Tuesday, September 14, 2010

John Williams: Hyperinflation 6-9 Months From Today

John Williams, arguably one of the best trackers of real, unmanipulated government data via his Shadow Stats blog, has just released a note to clients in which he warns that hyperinflation may hit as soon as 6 to 9 months from today. With so many established economists and pundits seeing nothing but deflation as far as the eye can see, and the Fed doing all in its power to halt the deleveraging cycle, both in the open and shadow economies, what is Williams' argument? Read on. Incidentally, even if some fellow bloggers disagree with Mr. Williams' assesment, we believe it is in our readers' best interest to have them make up their own mind on this most critical economic development.
Systemic Turmoil is Unthinkable, Unacceptable but Unavoidable.  Pardon the use of the Aerosmith lyrics in the opening headers, but the image of tap-dancing on a land mine pretty much describes what the Federal Reserve and the U.S. Government have been doing in order to prevent a systemic collapse in the last couple of years.  Now, as business activity sinks anew, much expanded supportive measures will be needed to maintain short-term systemic stability.  Such official actions, however, in combination with global perceptions of limited U.S. fiscal flexibility, likely will trigger massive flight from the U.S. dollar and force the Federal Reserve into heavy monetization of otherwise unwanted U.S. Treasury debt.  When that land mine explodes — probably within the next six-to-nine months, the onset of a U.S. hyperinflation will be in place, with severe economic, social and political consequences that will follow.  The Hyperinflation Special Report is referenced for broad background.  The general outlook is not changed. 
What does this mean for US financial markets? (take a wild guess)


  1. deflation is the only possibility. history says so.

  2. Every 6 months somebody says this lol.

  3. 2:34 and your education is...? History is different now. Governments have never borrowed so much money. The world has changed, environmentally, financially, etc. They problems will just be MUCH bigger now.

  4. 2:39 GOLD and SILVER has never been this high. ($50 spike in SILVER was only just that) Which means the dollar is getting much worse and faster now. Your lol will be OMG.

  5. 239 - Who are you to comment and lol? Do you have John Williams' background and reputation? Put you creds up on the board and we'll see if you are even worthy of commenting. If not, STFU.

  6. The 21st century will be remembered for the fall of all social order. The next 60 to 90 years will be about synthesizing what man has developed technologically, philosophically, and spiritually in the last 100,000 years and assembling a new order with it amidst absolute chaos.

    It is quite perspicuous what is transpiring - the old world is dying. The solution? Death is inevitable in all things. Past that comes rebirth, a new world with a much higher potential as the basis will come about.

    What it will look like or what the time frame will be for all this to happen is fogged in ambiguity. Nonetheless, for people who still believe there will be an eventual recovery or a magical deliverance to the old ways of the USA good luck.

  7. yeah 3;01 has it, this current form is passing and a new form is here, only it's not really new nor good, but anyway as the now form dies, can't there be both deflation in certain assets useless, and inflation in assets needed/demanded?
    food is up, rental/overbuilt houses are down, too many houses so down, various causes and fear things perceived as needs up, and as the old way dies more of this. as people see this happening stocks down, fuel up, CRE down, aerable land up, big screens down, ammo up...as it dies people will lose confidence in paper IOU's

  8. John Williams has been pushing the HyperInflation theory for awhile now. Mish Shedlock is one the people who adamantly believes that the Inflationists have it wrong. He strong believes as do others such as Robert Prechter that it doesn't matter how much money the government prints, if nobody is borrowing the money their is no Inflation.



  9. Shedlock is a mental case and does not know what he is talking about

  10. 520: LOL! ZeroHedge said the same thing about Mish today! In fact, it was in reference to a long post about John Williams' latest prediction.

  11. There are two ways to get currency into circulation in a debit based economy. Loaning it out or debasing the currency by open purchasing of all gov. debt by the central bank. If no one is borrowing, you cant get $$ into circulation and the result is deflation. If you do the latter, the currency is debased and rich people loose their $$$.
    Do you really beleave that is going to happen? With deflation, rich people's money is worth more and can buy cheaper assets. With hyperinflation, rich people are in the same boat as the rest of us and are chasing assets with $$ worth less and less.
    Pundants that say something is going to happen by X date are setting themselves up for failure. And their followers.

  12. Ok, I have been following this blog for a long while along with many others. Alot of people are saying the crash is coming and point to articles where others are saying the same thing, but in this case, someone saying something is going to happen is not the same as evidence.
    I'm not saying I dont believe we're in trouble, or that the system is heavily flawed but everyone else seems to be going on with their lives doing the best that they can for themselves and their families.
    I guess at the end of the day no one knows whats going to happen tomorrow.

  13. I agree with the above comment that if the rich are running the show, the last thing they want to do is destroy the value of their money. I have always wondered why those that believe that the government is going to purposely destroy the currency through hyperinflation would? If you follow those sort of conspiracies than it would be much more in the governments interest to create deflation. You than have an entire population of deep in debt serfs to do your bidding.

  14. In the Weimar Republic, inflation did not occur until the people lost faith in the currency and started dumping paper currency for tangible assets, like food, shovels, pans, clothes, etc etc, even though the German Gov was printing wildly before that.

    The Fed is creating money wildly right now, and we could still have deflation until the masses and or other countries start to unload dollars.

    When everyone and their brother wants to get rid of their dollars, then inflation will happen and probably very quickly.

