[Samseau]

I've been doing a lot of research in the past four months on the economy, and have tried to avoid jumping to conclusions, but I think the arithmetic is hyperinflation.

I think hyperinflation will happen <10yrs:

1. The US Gov. will never reform its massive entitlement programs.

2. It will print more money to pay for its expenses, eventually debasing the currency to the point of hyperinflation, or risk defaulting on its debt and going bankrupt. When a country goes bankrupt, the currency becomes worthless (i.e. the currency experiences hyperinflation). When the USSR went bankrupt in 1989 its currency hyperinflated.

3. The inflation of our money supply has an exponential destruction of our currency. Meaning, they print 1 Trillion to buy stuff today, but by next year, they need 2 trillion to buy the same amount of stuff.

4. On top of the inflation of our money supply, there is a general depression in the USA right now that is deflating the value of our physical assets, which means we will have less tangible things to back up our currency, further accelerating currency debasement. (note: inflation of the currency and deflation of assets is called biflation).

5. If at any time the USA raises interest rates, like they did in the 1980's, to combat inflation, it would increase the interest payments on our $14 trillion debt to unpayable levels which would cause the USA to default on its debt.


Can anyone dispute any one of the 5 points listed above? Otherwise hyperinflation is guaranteed (maybe not in 10yrs, but eventually. I think 10yrs is a reasonable guess).

I don't know what hyperinflation would entail for all of us, either. I know the old and poor suffer the most, but it shouldn't be a madmaxx scenario. Remember that Wiemar Germany went from hyperinflation to taking over Europe in less than 15yrs.

[kerouac]

I always find it a bit strange to discuss big economic issues (like hyperinflation) on a forum like this. Economics is a pretty intense subject, and I imagine has come a long way since the 80s, so to try to discount the current workings of the government and the Fed in order to show some sort of collapse of the USD based on the rationalizations you pointed out above just seems a bit, I don't know, naive?

I think it's a little wiser to look towards resources like this for economic thought and reasoning:
AEA Journals

But then again, what do I know, I'm no economist like this guy:

[Samseau]

The AEA journals... you mean the same ones that completely failed to predict the sub-prime housing crisis? Good idea, man. Clearly that's the non-naive move.

And Ben Stein is yet another voice of economic wisdom:

http://www.youtube.com/watch?v=RYX1AgEV0vo

[Vesuvius]

Do what I have done. Hedge your bets.

An old Indian proverb states: In times of peace prepare for war.

Get some silver, rice, water, and an AK off of cheaper than dirt.

Then try to make some money, bang, and do what you want.

You're prepared for both situations. That's all you can do.

Yes, I read stuff like NeitherCorps and Zero Hedge too but . . . What can you do about it besides on the community level?

Look out for your friends and family.

[HD668B]

http://www.youtube.com/watch?v=3u2qRXb4xCU

[phoenix abroad]

Hyperinflation is certainly a significant possibility, but keep in mind that other countries (China) are still playing along with the USA's inflate-or-die game. If this changes though the USA is probably fucked.

I think it is very likely however that the inflation as measured by "official" (aka bullshit) government statistics will not increase much, while the cost of goods that actually matter to people such as food and gas will rise significantly in $ cost.

[DanteRizad]

I think the dollar will eventually implode. I may be crazy, but check out Alex Jones ideas, if only to get you thinking.
I always wanted to at least learn a foreign language and do business, traveling back and forth. But with the economy, I plan on completely expatriating. sooner rather than later.

[YoungGunner]

Don't know about hyperinflation but its definitely gonna get worse over the next two years. My solution, convert American funds into yen and euro.

[Vesuvius]

(01-08-2011 06:31 PM)DanteRizad Wrote:  

I think the dollar will eventually implode. I may be crazy, but check out Alex Jones ideas, if only to get you thinking.
I always wanted to at least learn a foreign language and do business, traveling back and forth. But with the economy, I plan on completely expatriating. sooner rather than later.

Him and Ventura are melodramatic but I doubt neither's sincerity. If you're poor like me. Well that's a little easier said than done.

Funny. My book is a guide. Are you awake?

[rudebwoy]

If you are smart you should be packing your bags. Living overseas has never looked so attractive, the USA will implode financially.

[Kona]

I'm not a financial whiz kid like you guys but please tell me what you think about this scenario, and how it relates to inflation.

