Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Chasing Value in Unloved by Markets Small Cap Biotech Stocks for the Long-run - 27th Jul 21
Inflation Pressures Persist Despite Biden Propaganda - 27th Jul 21
Gold Investors Wavering - 27th Jul 21
Bogdance - How Binance Scams Futures Traders With Fake Bitcoin Prices to Run Limits and Margin Calls - 27th Jul 21
SPX Going for the Major Stock Market Top? - 27th Jul 21
What Is HND and How It Will Help Your Career Growth? - 27th Jul 21
5 Mobile Apps Day Traders Should Know About - 27th Jul 21
Global Stock Market Investing: Here's the Message of Consumer "Overconfidence" - 25th Jul 21
Gold’s Behavior in Various Parallel Inflation Universes - 25th Jul 21
Indian Delta Variant INFECTED! How infectious, Deadly, Do Vaccines Work? Avoid the PCR Test? - 25th Jul 21
Bitcoin Stock to Flow Model to Infinity and Beyond Price Forecasts - 25th Jul 21
Bitcoin Black Swan - GOOGLE! - 24th Jul 21
Stock Market Stalling Signs? Taking a Look Under the Hood of US Equities - 24th Jul 21
Biden’s Dangerous Inflation Denials - 24th Jul 21
How does CFD trading work - 24th Jul 21
Junior Gold Miners: New Yearly Lows! Will We See a Further Drop? - 23rd Jul 21
Best Forex Strategy for Consistent Profits - 23rd Jul 21
Popular Forex Brokers That You Might Want to Check Out - 22nd Jul 21
Bitcoin Black Swan - Will Crypto Currencies Get Banned? - 22nd Jul 21
Bitcoin Price Enters Stage #4 Excess Phase Peak Breakdown – Where To Next? - 22nd Jul 21
Powell Gave Congress Dovish Signs. Will It Help Gold Price? - 22nd Jul 21
What’s Next For Gold Is Always About The US Dollar - 22nd Jul 21
URGENT! ALL Windows 10 Users Must Do this NOW! Windows Image Backup Before it is Too Late! - 22nd Jul 21
Bitcoin Price CRASH, How to SELL BTC at $40k! Real Analysis vs Shill Coin Pumper's and Clueless Newbs - 21st Jul 21
Emotional Stock Traders React To Recent Market Rotation – Are You Ready For What’s Next? - 21st Jul 21
Killing Driveway Weeds FAST with a Pressure Washer - 8 months Later - Did it work?- Block Paving Weeds - 21st Jul 21
Post-Covid Stimulus Payouts & The US Fed Push Global Investors Deeper Into US Value Bubble - 21st Jul 21
What is Social Trading - 21st Jul 21
Would Transparency Help Crypto? - 21st Jul 21
AI Predicts US Tech Stocks Price Valuations Three Years Ahead (ASVF) - 20th Jul 21
Gold Asks: Has Inflation Already Peaked? - 20th Jul 21
FREE PASS to Analysis and Trend forecasts of 50+ Global Markets by Elliott Wave International - 20th Jul 21
Nissan to Create 1000s of jobs with electric vehicle investment in UK - 20th Jul 21
Bitcoin Halvings Price Forecast and Stock to Flow Analysis - 18th Jul 21
Dell S3220DGF Unboxing and Stand Assembly - 32 Inch 165hz Curved Gaming Monitor Amazon Discount - 18th Jul 21
What Does The Fed Mean By “Transitory Inflation” And Why Is It Important To Understand? - 18th Jul 21
Will the US stock market’s worsening breadth matter? - 18th Jul 21
Bitcoin Halving's Price Projection Forecasts Trend Trajectory - 18th Jul 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Ben Bernanke Beats Deflationists Into Submission With His Money Stick

Economics / Inflation Dec 01, 2011 - 04:11 AM GMT

By: Jeff_Berwick

Economics

Best Financial Markets Analysis ArticleWe've got a new slogan for deflationists.  Deflationists: Wrong Since the Advent of Fiat Currency.

It's been the never-ending, battle royale of the economic world ever since the looming end to this financial system became starkly clear in 2008.  Will the western governments, almost all completely incapable of paying the gargantuan debts enabled by democracy, central banking and fiat currency, allow the system to collapse (deflation) or worm their way out of it via inflation, until we live in a hyperinflationary apocalypse?


