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Signs Hyperinflation Is Arriving

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Signs Hyperinflation Is Arriving - by Gonzalo Lira

 

Back in late August, I argued that hyperinflation would be triggered by a run on Treasury bonds. I described how such a run might happen, and argued that if Treasuries were no longer considered safe, then commodities would become the store of value. - article continues at golzalo lira blog

 

His conclusions:

 

Therefore, I am confident in predicting the following sequence of events:

 

• By March of 2011, once higher commodity prices reach the marketplace, monthly CPI will be at an annualized rate of not less than 5%.

 

• By July of 2011, annualized CPI will be no less than 8% annualized.

 

• By October of 2011, annualized CPI will have crossed 10%.

 

• By March of 2012, annualized CPI will cross the hyperinflationary tipping point of 15%.

 

After that, CPI will rapidly increase, much like it did in 1980. 2012 will be the bad year: I predict that hyperinflation’s tipping point will be no later than the first quarter of 2012. From there, it will accelerate. By the end of 2012, I would not be surprised if the CPI for the year averaged 30%.

 

Full article at - http://gonzalolira.blogspot.com/2010/10/si...s-arriving.html

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Someone from the comments section on Gonzalo's blog posted this, apparently from Nostradamus;

 

--------------------------------------------

Century 8 Quatrain 28

Les simulachres d’or & argent enflez,

Qu’apres le rapt au lac furent gettez

Au descouuert estaincts tous & troublez.

Au marbre escripz prescript intergetez.

 

The imitations of gold and silver will become inflated,

Which after the rape [or robbery] are thrown into the fire,

After discovering all is exhausted and dissipated by the debt,

All scripts and bonds are wiped out.

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Someone from in the comments section on Gonzalo's blog posted this, apparently from Nostradamus;

 

--------------------------------------------

Century 8 Quatrain 28

Les simulachres d’or & argent enflez,

Qu’apres le rapt au lac furent gettez

Au descouuert estaincts tous & troublez.

Au marbre escripz prescript intergetez.

 

The imitations of gold and silver will become inflated,

Which after the rape [or robbery] are thrown into the fire,

After discovering all is exhausted and dissipated by the debt,

All scripts and bonds are wiped out.

 

 

cute! to be fair someone in 1920's Germany might have thought the verse applied to them. unless you can dig out a reference to 2011 and the evil man "berbanke" ..................

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Hello, Gentlemen!

 

Glad you're all enjoying my post.

 

Life has been busy as of late—which is why I haven't been commenting here.

 

But I have a bit more time now, so I'll be dropping by from time to time.

 

So about my post: Criticisms? Peeves? Praises? Concerns?

 

Please be as forthright as possible.

 

GL

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I enjoyed G's post. (Hi G!)

 

I disagree with is the prediction over such a long time frame rather than virtually overnight, even with the stealth monetization policy.

Clearly happening for awhile now...the base of the pyramid slowly erroded (lack of money loaned to businesses) while on the surface the stealth monetization masks the overall effect. Suddenly the US is swimming with no clothes and the tide is out, never to return.

 

 

LOL

Insofar as money is concerned, governments and central banks should be kept as far away from one another as a pedophile from Dakota Fanning.

 

The US owes so much at some point it will be so vulnerable that the enemies it so dilligently attempts to protect itself from will simply walk into the land. Debt could just be purchased by the highest bidder. US citizens have been fed a diet of consume without fear for so long they fail to understand that when you borrow especially from Chinese, you gonna pay somehow.

 

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Someone from the comments section on Gonzalo's blog posted this, apparently from Nostradamus;

 

--------------------------------------------

Century 8 Quatrain 28

Les simulachres d’or & argent enflez,

Qu’apres le rapt au lac furent gettez

Au descouuert estaincts tous & troublez.

Au marbre escripz prescript intergetez.

 

The imitations of gold and silver will become inflated,

Which after the rape [or robbery] are thrown into the fire,

After discovering all is exhausted and dissipated by the debt,

All scripts and bonds are wiped out.

LOL. Okay, but what about mining stocks? Hopefully those aren't considered "imitations."

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Hello, Gentlemen!

 

Glad you're all enjoying my post.

 

Life has been busy as of late—which is why I haven't been commenting here.

 

But I have a bit more time now, so I'll be dropping by from time to time.

 

So about my post: Criticisms? Peeves? Praises? Concerns?

 

Please be as forthright as possible.

 

GL

 

 

a deflationist would say that a crises in the bond market is deflationary, ie one of the biggest asset classes on the planet would be deflating. Gold is a safe haven but cant see why commodities in general would benefit. As house prices have been deflating we have not seen a move into other asset classes, it simply reduces leverage in the system. A reduction in value of longer dated bonds in particular would simply send money to money heaven faster then Benny could print and attemp to hold up their prices. So no Hyperinflation is not a high risk for now.

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Hello, Gentlemen!

 

Glad you're all enjoying my post.

 

Life has been busy as of late—which is why I haven't been commenting here.

 

But I have a bit more time now, so I'll be dropping by from time to time.

 

So about my post: Criticisms? Peeves? Praises? Concerns?

 

Please be as forthright as possible.

 

GL

 

"A lot of people claimed I was on drugs when I wrote this.

 

Now? Not so much."

 

Congratulations on controlling your drug problem..... :lol:

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Hello, Gentlemen!

 

Glad you're all enjoying my post.

 

Life has been busy as of late—which is why I haven't been commenting here.

 

But I have a bit more time now, so I'll be dropping by from time to time.

 

So about my post: Criticisms? Peeves? Praises? Concerns?

