Could hyperinflation be in America's furture?
BigRed
Posts: 716
Due to all the government spending and printing of money, or will they keep a handle on it . And would PM's and other tangible items vanish overnight?
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Comments
i.e. where screwed.
Regardless of what you call it, we'll make well into the double digits and possibly over 20%. Whatever you call that, it will be bullish for metals. No doubt the BLS CPI stats will show inflation still in single digits at that point.
roadrunner
looked like 40% inflation was in the future. If they keep try-
ing to pencil whip it it's going to be much worse.
believe that every mortgagor is going to get a free house when
they pay off their mortgage with the new "cheap" dollars.
We have now seen that the banks and their government will
allow the economy to grind to a halt before they are willing to
admit that the mortgages they own are of little/no value.
Deflation on an unprecedented scale will be seen LONG before
inflation becomes an admitted problem.
Got Weimar?
So, deflationary recession first then warp-inflation...and finally we become the USSA.
Ren, out
I knew it would happen.
regardless the short term to ten year outlook is bleak either way.
This credit/lending tightening by the banks and the defaulted mortgages add up to deflation, but unlike the big DP of the 30's,
our crisis control leaders are dumping liquidity into the markets all over the world.
Do you believe that the deflationary aspects of the asset markets declining will will be relatively short lived because of this active liquidity effort?
Or do you believe that no matter, we are in for a deflationary trend of long duration ie. 3-7 years?
Please explain.
<< <i>Folks who believe "hyperinflation" is on the way, have to also
believe that every mortgagor is going to get a free house when
they pay off their mortgage with the new "cheap" dollars.
We have now seen that the banks and their government will
allow the economy to grind to a halt before they are willing to
admit that the mortgages they own are of little/no value.
Deflation on an unprecedented scale will be seen LONG before
inflation becomes an admitted problem. >>
so if someone believed hyperinflation were coming, would they want to snap up as much real estate as they can?
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Yes; "relatively" short lived.
BUT, I keep telling folks, just like I did in 1980, looking at the "fundamentals"
of a failed fiat currency - when that currency is the USD - is the road to personal
bankruptcy.
Inflation hedges are best-priced - and most safely put on - when deflation is
near its peak and the pain to working folks is the greatest. We are not really
very close to max-pain on that front, yet.
Housing prices have to fall another 20% to 50%, before the "mortgage mess"
self-corrects. Collateral values must exceed the mortgagees' basis in the
paper, or the paper will always be at risk..........AND, new paper will be hard
for mortgagors to issue.
......
(Primer: mortgagor = borrowing home-buyer................mortgagee = bank/lender/paper-holder.)
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Yes. .......... BUT, ONLY if they can use borrowed money to do so.
That is how ALL of us got our "free" houses in 1980. We had as many
mortgaged properties as we could get, AND we had been hoarding
PMs for years. When PMs spiked, we dumped the metals and paid
off the mortgages on our real estate.
The problem/challenge NOW is trying to figure out how much real property
has to decline in order to make it a "near slam dunk." We don't have to
guess "perfect," but we need to guess as close as possible.
We want deflated real-property that we OWE money on. We want PMs
that were bought "cheap." When the PMs hit the sell numbers, we want
to use that cash to pay the mortgages off.
Rinse and Repeat.
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EDITED To Add: Through March/April of 2008, TONS of folks dumped metals
and paid-off their mortgages.
It is not possible to predict "how often" the program can be implemented,
but it is safe to say that cycles and waves repeat themselves.
"Exit Strategies" are about moving your money from one place to another
where it will better work.
2005-2006 was a good time to sell real-property, and buy PMs. The
opposite opportunity will come, BUT I have no idea exactly when. I think
I will know it when I see it.
There was a good amount of inflation when oil went from $100 to close to $150 due to the fact that all goods that need to be transported have to factor in the transportation costs.
The printing of more money could very well cause a good amount of inflation long term.
"Better bend over because the government of the people, by the people and for the people doesn't represent the wishes of the people any more."
By the way the ending of the Gettysburg address inscribed on the Lincoln Memorial has now been edited to read: and that government of the attorney by the attorney for the attorney, shall not perish from the earth.
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It is always important NOT to confuse "price inflation" with the kind of
inflation - "printing press inflation" - that primarily interests us here in
relation to PMs.
Price-Inflation can, oddly, be a deflationary signal. Consumers must
liquidate "hard assets" to fund the purchase of commodities they
need to survive. This phenom can cause "hard assets" to deflate
as more of them come to market.
Printing Press Inflation - the CORE of the PM-bulls' mantra - is, on
a "fundamental" level, ALWAYS inflationary. The problem is and will
continue to be that "defenders" of the system of things will always
have policy adjustments that they can impose to DELAY the final
reckoning. THAT is why we cannot rely on fundamentals to make
money in PMs. We will be "right," but we will be broke.
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For those who don't know my position:
I think everybody should ALWAYS have some physical PMs. "Some" is relative to each person's comfort level.
I think folks who want to make a lot of money on PMs need to trade them in/out/long/short.
I am NOT "anti-bull." I am against putting all the eggs in one basket and clutching the basket to tightly.
No.
No.
<< <i>Due to all the government spending and printing of money, or will they keep a handle on it . q]
Yeah, they've got a handle on it all right.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
It should last through the early part of '09, IMO.
Then I do expect 20 and 30% inflation for a few years.
The Fed will tell the sheep that we are only at 6% inflation and people out of work will drop off the rolls every 6 months, so that will be kept artificially low.
Precious metals will only go up over the next few years, particularly silver and gold.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>I think we are already in a deflationary state. >>
I haven't noticed the price of anything except real estate go down.
Deflation in soft commodities is here.
The signal was the first implosion of POT and MOS.
..........
Gasoline could surprise on the downside, soon.
By cheapening the value of all assets valued in dollars,
such as stock, homes, bank accounts, bonds, CDs. The
Government does not have to raise taxes . It is easier
to just diminish your assets by 20%. This fact has been
known since ancient Rome when silver coinage was replaced
with lead coins which were giving a silver wash. It would seem
that we citizens, have not learned our history lessons.
In an inflationary environment , the Government doing the excess
printing, gets the full value of the newly printed bills. However those
of us at the end of the line get devalued bills as well as the loss of value
of our assets. While inflation is good for the people in debt, it is terrible for
folks on fixed incomes, the average wage earner and the Nation as a whole.
Camelot