Saturday, September 25, 2010

How Hyperinflation Will Happen In America..The Government Can't Stop It...

Right now, I’m guessing that sensible people who’ve read this far are dismissing me as being full of shit—or at least victim of my own imagination. These sensible people, if they deign to engage in the scenario I’ve outlined above, will argue that the government—be it the Fed or the Treasury or a combination thereof—will find a way to stem the panic in Treasuries (if there ever is one), and put a stop to hyperinflation (if such a foolish and outlandish notion ever came to pass in America). 
Uh-huh: So the Government will save us, is that it? Okay, so then my question is, How? 
Let’s take the Fed: How could they stop a run on Treasuries? Answer: They can’t. See, the Fed has already been shoring up Treasuries—that was their strategy in 2008—’09: Buy up toxic assets from the TBTF banks, and have them turn around and buy Treasuries instead, all the while carefully monitoring Treasuries for signs of weakness. If Treasuries now turn toxic, what’s the Fed supposed to do? Bernanke long ago ran out of ammo: He’s just waving an empty gun around. If there’s a run on Treasuries, and he starts buying them to prop them up, it’ll only give incentive to other Treasury holders to get out now while the getting’s still good. If everyone decides to get out of Treasuries, then Bernanke and the Fed can do absolutely nothing effective. They’re at the mercy of events—in fact, they have been for quite a while already. They just haven’t realized it. 
Well if the Fed can’t stop this, how about the Federal government—surely they can stop this, right? 
In a word, no. They certainly lack the means to prevent a run on Treasuries. And as to hyperinflation, what exactly would the Federal government do to stop it? Implement price controls? That will only give rise to a rampant black market. Put soldiers out on the street? America is too big. Squirt out more “stimulus”? Sure, pump even more currency into a rapidly hyperinflating everyday economy—right .

Read more:  Here..


  1. Hyperinflation,Hyperdeflation (I make this up as I go along)are small bumps in the road compared to the global financial cataclysm we may be facing.

  2. 3 union banks failed and seized by the government. It is costing the taxpayers around $30 billions.

  3. Good article, his logic is possible, I highly recommend reading this completely.

  4. Maybe someone want hyperinflation or the system to collapse and then rebuild a new order out of the chaos. Of course they may wait a little while for some of the population to die by various means.

    Martin Armstrong makes a good point about the $600 1099 reporting in his latest writing last 3 pages.

  5. Anon at 6:55,
    1099 $600 reporting will be repealed.

    The 1099 Insurrection

  6. Some of you may want to note that the article's discussion is regarding the attempts by the Fed to help SAVE the system. The fact that they CAN'T save the system does not mean they are attempting to bring down the system. Almost every indicator points otherwise. They have managed to drag it on much longer than I would have expected. But I guess Rome never burned over night either.

  7. I believe religiously in Austrian Economics .
    An end to fiat paper money issued as debt!
    Make only precious metals the only currency !

    Restart a pure capitalism.

    Say ,I have twenty ounces of gold that I bought for less than 20,000 dollars .
    In a free market, if this gold was to be valued at its “true value” say,$50,000 an ounce I will be a millionaire .

    Wine women and song will flow for the newly rich me.
    And everybody without gold can kiss my kingly boots.
    Everybody that does not have gold can go to the wall bankrupted by debt paper.
    Real money will be king
    With fractional reserve usury lending for gold possible still in a de-regulated market ,even if not officially sanctioned ,my million dollars in gold will be worth even more millions on loan !

    My gold will grow and self expand its value.

    No real work required!

  8. That is until someone snatches it from your rigormortised fingers. Those who brag the loudest will deserve it the most.

  9. I just don't follow that Gold and Silver thing ... if its going to be that bad, who is going to buy or trade your metal anyway??(plus you know they can manipulate gold /silver value, should be much higher already) Is it really gonna bring foods to your table or safety?

    Wine,women and song .... your pathetic, if you really have gold great for you... hide it and stop bragging about it you sound like idiot.

  10. 7.01
    Why is 7.55 an Austrian economics idiot?
    when you yourself say the value of gold is being manipulated .

    " (plus you know they can manipulate gold /silver value, should be much higher already)"
    Seems like, while you engage can engage in personal attacks ,you do not follow the logic of your own beleifs on the "real value" of gold.

    The rich can live in gated communities
    and do not depend on individual gun protection ,thats what the arned state and police exist for.
    The unspoken element or premise left out of the jeffersonian draft of the declaration of independence /constitution, is property protection ... perhaps you think it was all about abstract 'human rights" .
    "life liberty and the pursuit of happiness".
    Old Common Law stuff!
    But property/capital is the real king when it has an armed state to enforce its own rights to rents and usury.


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