Expect Mass Deflation to Mass Inflation within months
May 22, 2009
You heard it here first, in October 2008 everyone was looking at the great depression as the model, and rightfully so because if left unchecked we were heading down that path.
However the federal reserve, not any longer tied to the gold standard, had more options than it’s 1934 counterpart, meaning creating money out of thin air was on the table, or commonly called “printing money”. It will reach the point where within the next 8 to 12 months, expect to see advertising out there regarding how company X has “stable pricing” for it’s products.
Out of the two horrible solutions, 1934 vs 1974 the Federal Reserve choose the latter. As noted earlier they printed off a ton of money, to the tune of 4 trillion US dollars. The US at any given moment over the past few years had roughly 1 trillion in printed circulation…. but they printed off nearly 4 trillion think about that percentage change. Now most of the US wealth isn’t in printed cash or bank accounts, most of US wealth is locked up in your house and your car. You may live in a house that is worth about $200,000, but do you have $200,000 in cash in your pocket?
If those printed dollars were spread evenly you would be looking at triple digit inflation, but it wasn’t spread evenly, it was loaned to banks that refused to loan it to companies and individuals. Hence slowing the rate of how fast the inflation hit, but it’s hitting.
The reason gas prices have been moving upwards recently is because speculators have been been given TARP funded (IE: your tax money) loans to make gas futures buys.. it’s not because demand went up, it actually went down… it’s because more money has been thrown at the energy market.
$4.25 a gallon (like we experienced last summer) may not show up overnight, but it will show up again… most likely within 12 months… meaning brace for $100 dollar fillups.
See the problem was that we had general deflation, so to hedge against it dollars were printed and handed out to individuals that would speculate on driving up commonly costs to stop deflation in it’s tracks. Gas touches everything. You can’t get a product to Walmart to sell without a truck delivering it from a factory, hence the transportation costs have to be increased when fuel prices increase. Stopping deflation in the process and driving up prices on the very vulnerable 10% of Americans standing in the unemployment line.
Mark my words on this one, inflation is about to hit, and it’s about to hit really bad.
This women is burning German money directly prior to WWII, because it’s “cheaper” to burn money than to use that money to buy firewood.
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