I have a bunch of rental apartments and houses. Four of them are vacant and on Craigslist for renters. I've gotten 23 emails asking if I take government vouchers for rent since I put them up. Last year, around this same time I had a few up as well. I see here I got 10 inquiries about the vouchers. Some of the people tell me how much their vouchers are. This year the lowest voucher is more than the highest one from last year. One lady's voucher is $1320.

There are so many things wrong with this. When the government gives these things out aren't they driving UP the cost of housing? Why are they making it a better option to rent my shit to low income people as opposed to people that work to pay their bills? Isn't this making everything else expensive? If people don't have to do anything to pay rent, can't they now spend more money on pork rinds and 40's, hence 7-11 starts charging more?

Of course, I'm not accepting the vouchers. As a veteran Naval Officer, I know that the only thing you should trust the mainland government to do is fuck you over. I guarantee they'll be some kind of trick when it comes time for me to cash the voucher in. It'll wind up being the guy that handles his shit getting screwed. Plus, the way I see it, financially these vouchers can't last, which leads me to this theory:

Once the top 50% of people realize it's just a lot easier to be in the bottom 50%, the system is fucked. Would you rather wait for four hours at the unemployment office to get your extension and have the rest of the week off, or go bag groceries for 40 hours and get the same money? If Barack Obama (the first Hawaiian President) is handing out twice as many vouchers this year is bruddah gonna give out three times as many next year? Why doesn't he pay everybody's rent? He'll pay my mortgages if I let iceheads live in my houses. Where's the logic?

Are they trying to fuck things up?

Aloha!

[Jim Kirk]

Kona -

I have cases going on regarding vouchers - evidently the newest form of illegal discriminaton is now called 'source of income' discrimination - I dont know if this has hit yet in Hawaii but in the 5 boroughs of NYC its grounds for a federal lawsuit now if you refuse to rent to someone because they pay with a voucher - I am doing lots of research bec

THey have vouchers now for EVERYTHING and EVERYONE and the vouchers can go as high as 1800$ per month in certain areas - the cheapes voucher from program xxx in New York City to be used to rent a studio or 1 bedroom is $889.00. This would be ontop of Medicaid - food stamps - wic - SSI disability, etc.

They have federally backed or assisted housing voucehrs for
disabled people
people with AIDS
sufferers of domestic violence
recently released from prison into a work furlough program -
retarded people
poor people
refugee people, etc. etc. etc.

The trick with a lot of these programs is that evidently - after 12 months or so the voucher stops and then the receipient has to pay for rent himself or has to move into gov't housing. Guess what happens when they dont get new digs - you dont get paid and you have to evict them. I've worked on evictions with 'protected classes' of people - you might as well flush 6 months +all the rent + damage to your apartment from one end to the other while you goto housing court over and over again. Section 8 people often get free lawyers to fight the eviction too.

Be very careful with Craigslist - that gets people in trouble. They have delinquents all over NYC calling the landlords and 'testing them' - If i have some time I can post some more - this country is a fucking joke.

[Samseau]

(01-07-2011 04:53 PM)LÉtranger Wrote:  

http://www.youtube.com/watch?v=3u2qRXb4xCU

Thanks for the great link. This guy has an amazing voice.

(01-07-2011 06:58 PM)phoenix abroad Wrote:  

Hyperinflation is certainly a significant possibility, but keep in mind that other countries (China) are still playing along with the USA's inflate-or-die game. If this changes though the USA is probably fucked.

China will continue to play this game until we are sucked dry. Once there's no more fun in fucking America, they will move to a new partner.

(01-08-2011 06:31 PM)DanteRizad Wrote:  

I always wanted to at least learn a foreign language and do business, traveling back and forth. But with the economy, I plan on completely expatriating. sooner rather than later.

(01-09-2011 12:25 PM)rudebwoy Wrote:  

If you are smart you should be packing your bags. Living overseas has never looked so attractive, the USA will implode financially.

The problem with expatriation is there's no way to tell what other countries will be good/bad to expatriate to. This is because it's anyone's guess as to how the rest of the world will fare once America loses its hegemony.

Take, for example, India and South Africa. When Britain ruled the world, both places were thriving up-and-coming hotspots to be a Westerner. Once Britain lost everything after WW2, however, both become shitholes.

The most obvious choice to move to, at least financially, is China... but, do you really want to live in China? Seems like an awful, soul-sucking culture to me.

One decent place in terms of the culture/economy may be Brazil... but it's still anyone's guess.

(01-08-2011 07:24 PM)YoungGunner Wrote:  

Don't know about hyperinflation but its definitely gonna get worse over the next two years. My solution, convert American funds into yen and euro.

