Bob Chapman, of The International Forecaster says The Fed [is] At The Heart Of Control Of Our Country and he warns that things are getting worse, much worse.
The geniuses, the masters of the universe, have a broken system. This time the system they have deliberately destroyed cannot be resurrected.
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Most analysts try to figure out what others within the financial and economic sphere are doing. Unfortunately they are burdened by playing within the system. They cannot see what is really going on because for one reason or another they are forced to frame their results within the inner sanctum of the Illuminists. This is the cover that is used for deliberately destroying nations. These ideas cannot simply be avoided. You would think reading history that all these brilliant people wouldn’t be deceived, but they have been. Every time, what they are doing has been tried, has been a failure. Deliberate collapses, destroyed currencies, social chaos and revolution. During the French Revolution 300,000 people such as these lost their heads. Perhaps this time it will be 3 million. Inflation can only be controlled by deflation and deflation is totally uncontrollable. Misguided isn’t the word for it. Smug and arrogant they’ll again be proven wrong and unfortunately we will all pay a terrible price.
The progenitors of this false economic policy, Keynesianism, have brought the distortion of price mechanisms, created unlimited opportunities for speculation and they have thrown all discipline to the wind. This is the basis for our current Federal Reserve System, which is the engine for such a philosophy. As a result of this policy we will be entering hyperinflation next year and the dollar will continue to fall in value.
[emphasis added]
It doesn’t take a rocket scientist to see what most economists can’t. The system is certainly broken, and while we can argue about deflation and inflation right now, the longer-term effect will likely be a total collapse of the US Dollar and its replacement as the sole reserve currency of the world.
This is bad news for Americans, who may initially think that it is a good thing that their home prices and 401k portfolios are up 50%, until they realize their currency has lost 75% of its value.
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Next year? I question the timing, but if it does start next year, then it’s going to get mighty ugly, mighty fast.
Over 7 months and everything is up, up, up. Doesn’t matter what it is. Oil, stocks, gold/silver, commodities, everything keeps going up.
I have been waiting for some kind of a pull-back or crash like everyone else and at this point I just don’t see it. There seems to be money oozing from the walls to throw at any problem out there.
Perhaps Bob is onto something.
Question, would we even be able to recognize hyperinflation when it starts? Doesn’t seem so obvious at first, barring any immediate currency crisis (which I still think hold onto as the more likely income rather than continual price increases due to money printing).
I am with you on the currency crisis forecast.. money printing is an issue, of course, but there is much more at play here, namely the world looking at the US as a dead-beat debtor. Even if we didn’t print any money, and the rest of the world decided to sell dollars, we’d have a serious collapse in the USD.
In the last several months we’ve posted many a story about stock markets being overbought, corrections being due, and even calls for market collapse. None of this, obviously, has happened. Perhaps Marc Faber was right… that any weakness will initiate more bailouts, stimulus and QE. They can print these stock markets to the moon, I suppose. Of course, that would kill the dollar, but do the Fed, Congress, Treasury, and President even care?
I am still a stock market bear for now, because according to the ‘official’ numbers, there is no inflation to be seen anywhere, hence the reasons for the low fed interest rates…. but there is always the off chance that we will never have a stock market crash again… hahah… I know, i just said that, and it feels really weird.
I won’t lie though, I do have some PUTS on Citi and Bank of America, as well as some June PUTS on the S&P, so i am short the market.. nothing significant as far as portfolio allocation goes… just a little gambling in the greatest casino on Earth.
My focus is still on precious metals and preps. At this point, I do not purport to know WTF is going on, so I gotta go with classic SHTF planning. I am locked and loaded waiting for gold to drop to under $900 in the event of another market crash resulting from USD strength. IF it happens again, i think it will be the last chance for gold under $1000 in real 2009 USD terms.
Perhaps if real estate crashes some more, I might jump into something like this little property with a nuclear bomb shelter.
Oh, regarding your question on recognizing hyperinflation/currency crisis… I really do wonder what would happen if all of a sudden the dollar dropped by 30%??
Would house prices/grocery prices adjust immediately as well, or would there be a time delay?
My personal opinion, though it is speculation, is that in a rapid currency collapse main street would not be able to respond quickly enough… It would take a while for most people to realize WTF happened. Silver/Gold and stocks might rocket up right away…
but what about other tangible goods and services?Â
A house selling at 100,000 if the currency collapses 30% should auto adjust to about $130K or so… would that happen, though?
Maybe there will be a sweet-spot in there where main street prices will lag the currency. Could be a good time to turn around a quick 30%+ profit in real terms on certain investments.
just random thinking there, I have not really given it that much thought up until now.
