatic crash in the bond market. There is a Treasury Auction on April 10 for 10 year T Bonds. If demand for those bonds is low-and likely it will be because The Foreigners who have money don't want those bonds, then the interest rates will have to go up. That means bond prices will go down, and there will be a massive shift of money out of bonds and into either stocks or physical gold. That will crash the bond market. It will likely also kill the dollar--which will have to be devalued. Prices for everything imported, which is most stuff, will go up accordingly. The government will not be able to meet its obligations, and people on welfare and food stamps will be cut off, and they will riot as soon as they get hungry. 1 in 6 people are on food stamps.

Read my post above. Interest rates only group if the Fed refuses to purchase them with newly created money to keep rates down. If the Fed refuses to fulfill its duty as lender of last resort, congress may see fit to nationalize the central bank and simply issue tons of new money to cover the spending.

[Golden]

Read my post above. Interest rates only group if the Fed refuses to purchase them with newly created money to keep rates down. If the Fed refuses to fulfill its duty as lender of last resort, congress may see fit to nationalize the central bank and simply issue tons of new money to cover the spending.

Yeah, and we both know that Congress will never nationalize the central bank. Seriously, that's hilarious!

[SWRichmond]

So the pseudo-intellectuals at GIM have decided that there will be no hyperinflation, and they state such, as they state most things, with great authority but little else. And in so doing they side with the Keynesians, calling their own lineage into question.

All that is required for inflation to occur is the creation of "money" out of thin air. The Fed has created $2.1 Trillion new dollars, starting from a base of $0.8 Trillion. If this were not inflationary, they would create $1,000,000.00 for each and every one of us on planet Earth and no one would ever have to work again, right? http://research.stlouisfed.org/fred2/graph/?s[1][id]=AMBNS

Credit is NOT money, and it suits the Keynesians' case to conflate the two. They make the case that new money creation is not inflationary because all they are doing is creating money to replace the credit that has been destroyed. But they know they are lying to us, otherwise they would do as I described above: create enough money to make us all millionaires, and then we could all just live happily ever after. But it is transparently clear that the Fed is monetizing the U.S. deficit: $85 Billion per month = $1,020 Billion per year.

So the next argument is: Is there inflation, and what is hyperinflation? Everyone here knows that there is inflation, and that the government's accounting for it has been repeatedly skewed over the decades to make it seem that inflation is lower than it really is, just as with unemployment, etc. Does anyone wish to argue this?

So we are left with: what is HYPERinflation? Hyperinflation IMO is inflation that is out of control and that which destroys the lifestyles and savings of the average person, by destroying the buying power of their "money". Are we there yet? Hmmmmm. Do we have high inflation now? Undeniably yes. Is it out of control? Perhaps not yet.

So, what are the paths forward?

Bond crisis: Does anyone argue that a bond crisis in the reserve currency would destroy it? If so, please make your case. Who among our "leaders" will decide to stop spending money?

Renewed / Second bank crisis: Does anyone argue that the Fed will not step in again as "Counterfeiter of last resort"?

Economic Recovery: Does anyone argue that there is an actual recovery?

Currency Wars: What is the endgame of currency wars? SHOOTING WARS. And where will the US get the money for new wars?

[messianicdruid]

And where will the US get the money for new wars?

Sell more hopium?

[madfranks]

Yeah, and we both know that Congress will never nationalize the central bank. Seriously, that's hilarious!

Think about it. The Fed has a great conflict of interest that will soon manifest when it's obligations to the banks clash with it's obligations to Congress. Bond rates don't have to go up as long as the Fed provides an endless supply of cheap new money to buy them all. But as SWRichmond acutely observed above, creating over a trillion dollars of new out-of-thin-air money every year will result in inflation. Inflation benefits debtors, but is bad for creditors. Who are the largest creditors? The too-big-to-fail banks who make up the banking cartel that the Fed protects. If inflation starts threatening bank loans en masse, what will the Fed do? Will they protect the banks and stop buying gov't bonds, stop creating money out of thin air and let interest rates rise? Or will they say "screw you" to the banks, and keep creating trillions of dollars out of nothing to fund the gov't and maintain 0% interest rates? A time will come when they will have to make that choice. And believe me, if the Fed cuts off the government's cheap & easy money to allow interest rates to go up, once the pain starts to be felt (reduced welfare, reduced medicare, reduced social security), the people will shout to do something, and Congress may very well tell the fed to keep the cheap money spigot on, and if they refuse, why wouldn't Congress nationalize the central bank?