Using other currencies is a good idea, but converting to the Euro or the Yen is a terrible idea. The Euro is experiencing one debt crisis after another: first it was Greece, then Ireland, and already Portugal's bond yields are increasing. Europe is going belly up like the USA.

The same goes for Japan, which is twice as indebted as the USA.

http://www.zerohedge.com/article/guest-p...-collapses

In fact, Japan is so fucked, it looks like are about to experience something worse than Hiroshima and Nagasaki combined. I wouldn't be surprised if China just decides to invade them once they go under.


If you want to invest in other currencies besides Gold/Silver, then I would recommend the swiss franc, which has performed PHENOMENALLY.

http://tinyurl.com/2ccu59p
(be sure to look at the 1yr, 5yr views)

[Samseau]

(01-09-2011 04:36 PM)Kona Wrote:  

I'm not a financial whiz kid like you guys but please tell me what you think about this scenario, and how it relates to inflation.

You are right to be cautious about these voucher programs. However, although you've listed the cons - it would let in morons into your property, the government is unreliable, it's downright unethical to support freeloaders over hard working citizens, etc. - there are some SERIOUS BENEFITS++ to using government vouchers.

According to Austrian economic theory (the best track record of all economic theories; it has predicted, among other predictions: the fall of Weimer Germany and the rise of some sort of dictator, the Fall of the Soviet Union, the sub-prime housing crisis) the principle regarding inflation is:

-=When living in an inflationary environment the people who make the most money are those closest to the source of inflation, which is almost always the government that controls the printing press.=-


In our case, the Federal government definitely has all the power regarding the flow of money, so government vouchers/price controls/wages will always reflect the highest possible source of income.

Why? Think of inflation like a river, where the flow of money created from the printing presses flows downstream:

Printing press > bank > government programs/employees/wages > consumers > businesses > professionals > wage labor

By the time the money reaches the end of the river, it has lost most of it's value.

So, for example, say the gov prints 50 billion to feed people on food stamps. Let's say the price of bread is 2.00. 1 billion of that 50 is spent on bread. Because so much bread is bought so quickly (i.e. increased demand for bread), the price rises to 2.50 within 1 month of the food stamps being issued. The supermarkets, who only pay their employee's 8.25 an hour, have then paid their wage slaves the same amount they were paid for the last 6 months - except now the price of bread has risen by 25%! By the time the supermarkets increase the pay of their wage slaves, the government sends out another 55 billion (10% increase) in food stamps, the following month, to reflect the increase in food prices. This in turn restarts the cycle of increasing food prices.

Those with the food stamps, aka the people next to the printing press, will always be able to afford the goods, whereas those who work for a living get boned. Those who work hard starve, while the free loaders live easy.

This works exactly the same for rental voucher programs. Those closest to the supply of the printing press will always have the most money. Therefore, it is in your interest to take these rental vouchers.

Looking at what you said,

Quote:

Some of the people tell me how much their vouchers are. This year the lowest voucher is more than the highest one from last year. One lady's voucher is $1320.

This is criminally fucking ridiculous. According to what you tell me here, the inflation is already much worse than I realized... the printing presses are ALREADY overtaking what average working people can make! It's so depressing, realizing what's happening to this country... but my advice to you:

Out of your 23 emails, scan through them all and pick the one icehead who looks the least problematic, and take them in. As stated in the original post, our inflationary problems should only continue to grow, so according to the best economic logic, these government vouchers will make you very wealthy.

In fact, if inflation continues unabated, you will soon be forced to take nothing but government vouchers in order to keep up with the rising property/income/rental/insurance taxes. So get a head start, and hedge yourself by taking at least one voucher rentee.

[Samseau]

By the way, everyone, in case you've been wondering why food has been getting expensive:

http://www.zerohedge.com/article/food-st...32-million

[rudebwoy]

Sameseau - well i agree i have no interest in China, living or visiting. But I would look at the BRIC nations, well actually Brazil would be my only choice out of the four. The world will be tossed upside down in a few years, I have been watching the signs for the last few years. Western countries will fall like a deck of cards once the USA will go under, anyone that doubts this is a fool. It is simply economics, why pay someone in North America to build a car for $30 hr when you can get the same car made in India for $1 hr.
Manufacturing has run away from the USA, I can easily find the stats but do I really need to prove that fact.

Personally, I am looking at a few countries which I consider relatively cheap and not too far away. Not to be racist but a good friend of mine said go where the Chinese/Indian people go or as Chris Tucker sd in Rush Hour, follow the rich white man.