Mac
Mac, I have some puts too, have had them since May. Problem is I’ve lost a bunch on all of them waiting for reality to resurface. I guess I’m wrestling with myself when to admit that reality will not return anytime soon and get out while I still can.
My original plan was to outlast this 7 month runup, but I never dreamed it would go on for this long. Not only that, but the bullish sentiment appears to be growing by the day. No bad news seems to be able to derail the markets (yesterday a modest uptick in initial unemployment claims and the markts soar 120 points – but hey, unemployment claims never really seemed to hurt the markets much anyway). Every day for nearly 7 months there was more bad news than good news and still the market shrugs it off. Now we’re in earnings season and if I heard right an incredible 75% of reporting companies in the S&P have reported positive earnings. So now we are actually in a situation of increasing positive news so my conclusion is therefore the markets have nowhere to go BUT UP. Perhaps the old contrarian rules will apply, but logically this is how I see it. Even during 1932 the runup lasted 5 months after the initial crash. We have easily smashed that.
I am therefore getting close to the point where I admit I have no clue WTF I am doing and what the markets will do and am considering getting out all-together. I am going to wait just another week as October is traditionally a bearish month, but this one seems to defy all the rules.
I did pick up some Inverse ETF’s on and off for the last few weeks trying to catch a sweet-spot, but no luck. I am totally out at this point except for the PUTS I mentioned and PM stocks. At this point, I would not mind a move to 11,000…. Then, if that bad boy collapsed to 10,000, I might move back into the inverse.. that might be a good signal that it is in a down-trend.
The 75% number you mentioned is what I read too, i think maybe over at zerohedge.com . The earnings are better than the watered down estimates, and it seems to me this thing is prepped to skyrocket even higher. Maybe a good way to play this is to just buy gold stocks… the downside, in my opinion, is at least limited here because at a certain point international buyers will move in to support the market… So, you get some upside potential, while limiting downside in the long-run….. I would not play any leverage on the gold purchases, though.
I don’t think anyone knows what they’re doing at this point, except the guys who know what the riskless trade is… eventually, everyone but the real insiders will get killed… The shorts took a beating for the last 6 months, and the day that the last bear gives up is the day this thing will crash and wipe out the bulls! In your case, the minute you unload your shares, the market will take a 10% dive in one day!! 🙂
@Mac – just a quick response to your comments about the house price jumping 30% in that (hyper)-inflation scenario. Â I don’t think that would happen, as we have clearly been seeing ASSET price DEflation for the last many months. Â The day-to-day things we need to survive, like food, energy, insurance, etc., have been going up, but asset values for things like houses, time-shares, jet-skis, and Escalades, have been dropping dramatically. Â IMO, I think a large and immediate US$ devaluation would cause panic and loss of trust in the system, and would cause asset prices to fall even further, because nobody would be buying anything but the three G’s: Â guns, gold & groceries. Â Just my $.02.
To me, it follows along the same lines as people typically saying gold is a good hedge against INflation… which may be true, but I also believe it to be a good hedge against DEflation, at least indirectly, due to being protection against a situation of loss of all confidence in the manipulated and corrupt fiat currency charade in which we all try to survive. Â I guess that’s another $.02. Â I’m going to quick now before I owe a full nickel. Â LOL
I, too am surprised that the market has done as good as it has. It goes to show that no one can time any market and that the majority who think they can usually lose out. Â One thing I do know is that the ‘trend will always be a friend’ when it comes to LONG TERM investing. There is no doubt that the trend is going to be bad for the dollar.. the trend will be away not towards the dollar. A good example of this is the price of gold in dollars as compared to the price of gold in euros or yen for example. A very different story! Â I believe the best plan is to diversify slowly by cost averaging into investments that are non dollar based.
There are mutual funds that specialize in baskets of good international stocks.. (China and Brazil are good examples of where the new growth is happening), there are CD’s you can purchase in other currencies through Everbank (rated 4 stars by bankrate.com and is FDIC insured), there are mutual funds that invest in single or baskets of currencies, there are Canadian Royalty Trust Unit investments which pay great monthy dividends and of course there is gold and silver. Â If you want to play gold shares.. buy the mining stocks of companies that are priced in the foreign currency (strong currencies.. not the peso for example)
These investments that I have listed are not guaranteed short term plays… they must be made in disciplined dollar cost averaged amounts over many months.  The goal, get as much of your money OUT of the dollar and INTO as many DIVERSIFIED investments as possible and start NOW.  I don’t believe that we will wake up one day and see the dollar worthless… but I do believe that when you compare quarter over quarter… year over year  the purchasing power will erode (to prove this compare the dollar to the Euro over the past 5 years!). This trend will greatly accelerate when more and more foreign countries will demand payment away from the dollar as the current reserve currency. Like the saying goes, “forwarned is forarmed”!