Economists: Gloom and Doom Ahead, Especially in US


 More than 400 US Banks Will Fail: Roubini


Recent Problems in the Dutch Pension Sector


International Forecaster September 2010 (#2) - Gold, Silver, Economy + More

By: Bob Chapman, The International Forecaster - 6 September, 2010 In a futile attempt to keep the economic and financial system afloat, QE2 is underway. It began in early June as banks changed the rules for awarding loans. There efforts over the past few months have only met with moderate success. Banks had cut back lending by some 25% over the past 16 months mainly to small and medium-sized companies. Full Story

Reality Economics

By: Llewellyn H. Rockwell, Jr. - 6 September, 2010 As a culture, we like our reality on television, but seem to oppose it in economics. For more than two years now, and even longer depending on your dating scheme, the federal government has waged war on the reality of the incredible Fed-fueled bubble that developed in housing with spillover effects on the rest of economic life. Full Story

How Gold-As-Money Can Prevent Mob Rule

By: Richard Daughty, The Mogambo Guru - 6 September, 2010 Ellen Kelleher, writing for The Financial Times, opens her article with how Baird & Co., in their warehouses in London, purify gold by heating it to molten form to make “medallions, bars, and rings,” which sounds like a lot of heavy, hot, back-breaking, dangerous work to me, as if the word “work” was not bad enough by itself with the terrifying adjectives. Full Story

Robert Wiedemer: With Head in the Clouds, Fed Ignores Inflation Mountain At the annual Federal Reserve conference in Jackson Hole, Wyo., Fed Chairman Ben Bernnanke essentially said that he will do whatever it takes to keep the economy from declining. Since the main power Mr. Bernanke has is to print money, most people read his comments to mean that he will print money as necessary to keep down unemployment and encourage higher economic growth . . . get the full story, click here.

Little Growth Means Big Trouble

Hyperinflation vs. Inflation: Understand the Difference

www.silver-coin-investor.com

Hyperinflation and inflation may share the same root, but they're two entirely different trees.  While many assume that hyperinflation is just inflation's oversized cousin, there is much more to hyperinflation than most are aware.

The Basics of Inflation

Investors, traders, and average Joes alike should all have a firm understanding of inflation through rudimentary economics studies.  Inflation is nothing more than an increase in the money supply that leads to changes in aggregated demand and ultimately higher prices for goods.  Increases in prices during inflation are certain, and they tend to happen over a period of years or decades, rather than months or days. 

Most commonly, inflation does not appear until eighteen months after monetary policy adjustments, as businesses rework prices to increase their market share of the aggregate demand for products.

The Basics of Hyperinflation

Hyperinflation shares some links with inflation in that the value of the currency is decreased, but at a much faster rate.  In a hyperinflationary scenario, decreases in the value of money result from two conditions: perpetual increases in the total money supply and a decrease in confidence in the currency.  The latter is the 800 pound gorilla in the room. 

When a population loses faith in a currency, it does so quickly, like all bubbles do when they eventually pop.  As we saw in the Weimar Republic, Reichsmarks fell in value by two-thirds in under a month, and by the next month, they had lost another two-thirds.  In just two months, purchasing power plunged by more than 88%.  You would have to be a fool to think the depreciation stopped there. 

Businesses lost so much faith in the currency that they posted higher and higher prices as a way to turn customers away.  Why sell today when the currency will be worthless tomorrow?  All told, in just over six months in 1922, the Reichsmark plunged more than 99%.  After two years, at the end of 1923, the Reichsmark was worth 1/15,000,000 of its 1922 value.

Hyperinflation Looms

For the Fed and the US economy, you really do reap what you sow.  The seeds of hyperinflation have been planted wide and deep, and nothing short of a perfect storm of monetary policy and fiscal policy reductions can stem the tide.  If history is any indication, the US dollar will follow in the footsteps of every fiat currency before it, losing piece by piece every year until finally all confidence is lost.

As to when hyperinflation begins, it is anyone's best guess.  However, we can be sure that it will happen quickly and without warning.  The best hedge still exists in gold and silver, with silver being the best alternative to paper money when the dollar eventually meets its demise.  Its ease of use, anonymity, and the wide array of different denominations, including one ounce rounds, pre-1964 silver dimes, and large bars, make it a perfect crisis currency.  Stock up because today's $19 per ounce price for physical silver will look like a going out of business sale when the dollar does “go out of business.”

Dr. Jeff Lewis

 

"Pending Home Sales Reconfirm The Housing Market is Crashing".  The article is a must read... and the graph is a stunner... and the link is here.

The second real estate-related story will bring a smile to your face, dear reader.  It appears that JPMorgan's top guy is having some trouble selling his chicken shack in the Windy City.  The headline reads "Jamie Dimon Slashes His Chicago Mansion Down To Half Price".  There's a nice slide show of the place as well... and you can check it all out here.



"China fears depreciation of $2.45 trillion of reserves still heavy in dollars".  This piece is definitely worth your time... and the link is here. 



"EU austerity policies risk civil war in Greece, warns top German economist Dr Sinn".  This rather short piece is a must read... and the link is here. 


"Islamic gold dinar gains ground in Malaysia: official".  Umar Ibrahim Vadillo, chief executive officer with Kelantan Golden Trade, said the first batch of gold and silver coins worth two million ringgit (625,000 dollars) had been sold out in less than a month.  "There is enormous response in Malaysia. Their reaction is unbelievable," he told reporters.  The link is here.

Obama Must Create 230,000 Jobs A Month Until The End Of His Second Term For Return To Breakeven - Charting The New "7 Year Itch" Normal

 

Unemployment Rate Rises to 9.6%. That is the official figure from the BLS. But the really telling number is for under-employment. That is buried down in line U-6 in Table A-15. Alternative measures of labor underutilization. And again, that is the official figure. A 2004 article suggested that the real world numbers are probably substantially higher. (Somehow I doubt that this under-reporting has been rectified.)

 

Fears Growing Over Global Food Supply


Bernanke: Shut down banks if they threaten system 120 Days to Go Until the Largest Tax Hikes in History. 


Global Collapse of the Fiat Money System: Too-Big-To-Fail Global Banks Will Collapse Between Now and First Quarter 2011


Complete List of Bank Failures


Where The Banks are Failing


Investors Bracing for Dreaded "September Effect"