[Hatha Sunahara]

Thank you Madfranks. you nailed down the choices for the Fed. One thing that has them really worried and scared is the bazillions of dollars of CDS and other derivatives that the banks are liable for. The ones invented by Blythe Masters. Warren Buffett called them weapons of mass destruction. I would change that description a bit by calling them demolition charges. Like what brought down the WTC towers (if it wasn't a nuclear device in the ground below the sub-basements). And these demolition charges are everywhere in the financial system. They are basically insurance policies against default on debt. So, if one loan somewhere, like maybe in Cyprus defaults, there may be a dozen CDS covering that loan. Those obligations will become due. It's like an employee died and some corporation that was insuring him now gets to collect the insurance money. But suppose six corporations were insuring that poor dude? The insurance company would have a huge payout. Well, think about the loans to Cyprus, or Greece or Spain, or Italy, or any other loan the banks made, and how much money the bank would be liable for if any one of those loans were to default. They might be liable for a dozen, maybe even 100 times the amount of the defaulted loan. Any default, even the smallest might bring down one of those big banks. And those banks have liabilities to other big banks, and it is likely that those other big banks would go down too, crashing the whole financial system. It's like the system was wired up like a building to be demolished, and there were a huge number of points where fuses could be lit, and since all of those fuses were interconnected, if any single fuse got lit, the demolition would start. That is why the big banks and the Fed are so worried about anybody defaulting. They rigged up the system so that they could make obscene profits from speculating on 'bets' disguised as insurance policies, and if anything went wrong, and caused them to fail, then the whole system would explode, and there would be no money anywhere, and the world would be in a huge mess. That is why they are Too Big To Fail. That is why Bernanke is willing to do anything to keep any one of those fuses from being lit. That is what QE is all about. The Fed is willing to inflate the dollar to infinity to keep the banks from self destructing because of one default of a loan underlying a mountain of derivatives. But there are limits to how much he can inflate. If the dollar becomes too worthless, other countries that loaned the US Government money will want to get rid of their dollars, and the dollar won't be the world's reserve currency any more. And that is exactly what is happening right now.

We won't get hyperinflation. We will get a dollar collapse first. That will come as as a sudden devaluation of the dollar. All our savings will be worth one half or less. Prices for everything will shoot up, and nobody will have enough money to buy what they could buy before the devaluation. And since the economy is shot to hell from exporting all the jobs, there won't be any recovery on the horizon. It will be an extended stagflation that will be semi-permanent. This is what Bernanke is facing. This is what we are all facing, only they are too worried to tell us because they think if we knew, we would all panic and that itself would light all the fuses.

The summary can be stated in two words. We're Fucked.


Hatha

[Carl]

SWRichmond is wrong in his assessment because his entire argument is predicated upon conflating CREDIT, and obligation to pay, with FIAT MONEY, payment.

Since Aug. 2007, the Fed has added about 380 billion FRNs to the actual money supply for a grand total of 1.08 trillion in circulation, over half of that is held overseas. Not even close to hyperinflation driving levels. And hyperinflation, is always, a monetary event. Not Credit, Monetary.

The Fed has added about 16 trillion psuedo-obligations to the system. I say "pseudo-obligations" because they will never be paid by the Fed, but they will spend the next few generations trying to collect from us for the debts they created.

Can anyone tell me the difference between a Fed created digital credit and any other bank created digital credit?

There is none. It's not base money, it's promise/assumption that base money will be paid.

The Fed creating digital promises to pay does not expand the base money supply, it just expands the debt!

Credit, even when it is used or held as a currency, IS NOT AN ASSET, it is, and will always be, A LIABILITY.

There is no "Currency Wars" going on as all the nations that are expanding debt are doing so to create the credit needed just to keep their systems going.

They aren't trying to screw each other, they're working together to screw us! (Us = all people of westernized civilization.)

This is going to end just like it did in 1929/30's, with the total, global collapse of credit as currency. You'll just wake up one morning and it will all be gone.

[Carl]

Is my argument really that hard to grasp?

Credit derives its existence from the value of the dollar, if the value of the dollar collapses, what happens to credit?

Everyone appears to believe that if the value of the dollar collapses, you get more dollar based credit.....go figure....

[madfranks]

Is my argument really that hard to grasp?

Credit derives its existence from the value of the dollar, if the value of the dollar collapses, what happens to credit?

The dollar actually derives its existence from the value of credit (the full faith and credit of the united states), and if the credit goes away/collapses (i.e. they stop lending newly created money), what happens to the dollar?

[Carl]

The dollar actually derives its existence from the value of credit (the full faith and credit of the united states), and if the credit goes away/collapses (i.e. they stop lending newly created money), what happens to the dollar?Pay attention:

The Fed is not lending newly created money!

