This Is Worse Than A Depression

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How We Get Inflation

Our government is bankrupt many times over (see Spiraling to Bankruptcy) as are the democratic socialist states of Europe (see Welfare States – R. I. P.) are in the same condition. For political reasons, none of these countries is either willing to cut back on their spending or accept a recession.  Mish provided a description of both the US and Europe (my emphasis):

For Europe, $1 trillion is not enough, nor would $10 trillion. There is no plan that can possibly work. But that will not stop politicians from trying. Politicians do not care about math or logic, or the fact that piling on more debt cannot possibly be the cure for a problem of too much debt with no possible way to pay it back.

We are witnessing the death of democratic socialism. No politician wants it to happen, but none can prevent it. We are at the point where the Ponzi concept of “extend and pretend” has been extended beyond social commitments and banking systems to entire economies. We are approaching what Ludwig von Mises described as “the crack-up boom”:

There is no means of avoiding the final collapse of a boom brought about by credit [debt] expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved.

Political cowards around the world have chosen Mises’ second outcome – “a total catastrophe of the currency system involved.”

None of the countries have the resources to continue to fund current programs. As their economies deteriorate, they will “print money” in order to continue meeting obligations and stimulating. At some point, the money supply will explode vis a vis the goods available.

We have seen many “impossibles” in the last couple of years. Be prepared for the next — a hyperinflationary depression. It is not impossible, it is not an oxymoron and it should surprise no thinking economist. It is nearly upon us.

Your lifestyle will depend on how prepared you are to meet this newest, biggest and most horrific Black Swan. This beast will destroy economies, overthrow some governments, and alter the nature of the world.

Wake up people! Your politicians have no intention of heading this off.

This post originally appeared on American Thinker.

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