I also think South America, certain parts anyway will develop big time over the next few years. My company has a office in Costa Rica and everyone is turning up there faces at working there for $20,000 a year. I am sure the quality of life would be alot nicer than where I am living. Anyone been to Costa Rica?

[MysticTraveler]

For the US economy to implode someone has to press the button. There are 2 countries that can press it: Japan and China. Given Japan's current state and the fact that the US is is its largest buyer of steel, Japan will never want the US economy to go down.

China, as of now will also not want the US economy to implode but it has been signing trade deals with India, Brazil, Pakistan and other emerging countries like crazy, so, it may not care about the US economy in the future. Alex Jones, Gerald Celnete etc are right when they say that the US economy will go down but they usually exaggerate the time frame. I think Gerald has been talking about an Economic collapse since the year 2000. There is a saying "When you make a prediction never mention the time." First the Euro will have to collapse and then the Pound and then only will people start to worry about the Dollar. This takes a lot of time.

When you see an article about the eventual collapse of the US dollar in TIME magazine then you will know that shit is about to hit the fan.

I agree with Samseau. Converting to the Yen and Euro is a terrible idea. Gold and silver are your best options and it seems that Swiss Francs are also a great investment. Thank you for the recommendation Samseau.

I have spent the last 2 years worrying about the world economy and trying to figure out the exact time of the inevitable collapse.Trust me, its a useless pursuit. Focus on your business or job, develop skills (especially fluency in new languages), don't overspend, save money and invest in Gold and Silver.

[phoenix abroad]

(01-11-2011 12:14 AM)MysticTraveler Wrote:  

I have spent the last 2 years worrying about the world economy and trying to figure out the exact time of the inevitable collapse.Trust me, its a useless pursuit. Focus on your business or job, develop skills (especially fluency in new languages), don't overspend, save money and invest in Gold and Silver.

I totally agree with this. I traded my ass off during the '08-'09 stock market crash and it was just not worth the time commitment and stress.

You will never know for sure if/when a collapse is going to happen. The best thing to do is just get your ducks in a row now so that if/when the shit hits the fan you will do alright.

[truedat]

I think Mystic is right. When the Euro goes, the dollar will be right behind it and in a matter of weeks. BTW, they are both done already its just a delayed reaction though market/bond manipulations. Gas will be 5-7 dollars in the next 12 months, and food cost are rising every month. Not because prices are going up, but because the dollar is going down. PHYSICAL gold and silver. I buy US eagles because I think they will have additional 'collector' value after the collapse. Its kind of a memento of a once great empire. Sad but true.

[MysticTraveler]

(01-11-2011 05:07 PM)truedat Wrote:  

I think Mystic is right. When the Euro goes, the dollar will be right behind it and in a matter of weeks.

It could also be the other way around. When the Euro goes then the dollar will be seen as the world currency and its value could appreciate significantly. This is what pisses me off about Economics, there are always two opposing forces and you are never right. I don't think that we will see a dollar collapse this year. If I were a Martian observing Earth's economic activities then I would wonder why the Euro is still around after all that has been happening. They recently introduced the Euro in Estonia, in mean WTF?

[Irminsul]

I see too many ads on TV selling gold. Like those ones with the old British woman who says "if you could have $x in cash, or $x in gold, but you couldn't spend it for five years, which would you choose?" The implication is that you should take the gold because it will go up over the next five years, relative to the dollar. But SHE (or her company) has gold, and is trying to get cash for it - right? Who is the sucker in this trade?

I think all the "dollar's gonna go into hyperinflation!" talk is just a big scam to get people to buy gold at ridiculously inflated prices. People like Glenn Beck, who promote this stuff, always have ads on their programs selling gold. Makes me think the dollar will go up in the near term (5 years or so). After that, who knows. The current system may be unsustainable long term but I wouldn't be too worried for the foreseeable future.

[MysticTraveler]

(01-12-2011 02:33 AM)Irminsul Wrote:  

I see too many ads on TV selling gold. Like those ones with the old British woman who says "if you could have $x in cash, or $x in gold, but you couldn't spend it for five years, which would you choose?" The implication is that you should take the gold because it will go up over the next five years, relative to the dollar. But SHE (or her company) has gold, and is trying to get cash for it - right? Who is the sucker in this trade?

I think all the "dollar's gonna go into hyperinflation!" talk is just a big scam to get people to buy gold at ridiculously inflated prices. People like Glenn Beck, who promote this stuff, always have ads on their programs selling gold. Makes me think the dollar will go up in the near term (5 years or so). After that, who knows. The current system may be unsustainable long term but I wouldn't be too worried for the foreseeable future.

