John Williams publishes the Shadow Government Statistics newsletter (www.shadowstats.com).
-- We will see inflation levels "not seen in our lifetime" ...
-- We will see debt explode to $65 trillion (4x U.S. GDP; more than global GDP).
-- We will see hyperinflation such that the dollar becomes worthless and "the paper is worth more as wall paper than as currency"
( Snippet of Interview)
HJR: They couldn’t even use the money as toilet paper because it is a bad absorber of water. So we will have hyper-inflation. How can we protect the value of our assets, assuming that people have some discretionary money? Should they buy growth stocks because they are cheap, assuming “buy low, sell high?” Or are there better alternatives?
JW: We are headed into a hyper-inflationary depression that will become a Great Depression. When hyper inflation hits, it will disrupt the normal flow of commerce and turn it into a Great Depression.
What about paper assets based on the dollar? You want to get into something like gold or silver –physical gold or silver, not paper. Perhaps get some assets outside the dollar. It’s a time to preserve your wealth and assets, not to start speculating on the stock market. There is a lot of volatility ahead. Over the long term, gold and silver are your best hedges.
HJR: That sounds like the familiar tune I’ve been singing for several years. I’ve been publishing for 33 years. About 11 of those years I have been bullish on gold and silver as investments. When I abandoned gold in the early ‘80s, I was excommunicated from the gold-bug church because I was supposed to stay faithful to gold, but then the metals weren’t the right place to put your money. As a financial adviser, if I don’t have subscribers in the right investments, they will lose money and not renew their subscription to The Ruff Times. So I have a financial interest in being right. Yogi Berra said, “It’s déjà vu all over again.” the same thing is happening that I saw in the ‘70s that drove the prices of gold and silver to unprecedented highs – only more so now. They are creating more money than they ever thought of creating back then. We are using words like “trillions,” which we never used before. I’m not just looking at it as an investment and a place to make money. I am looking at it as a possible way to preserve the real value of your assets so you are not left destitute with a pile of worthless paper.
You showed me a display of Zimbabwe currency, where multi-billion dollar notes started out as $2-bill notes. We could face the same thing. The world is littered with worthless dead-paper currencies with an average life span of about 75 years. It’s always the same: we make too much of it ever since we created paper currency with the printing press, and creating too much of it to buy votes, diminishing its value.
A subscriber who wrote to me recently asking me that if the government and the bankers can manipulate the price of gold and silver, so couldn’t they do that for many years and gold and silver would go nowhere?
History doesn’t record a single example when a society inflated the dominant currency even near the quantities we are creating dollars now without destroying its value. Gold and silver, not being anyone’s debt or obligation, is where people ought to put their money.
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To the author of this blog,
ReplyDeleteI sincerely want to thank you for bringing articles like this to our attention. I must admit, some of your article I do find rather ludacrious, however, more often than not, you have provided such good articles, like this one by John Williams.
I have been following John William's work for a while now and have tremendous respect for him. Unfortunately, I can never keep track of all the interviews, editorials he does.
Again, thank you very much for this blog, and thank you for bringing this article by John Williams to our attention.
I swear, I should just get rid of my cable, I get all my information from financial blogs rather than the Obama-Public-relations-firm known as "MSM".
There has never been a paper currency, that has severed its ties from redeemable silver or gold, that has survived the test of time. All fiat currencies eventually debase to a value of zero. Always.
ReplyDeleteWe are now experiencing that tipping point in our financial model today. It is now only a matter of time before the enormous debt destroys our economy and living standard.
From 1792 to 1913, this nation enjoyed stable currency valuation. The Federal reserve bank was formed in 1913 and it has been a steady degradation of currency stability since that time.
This does not occur because of secret societies attempting to subjugate the masses. This occurs simply because mans greed for wealth and power trumps integrity and honesty.
The federal government will learn that you can't get out of a debt problem by creating more debt.