    At some point after TSHTF then some sort of bank hioliday will be declared and a new currency will be introduced, possibly with a new form of Gov and who knows what else is planned.

    But the Rich as they are referred to are just slaves that have a little more than the rest of us, they are not the super elite.

    Then very wealthy in Germany were wiped out by inflation along with the pauper, and the rest is history.

    S keep enough cash to make life work and choose wisely what tangible things to aquire, Gold and Silver are just a small part of what you will want to have.

    Turn off your main circuit panel and live for a week in your place and it may open your eyes.

    Keep good friends and connections open, in every collasped society it comes down to people.

    People make all things go.

  15. 6:43 Some good advice and yes the people losing faith in the currency will be a big problem (why they buy silver and gold ... all currencies are falling to gold right now) and making sure you now your friends and neighbors that you can rely on is a good idea. Also turning or electricity and water and seeing how you fare is good think to do.

  16. good posts
    right germany happened in a week
    buy gold silver
    27 dollarspike something is goin on and it aint
    a rebound

    things will get worse no jobs no future jobs just more layoffs
    this is a great depression
    makes 1930s look like a cake walk

    this party just started enjoy your collapse

    maybe the illegals will save the day
    or an obama bs speach on some useless matter

    and when war starts with the middle east
    many will be drafted

    i guess delusion of reality only helps when your wealthy enough to denie it

  17. When the value of money is inflated away your money starts to lose its value the same as the rich .
    But proportionaly they still have have more to start with.
    Even at half the old value their money is still a lot for a buy up.
    The poor living paycheck to pay check will not be left in the market place.

  18. Ah, you think so?

    I think neither scenario

    We ( as in the world ) are being bled dry sloooowly so as not to notify the host that the parasite is feeding.

    This country is so vast, so rich and so resourceful - this current feeding could last 10 maybe even 15 years.

    Get ready for a knock down, drag out slugfest of monumental proportions 'cause we are only at the beginning.

    And don't listento all these assholes - when you hear them talk - if your interested do the research; it's available. If they say massive defaltion are they heavyweight cash postions or did they just buy 2,000 oz. of gold

    etc. etc. it's really not that hard to figure out - opinons are like assholes everyones got one

    their REAL LIFE ACTIONS will tell you EVERTHING you need to know

  19. "This country is so vast, so rich and so resourceful - this current feeding could last 10 maybe even 15 years."
    The assumption and high hopes here for a slow unwind is that America is still a productive economy that produces and exchanges real wealth with the rest of the world.
    Not a great Ponzi that was running on credit.
    Foreign purchases of Government treasury bonds ,government backed Fannie and freddie housing bubble bonds that delivered the profits of its finance ,share value and housing sectors.
    The main parts of its debt bubbles.
    But,The Ponzi is dead insolvant and only runs temporarily on profits derived fom printed paper handouts from government.
    A Corporate State casino capitalism now exists.
    The banksters are getting money free at zero or near zero interest rates from the Fed.
    But they are not able or willing to loan that money out for a better interest rate return.
    Their free lunch at future taxpayers expense is proving hard to digest.
    The fed claims to have an in-exaustable printing Press that will save the Great Ponzi US and the whole world too.
    But ,how that will all play out , with deflaion,slow inflation,hyper-inflation or even government debt default ,its timing is hard to predict.
    Perhaps the timing can be measured by how fast the press can be run to try and stimulate a dead ponzi?
    Or ,perhaps how fast the Treaury and the fed purchases its own Treasury bond debts?

    The black swans circle like buzzards alongside helicoptor Ben but their feathers are dyed with red not black ink.
    Where they will land amongst all the fictional capital value assets based on unpayable debts nobody knows.
    But ,land eventualy, they must.

  20. The fed cannot stop deflation. Just check conquer the crash by Robert prechter.

  21. Wow..wake up people either way you want to look at our economy we are a sinking ship...Inflation,hyperinflation,depression,double dip recession...NONE are good and will hurt the people of this GREAT country. We need to protect the people in our own circle everyone needs to pull together by saving what they will need to survive in the next 2 to 5 years. Everyone needs to stock pile canned foods and medicine and supplies. Everyone can laugh and think I'm joking but you will be the one unprepared and starving and asking those who did for help. P.S. You can't eat gold and silver and it too in a depression means NOTHING...So if this country falls and it looks like it is on its way are you really ready...and what are you ready for? look below
    Gas prices will rise...this means your food will too.
    Health Care....crazy prices and taxes,taxes,taxes
    NO JOBS...getting worse by the day...the real unemployment numbers are around 17% and will exceed that after Jan. More and More will be unemployed.
    Our entitlement programs are going to be cut dramatically more danger coming....!!!!!
    20 New taxes or more after Jan. 1st 2011
    Our states are broke our government refuses to ever tell us the truth...so I quess I'm a dooms Day person too....Quess What? I have a lot of food an supplies just incase.. my family will survive and will come back will Yours? It is up to everyone to form a opinion about our country but I caution everyone be prepared for the worst depression ever in 2011 if it doesn't happen GREAT eat the food you stocked piled but at least you thought of your family...
    How would you feel if your kid woke up hungry or needed some medicine ad you had nothing!!! IT WOULD HURT SO BAD YOU WOULD WANT TO DIE....DONT BE STUPID PREPARE FOR THE WORST PRAY FOR THE BEST


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