Yeah, she is selling gold at a mark-up and making profits. Do you know what she is investing it in? Maybe she is investing the money in gold mining stocks which are a way of leveraging your money without entering into a derivatives contract. The dollar is not falling every single day. If the dollar was falling significantly everyday and she was selling Gold then you could say that it was a scam. Moreover, I don't think these people get scammed easily :

http://economictimes.indiatimes.com/mark...420983.cms

[rudebwoy]

(01-11-2011 05:07 PM)truedat Wrote:  

I think Mystic is right. When the Euro goes, the dollar will be right behind it and in a matter of weeks. BTW, they are both done already its just a delayed reaction though market/bond manipulations. Gas will be 5-7 dollars in the next 12 months, and food cost are rising every month. Not because prices are going up, but because the dollar is going down. PHYSICAL gold and silver. I buy US eagles because I think they will have additional 'collector' value after the collapse. Its kind of a memento of a once great empire. Sad but true.

Well said and manipulation being the key word. I see you know what you are talking about and I too buy the silver eagles as well, that is the only real hard currency out there these days. I missed the gold rush, in 2005 I was told to buy it at $400 oz and I did not.

Technically, the dollar is sinking everyday because the price of goods are increasing at a rapid rate and your buying power is decreasing.

China will pull the plug on America soon, Japan is too busy trying to stay afloat. The Chinese are not stupid, they will get tired of supporting the US debt.

[YoungGunner]

(01-09-2011 08:32 PM)Samseau Wrote:  

(01-07-2011 04:53 PM)LÉtranger Wrote:  

http://www.youtube.com/watch?v=3u2qRXb4xCU

Thanks for the great link. This guy has an amazing voice.

(01-07-2011 06:58 PM)phoenix abroad Wrote:  

Hyperinflation is certainly a significant possibility, but keep in mind that other countries (China) are still playing along with the USA's inflate-or-die game. If this changes though the USA is probably fucked.

China will continue to play this game until we are sucked dry. Once there's no more fun in fucking America, they will move to a new partner.

(01-08-2011 06:31 PM)DanteRizad Wrote:  

I always wanted to at least learn a foreign language and do business, traveling back and forth. But with the economy, I plan on completely expatriating. sooner rather than later.

(01-09-2011 12:25 PM)rudebwoy Wrote:  

If you are smart you should be packing your bags. Living overseas has never looked so attractive, the USA will implode financially.

The problem with expatriation is there's no way to tell what other countries will be good/bad to expatriate to. This is because it's anyone's guess as to how the rest of the world will fare once America loses its hegemony.

Take, for example, India and South Africa. When Britain ruled the world, both places were thriving up-and-coming hotspots to be a Westerner. Once Britain lost everything after WW2, however, both become shitholes.

The most obvious choice to move to, at least financially, is China... but, do you really want to live in China? Seems like an awful, soul-sucking culture to me.

One decent place in terms of the culture/economy may be Brazil... but it's still anyone's guess.

(01-08-2011 07:24 PM)YoungGunner Wrote:  

Don't know about hyperinflation but its definitely gonna get worse over the next two years. My solution, convert American funds into yen and euro.

Using other currencies is a good idea, but converting to the Euro or the Yen is a terrible idea. The Euro is experiencing one debt crisis after another: first it was Greece, then Ireland, and already Portugal's bond yields are increasing. Europe is going belly up like the USA.

The same goes for Japan, which is twice as indebted as the USA.

http://www.zerohedge.com/article/guest-p...-collapses

In fact, Japan is so fucked, it looks like are about to experience something worse than Hiroshima and Nagasaki combined. I wouldn't be surprised if China just decides to invade them once they go under.


If you want to invest in other currencies besides Gold/Silver, then I would recommend the swiss franc, which has performed PHENOMENALLY.

http://tinyurl.com/2ccu59p
(be sure to look at the 1yr, 5yr views)

Sorry I meant to say my solution was converting to Yen and Euro last year but now I see that plan's gone down the toilet. The exchange rate from Yen to dollar was high in November but since both currencies/countries are imploding that seems like a pretty bade idea. I've heard Australia and New Zealand and Canada are pretty safe bets, you agree?

[rumguzzler]

The chinks won't do it.

They are going to try and slither their way out of it, but there will be no crash of the dollar. They have enormous assets tied up in dollars. Were the dollar to crash, they'd lose a fortune, and their economy would be destroyed.