ReplyDeletewe got rid of the tv service about a year ago and our landline - do not miss them a bit- we are pulling out of this system more and more - I hope millions are storing food as it will be needed for survival - there is plenty of bs on the internet, but also some honest folks - that cannot be said about msm - and thanks to info online, a couple years ago, I got out of paper assets and started stocking up - the American empire is going down, but how fast and in what ways, we cannot know exactly - it is best to do what you can for you and yours -
ReplyDeleteI think this flu business is bio war against us - any vaccines are to be avoided at all costs - these bastards are truly the enemies of humanity - take care - it's a jungle out there- as a side note, I read online that obama was shown around a museum in mexico city by an archeologist who died the next day from the flu. That is highly suspicious and I have not seen any postings on msm sites. Anyone know about this???
The banks are insolvent and the problem is too much debt, not too much money.
ReplyDeleteThe price of gold is far too volatile to ever be considered a suitable alternative to the dollar. Moreover, there is a high mark up when purchasing gold and a low mark down when selling the commodity. At this point, I would recommend holding either cash or short term T-Bills. Above all, avoid keeping money in the banks and credit unions if possible!
ReplyDeleteRick, gold is not volatile, only the paper currencies that are used to gauge the price of gold are. The prices don't fluctuate because gold is volatile, but because the paper currencies are. When the paper currency (the dollar) loses virtually all its value, gold will shoot sky high. Only after markets have stabilized in a few years, will it be wise to sell and get back into stabler currencies again. Having said that, I'm more bullish on silver than gold.
ReplyDeleteCash and T-bills? They're not going to be worth a damn thing.
T-bills and cash over silver and gold? Everyone is entitled to their opinion but wow that is financial suicide in my opinion.
ReplyDeleteTBs and cash could easily be worth ZERO a year from now (Zimbabwe here we come) while G/S will be worth something. Something is better.
Love the Business Sucks sale sign.
ReplyDeletePasserby & Anonymous: Assuming you're both right on the eventual demise of the dollar (and there are pros and cons to this argument), you haven't addressed my second contention: There is such a high mark up when purchasing gold and such a big mark down when selling the gold that about half the money is swallowed up just in these two transactions alone! Moreover, there is nothing to prevent the U.S. Treasury from forcibly confiscating gold from U.S. citizens just like it did in the 1930's!
ReplyDeleteMy answer is the premium on the spot really isn't that much. Even if it were, $900 is peanuts to where I think gold will go. Better yet, get silver which is insanely cheap. But, more importantly, there may come a time when it becomes actual barterable or tradeable currency on the underground market. That's a worst case scenario. If you're worried about your "money" being wasted, your paper dollars aren't going to be worth anything anyway, so quibbling about a $20 premium won't mean much in 2-3 years.
ReplyDeleteAs for confiscating gold, to me, it doesn't make much sense. Could they? Sure. But the dollar peg affects the whole world and world governments aren't going to confiscate it. The rest of the world would find it amusing if the U.S. tried to confiscate it. It would only drive its value up. But, even if they did, only a fool turns his in. You use it in the black market.
Passerby: I still have lingering doubts as to whether the little guy is going to get a fair shake after he comes through the wringer during the purchasing and eventual selling of gold. It seems to me that the middle man (dealer, trader, bank, etc.)is going to get a far better deal out of it. As per the confiscation of gold, President Roosevelt did it in 1933. Here is a link to the referred Gold Confiscation Order of April 3, 1933. http://www.the-privateer.com/1933-gold-confiscation.html
ReplyDeleteRick: of course, the banks and dealers get a better deal out of it. They're the ones producing it and buying/selling it. There's not enough gold to go around, so I don't think they care too much about a few people doing well with gold.
ReplyDeleteI'm well aware of the confiscation in the 30s. Like I said, it's possible, but a) a lot of things have changed 80 years later, and b) even if they confiscate it, only a fool turns his in. Keep it and use it on the black market.
If you're worried about gold, get silver. It's a steal anyway.
I belive: " If you don't hold it, you don't own it." I think this is a very important moto to live by. There is so much double talk on T.V. and the internet. I can't see any value in a piece of paper telling me I own a small part of a corporation. I think more people realizing that the crooks are in charge.
ReplyDelete" A bird in the hand is worth two on paper."
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