And there is absolutely no evidence anywhere to support that claim.

But I suppose that's the kind of thinking which led people to believe that gold's value is derived from the dollars it is priced in.

The government does not issue dollars as a representation of their credit, they issue Treasuries DENOMINATED in dollars, which are controlled and issued by the Fed. Dollars are the source of credit, not the government, which is the source of debt DENOMINATED in dollars.

The existence of dollars (FRNs) are not dependant upon the credit of anyone, they will continue to exist regardless of anyone's debt status, default or otherwise.

Credit has no value, it either exists or it doesn't. How many Icelands, Irelands, Spains, Greeces, Cypruses, etc. do you need to witness before that fact is grasped? And what did almost everyone go running to when their nation's banks and credit collapsed? Cash. And what wasn't available to them? Cash.

The oversupply of bankster credit affects the value of the under-supply of dollars simply because people continue to equate them as being the same thing. And the continuous flood of propaganda in that vein is meant to support that belief because, that belief allows the banksters to keep creating credit denominated in dollars and gives the banksters a place to point their fingers, an easy out, when their system of credit collapses.

There is no oversupply of dollars driving its value down as there are only 1.08 trillion of them in circulating existence.

Capital Controls is just a means to keep their credit system functioning and people producing and paying on their debt, so that they can maintain their grasp upon the capital assets that they stole with their system of credit.

[madfranks]

Pay attention:

The Fed is not lending newly created money!

So when the Fed bought $600 billion of US Treasuries in a previous QE (Fed to Buy $600 Billion in Treasuries (http://online.wsj.com/article/SB10001424052748703506904575592471354774194.html)) , tell me where they got that $600 billion from. It came out of nowhere (they created it) to buy government Treasuries. When you buy a treasury you are loaning the government money which it is obligated to repay.

There must be some sort of semantic mis-understanding going on here. I don't see how you can say the fed isn't loaning out new money.

[Carl]

So when the Fed bought $600 billion of US Treasuries in a previous QE (Fed to Buy $600 Billion in Treasuries (http://online.wsj.com/article/SB10001424052748703506904575592471354774194.html)) , tell me where they got that $600 billion from. It came out of nowhere (they created it) to buy government Treasuries. When you buy a treasury you are loaning the government money which it is obligated to repay.

There must be some sort of semantic mis-understanding going on here. I don't see how you can say the fed isn't loaning out new money.
The Fed got the credit to buy the Treasuries the same way your bank got the credit to loan you to buy a car, they created it, with no money or FRNs involved in the transaction. The Treasury's account was simply credited with the amount.

Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."

This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor.

Credit has no legal status as money but all debts incurred through its use are legally binding.

That's why debts remain after credit goes "POOF!". You want more credit, they you're gonna have to come up with more capital.

*Oh and if that's not clear enough:

Credit Is Not Money.

[SWRichmond]

We won't get hyperinflation. We will get a dollar collapse first. That will come as as a sudden devaluation of the dollar. All our savings will be worth one half or less. Prices for everything will shoot up, and nobody will have enough money to buy what they could buy before the devaluation. Hatha

And a dollar collapse is somehow different from hyperinflation? You are saying that, if it happens all at once, it isn't hyperinflation?

[Carl]

SWRichmond must have me on ignore....

[jimswift]

swrichmond must have me on ignore....

thats too funny

[Carl]

All people have to do is google "U.S. money in circulation" and the very first response should be from the FRB with a total of 1.18 trillion. They include U.S. coin and notes in their total.



Now, I figure that if the FRB knows the difference between credit and money then we ought to pay attention to that difference as well.

[Sparky]

...
So we are left with: what is HYPERinflation? Hyperinflation IMO is inflation that is out of control and that which destroys the lifestyles and savings of the average person, by destroying the buying power of their "money". Are we there yet? Hmmmmm. Do we have high inflation now? Undeniably yes. Is it out of control? Perhaps not yet.
...
The problem with this definition is that it is too subjective. The other problem is that inflation also destroys the lifestyles and savings of the average person. Where is the line between inflation and hyperinflation?

Here's a simpler question that will help me understand your definition: Did we have hyperinflation in the 1970's?

[Sparky]

...
Credit Is Not Money.

Though credit is not money, it can create price inflation. The price of housing went up at an extraordinary pace until 2006, based entirely on credit. There was no money involved.

[Sparky]

Read my post above. Interest rates only group if the Fed refuses to purchase them with newly created money to keep rates down.
...
This is very important. The Fed now buys 90% of bonds in the market. It doesn't really matter at all if foreigners show up at the Treasury auction on April 10.

