from NewsGoldSeek Website
Since hyperinflation is clearly in our future,
let's talk about what inflation really is, what causes it, what the
different degrees or levels of inflation are, and what it takes to put a
stop to inflation?
People can raise prices all they like, but if
there is not enough money and credit available to purchase their goods and
services at the prices they are charging, they will eventually have to
either lower their prices, or expect to make far fewer sales.
As their money is sidelined with the Fed to sterilize it (i.e. to keep it from stoking inflation) the smaller fry who depend on them for their supply of financial capital are being allowed to die of money and credit starvation so the anointed can purchase the most valuable parts of their financial carcasses at pennies on the dollar via bankruptcy auctions and fire-sales in a blatant attempt to eliminate their competition and consolidate their power.
This deflationary contraction in the supply of money and credit due to the exposed loan, mortgage and derivative fraud is a strong undertow to our economy which threatens to drag it out to sea until it runs out of air and drowns. The Fed must therefore inflate and swim for shore, or die. And inflate they will. We can absolutely guarantee it.
Obama will go down in history as the
King of Stagflation, as he joins forces with the inimitable Gordon
Brown, the King of Fire-Sale Gold.
However, the microeconomic factors which determine prices for goods and services are by far trumped by the macroeconomic factors of supply and demand.
The supply side on a macroeconomic scale
is determined by the amount of goods and services that are produced for sale
in the overall economy. The demand side on a macroeconomic scale is the
amount of money and credit available to the overall economy with which those
goods and services can be purchased, or expressed another way, the amount of
money and credit that is available to chase after those goods and services.
The Fed cannot suppress the price of all goods and services as it rampantly expands the supply of money and credit, and can only influence a chosen few, such as gold and silver, which are suppressed because they are the canaries in the coal mine. When everything else gets more expensive, and as fiat currencies are shown to be the "worthless paper" they really are, gold and silver will become the only real safe-havens from the resulting inflation and financial deterioration.
That will then generate a demand for precious metals that is so great, it will drive the price of gold and silver up until they catch up with the overall supply of money and credit, and there is nothing the Fed can do to stop it, short of pulling the plug on money and credit and destroying our economy, along with the privately owned Fed itself and its Illuminist cronies with it. This eventual destruction is planned to be sure, in order to pave the way for a one world Orwellian police state.
The trick for the Illuminists is how to get out of their paper assets and convert them to real assets on the cheap before pulling the plug on money and credit.
The problem is that as they bail out of paper, and into tangible assets, along with other foreign creditor nations anxious to trade their "worthless paper" in for things of real value, their bailing activities will drive inflation, and the price of gold, silver and other tangible assets, to unheard of levels, thereby dramatically decreasing the amount of tangible assets that they can absorb with their dollar reserves and their sales proceeds from the dumping of paper assets.
The US and its creditors will be competing with
one another in the race to dump dollar-denominated paper assets in exchange
for precious metals, commodities, real estate, factories and equipment and
other tangible assets, as well as shares in companies which own such assets,
including shares in gold and silver producers.
They will use their sales proceeds to buy all the real, tangible assets they can get their hands on and leave everyone else holding a bag full of "worthless paper," aka Federal Reserve notes, US Treasury bonds and GSE bonds. But the amount of "worthless paper" is so great, and there are so many substantial players who will be trying to do the same thing, that market chaos will result, and the paper assets will deteriorate, and the price of tangible assets will simultaneously appreciate, at a rate that leaves everyone breathless.
Truly, this will be a situation where he who
loses the least, and he who buys gold and silver and their related shares
early on, are the ultimate winners. The biggest losers will be those who
fail to take physical delivery of their precious metals, such as gold and
silver ETF shareholders and holders of mint certificates, who will be
thoroughly Madoff'd, as well as holders of any leveraged gold and silver
futures positions who will be wiped out by manipulations before the final
run-up, thus losing all their investment capital.
There is only so much gold to go around, and when all the big players become gold bugs themselves, gold, and also silver, will go ballistic. They want the gold mine (literally), while you get the shaft. That is, has been, and always will be, "The Plan."
Bernanke and Geithner are now Obama's twin
Tattoo's, with our apologies to the producers of "Fantasy Island," a show
which has become a perfect metaphor for what the US economy with its
so-called "Green Shoots" has become. De plan, boss, de plan. De plan indeed.
In fact, in the past when we still had a modicum
of integrity in measuring economic statistics, inflation was defined as an
increase in the supply of money and credit, period. Higher prices were
simply a symptom of inflation, not a definition of inflation. The supply of
money and credit was what was inflated, not the prices of goods and
services, which simply rose as a direct outcome of the inflated supply of
money and credit.
All major US inflationary issues and debacles
can therefore be squarely placed at the doorsteps of the Fed, and of our
Treasury Department, which is little more than a doormat for the Fed, which
together with Wall Street, runs a revolving door with the Treasury. In fact,
our current Treasury Secretary is the former President of the New York
branch of the Federal Reserve Bank. So much for checks and balances and
avoidance of conflicts of interest.
Based on all the foregoing, we'll give you three
guesses as to what the outcome will be somewhere down the road when the
Fed's ever-burgeoning money blob starts chasing after a shrinking supply of
goods and services.
The temporary bout of minimal inflation caused
by the anticipatory increase in the supply of money and credit is offset or
absorbed by the greater pile of goods and services that is accumulating, so
prices remain stable over time. This is obviously not an exact science, so
there are some up-ticks if the money supply grows a little too fast, but
over time this can be corrected. It is best to overshoot a little so as not
to start an economic contraction, which, if left unchecked, could lead to a
recession or depression.
What the Illuminati have done for over 20 years now, was to have the Fed, which they privately own, raise the level of growth in the supply of money and credit to ludicrous levels, while they simultaneously ordered their lackeys at the BLS to lie about the rate of the resulting inflation by using hedonics (statistical manipulations) that were intended to greatly understate inflation.
As a result, when real GDP was calculated, the
GDP deflator, which is based substantially on the official (and falsely low)
rate of inflation, and which is used to calculate real GDP, was obviously
far too low. This farce resulted in higher levels of real GDP than were
warranted by the data, because inflation was not being properly taken into
That means all the growth in our stock markets since the early 1990's has been nothing but false puffery, which resulted from profligate growth in the supply of money and credit, and not from growth in production. For this reason, when the Dow finally bottoms, we expect it to track back to its levels during the early 1990's, which means roughly 2,500 to 3,500. That level will destroy everything, especially the wealth of our middle class, but the elitists themselves are going to take it on the chin.
They are afraid the system will implode before they can bail, and that they will go down with the ship also.
We wholeheartedly confirm their fears.