We've always stated the same thing and continue to state it.  Deflation IS possible but highly unlikely in a system where a man who goes by the moniker, "Helicopter Ben", can print unlimited amounts of currency units to keep the anti-capitalist western monetary system limping along for just a little while longer... just long enough for a bunch of thieves and murderers with names like Obama, Sarkozy, Merkel and others to get out of dodge before the collapse.

The deflationists have now been wrong, at least in the US, since 1938.  That was the last time there was actual deflation.  Our chart of the US True Money Supply dating back to 1959 show that only for fleeting moments is there any hint of that line going south.

Inflation is defined as an increase in the money supply.  Deflation is a decrease in the money supply.  Prices are a SYMPTOM of increases or decreases in the money supply.  This is very, very basic stuff.  Unfortunately, in world-improving, highly socialist "institutions" such as Harvard, Yale and Princeton the last few sentences may as well have been written in Nepalese.  They speak a language called Keynesian and have a religious belief that drawing pictures on pieces of paper can make everyone rich.  They probably also stomp up and down on a bag of chips to make more chips, too.

For months the Germans and Europe had everyone on edge.  Would a western nation actually default, have its entire banking system collapse, impoverish almost all middle class savers and reduce the size of their monstrous socialist welfare governments by a massive amount, throwing millions into the streets unemployed and penniless?  The answer, once again, was no.  It was no surprise to us here, as we have always stated that was the much more likely route chosen.  Every other time in history when a democratic overindebted government with a fiat currency was faced with collapse or hyperinflation they always fire up the choppers.  The reason is simple.  It's the easiest way out for the politicians.  Obama would much prefer the dollar goes into hyperinflation - something he can blame on greedy corporations, or China, and whip the rich-haters into a frenzy - than to walk up to the Presidential podium and go down in history as the President "in charge" when the US empire collapsed.

They've been doing this for millennia.  They weren't fiddling as Rome burned because the government took responsibility and undertook a self-imposed discipline.  Rome was alight because the government overspent massively on military excursions, bread and circuses and used coin-clipping and other means to devalue the currency.  That all might sound familiar to Americans today except coin-clipping has been replaced by computerized fiat note creation.

And so, today along with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank, the Fed announced it is cutting the penalty that it charges over a basic rate from 100 basis points to 50 basis points.

It sounds innocuous enough.  But what that statement really means is that every major western money-printer will do whatever it takes to ensure that capitalism is never allowed to take place.  It's no longer "too big to fail", it is "to fail is not allowed".  Entire legions of zombie banks and nation states will continue to lurch forward, completely dead on the inside, but animated by endless amounts of fiat money that will only ensure a hyperinflation of all western fiat currencies.

It is possible they could keep this game going for a few more years.  Probably not much longer than 3 or 4, however.  And it could happen much sooner than that, so to not prepare now is the height of risk-taking.  We've been preparing by owning precious metals and the companies that mine or explore for gold and silver.  As all the western central banks have shown their outright commitment to printing money we believe that it will ignite a gold & silver stock bubble that will be one for the ages.  And, as we've outlined for subscribers over the years, we will then hope to "cash" in our stocks at ludicrous gains and look to get into hard assets once again in preparation for the final hyperinflationary crack-up collapse.

It won't be easy... and that's why we try to provide subscribers with as much information and analysis as possible to survive The End Of The Monetary System As We Know It (TEOTMSAWKI).  But, yet again, and for the thousandth time in a row, the deflationists have been proven wrong and the inflationists have been proven right.

Subscribe to TDV today (90 day moneyback guarantee) to access our Special Report on How to Own Gold as well as get complete access to our newsletter and portfolio selections.

The Dollar Vigilante is a free-market financial newsletter focused on covering all aspects of the ongoing financial collapse. The newsletter has news, information and analysis on investments for safety and for profit during the collapse including investments in gold, silver, energy and agriculture commodities and publicly traded stocks. As well, the newsletter covers other aspects including expatriation, both financially and physically and news and info on health, safety and other ways to survive the coming collapse of the US Dollar safely and comfortably. The Dollar Vigilante offers a free newsletter at DollarVigilante.com.

© 2011 Copyright Jeff Berwick - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in