The bond market will ultimately experience a devastating collapse. But this is not right around the corner. This can't happen until after the massive US bond-buying spree associated with the collapse of the Euro and the Yen has taken place. After that it will collapse.

So if you read the tea leaves, I think this is the sequence that is the most self-consistent when taking into account the relationship between assets:

1) Stock market "crash" (I think this means Dow 8,500, but it could mean 10,000 or 5,000)
2a) Yen collapse
2b) Euro collapse
3a) US bond collapse
3b) Generational bubble top in precious metals prices
4) Initiation of new stock market secular bull

[Carl]

Though credit is not money, it can create price inflation. The price of housing went up at an extraordinary pace until 2006, based entirely on credit. There was no money involved. Credit will continue to cause inflation until it is no longer accepted as payment and ceases to exist. Keeping credit alive works to the advantage of banks and Wall Street, which runs entirely on credit as currency.

To have hyperinflation with credit, all assets that back credit will have to hyperinflate in value. Does anyone see that happening in the bond markets or to the dollar?

[madfranks]

Credit will continue to cause inflation until it is no longer accepted as payment and ceases to exist. Keeping credit alive works to the advantage of banks and Wall Street, which runs entirely on credit as currency.

To have hyperinflation with credit, all assets that back credit will have to hyperinflate in value. Does anyone see that happening in the bond markets or to the dollar?

I foresee a possible future scenario whereby, if the Fed fails to keep buying gov't debt, Congress will either have to default and rein in spending, or nationalize the central bank and begin issuing money without credit. Like sparky mentioned above, right now the Fed purchases around 90% of all new government debt. They are the "lender of last resort". What happens when the Fed decides it's time to implement their "exit strategy" and stop? Will Congress accept that, shrug their shoulders, and cut spending by 90%? In this scenario I see it very likely that Congress might simply take over the Fed and nationalize it as part of the Treasury. Then they won't have to print bonds, they will simply print new money to meet expenses. Instead of "federal reserve notes", we'll see "United states notes" make a comeback. Congress has shown a remarkable ability to kick the can down the road. If the choice is between defaulting or nationalizing the central bank and printing money, what do you think they'll do?

[Sparky]

Madfranks, they will never have to make this choice, because Congress and the Fed are both controlled by the same mega-corporations, so the two entities will never be in conflict. The Fed and Congress don't decide anything, they take orders. The Fed will continue to buy bonds until such time as their rulers have positioned themselves to benefit from a massive bond failure. I presume that they will have largely re-allocated into hard assets by that point. Then they will pull the plug on bonds.

[Hatha Sunahara]

The Fed is playing what Sinclair calls MOPE. Management of Perception Economics. I read a very credible explanation by Paul Craig Roberts of what the fed faces. He says that"


You can’t print money in the face of a falling currency. You will just make the panic worse.... “So the fallback position when they can’t print money is to grab bank deposits. And not just bank deposits but also pensions. They will grab both.”

Roberts says more, here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/4/4_Former_US_Treasury_Official_-_The_Fed_Is_Facing_A_Wipeout.html



Hatha

[mick silver]

i know one thing for sure every time i go and buy lumber the prices have went up . stuff i was getting last year was 6 bucks this year it 13 bucks what do you call that . i know the new housing is not doing this because around here there not building new homes with all the foreclosure that are still on the market . so tell me why every time me an the wife go to the food store everthing is up more and the size is smaller . they are taking the money from us all with higher prices . and wages are not going up . there more then one way to inflation
ps the feds will be the buyer of the bonds , have they not been for the last few years . like i said there more then one way to steal from us all

[Hitch]

Amen mick well said. I haven't had a raise in 4 years. All I see is prices going up, but my wages are not.

It's theft, it is by design, and it's a transfer of wealth from the working folks to the big bankers. They will keep this game going, as long as we continue to play.

[madfranks]

Madfranks, they will never have to make this choice, because Congress and the Fed are both controlled by the same mega-corporations, so the two entities will never be in conflict. The Fed and Congress don't decide anything, they take orders. The Fed will continue to buy bonds until such time as their rulers have positioned themselves to benefit from a massive bond failure. I presume that they will have largely re-allocated into hard assets by that point. Then they will pull the plug on bonds.

See, that's what I'm not so sure of. Congress wants unlimited money to spend on everything they want to do, but the big banks want their principal and interest to make them a profit. Inflation will not allow both of these things to happen, only one. So who does the Fed hold ultimate alliance to? The too big to fail banks, or the government?