 

Please be as forthright as possible.

 

GL

Sorry, I did not find anything there that I have not read 100 times (often better supported, and more clearly reasoned) elsewhere. Well done for your economics as an alternate religion article posted on zero hedge the other day though, that was excellent.

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I have just read this article and completely agree that things will start getting out of control as the treasury bond holders realise the measly returns they are getting mean nothing when the currency they are being paid them in is being printed to oblivion.

 

 

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... And here's a stunning article from Mike Shedlock: http://globaleconomicanalysis.blogspot.com...ina-chinas.html

Mish: I am a firm believer in peak oil. I don't know how anyone can deny it. Given peak oil, and given the demand from China for oil and other commodities, the world is on a crash course of demand that cannot be filled.

 

China is growing at 8-10% a year (assuming you believe the stats). Can China keep growing at that rate forever? For even 10 more years? What about India? Brazil?

 

Either we get some serious energy breakthroughs, China slows, or the standard of living drops in the US, UK, and Europe. Well China does not want to slow, and the US and Europe are fighting hard to maintain a standard of living that is not sustainable.

 

Historically these situations end up with war. That is an observation, not a prediction.

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I thought it was a good article, well written and I agree with your timing, 2012 and not because of Mayan prophesy, just a gut feeling it would take five years from 2007 for the problems to breakout into real life rather than figures on charts. The Mayan prophesies will not doubt add to the hysteria. The prices of commodities are already rising and speculators are moving into them to catch a profit driving prices higher.

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Someone from the comments section on Gonzalo's blog posted this, apparently from Nostradamus;

 

--------------------------------------------

Century 8 Quatrain 28

Les simulachres d’or & argent enflez,

Qu’apres le rapt au lac furent gettez

Au descouuert estaincts tous & troublez.

Au marbre escripz prescript intergetez.

 

The imitations of gold and silver will become inflated,

Which after the rape [or robbery] are thrown into the fire,

After discovering all is exhausted and dissipated by the debt,

All scripts and bonds are wiped out.

Haha!

 

And when is century 8 quatrain 28 ?

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Haha!

 

And when is century 8 quatrain 28 ?

This page gives the translations for all the Nostradamus Quatrain's. It appears that century 8 quatrain 28 is indeed the above, trouble is the dates are open to interpretation.

 

http://www.nostradamusquatrains.com/Century8/Quatrain28.htm

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"Signs Hyperinflation Is Arriving, Gonzalo Lira predicts hyperinflation"

 

Erh, ah, we are seeing signs of RISING inflation in food and other commodity prices.

 

Meantime, the Fed is targetting a meaningless number, "Core inflation", which contains useless components like "owner equivalent rents", which is derived from (falling) home prices.

 

The market will eventual teach Bernanke a lesson, if he sticks to such a foolish target

 

The Fed needs to "get with reality", a look at meaningful inflation numbers

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"Signs Hyperinflation Is Arriving, Gonzalo Lira predicts hyperinflation"

 

Erh, ah, we arte seeing signs of RISING inflation in food and other commodity prices.

 

Meantime, the Fed is targetting a meaningless number, "Core inflation", which contains useless components like "owner equivalent rents", which is derived from (falling) home prices.

 

The market will eventual teach Bernanke a lesson, if he sticks to such a foolish target

 

The Fed needs to "get with reality", a look at meaningful inflation numbers

Thing is, Dr B. I am convinced the fed WANTS higher infation, they just want to be able to cover it up in a meaningless CPI number.

So far they are succeeding.

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Thing is, Dr B. I am convinced the fed WANTS higher infation, they just want to be able to cover it up in a meaningless CPI number.

So far they are succeeding.

Like the UK, the US is trying to save its banks.

To do that, they need to keep asset prices (mainly properties backing loans) from falling too much

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Thing is, Dr B. I am convinced the fed WANTS higher infation, they just want to be able to cover it up in a meaningless CPI number.

So far they are succeeding.

But what have they really achieved other than the goosing of commodity prices? Is it sustainable?

 

And it has to be a worry that every man and his dog on Wall Street are short the dollar.... not a worry for the dollar, but that near everyone is herded into this trade.

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But what have they really achieved other than the goosing of commodity prices? Is it sustainable?

 

And it has to be a worry that every man and his dog on Wall Street are short the dollar.... not a worry for the dollar, but that near everyone is herded into this trade.

I don't think currency trading is quite as prevalent as you think. The is no way you could describe it as everyone and their dog being short. I would admit the most wouldn't be chose to be saving in dollars though.

 

We will find out how sustainable QE to infinity is next week.

 

 

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I don't think currency trading is quite as prevalent as you think. The is no way you could describe it as everyone and their dog being short. I would admit the most wouldn't be chose to be saving in dollars though.

The thing is the hyper-inflation trade is too well correlated to the conventional inflation trade going on at the moment [into emerging markets/ commodities in general]. There is nothing very contrarian about it. Surely, this should be ringing a few alarm bells.

 

The general rule of thumb is the market likes to inflict maximum pain... this usually blindsides the mass of investors who have becomes complacent/ certain.

 

It wouldn't surprise the contrarian in me if the coming FOMC meeting upsets the present consensus.

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The thing is the hyper-inflation trade is too well correlated to the conventional inflation trade going on at the moment [into emerging markets/ commodities in general]. There is nothing very contrarian about it. Surely, this should be ringing a few alarm bells.

 

A general rule of thumb is the market likes to inflict maximum pain... this usually blindsides the mass of investors who have becomes complacent/ certain.

 

It wouldn't surprise the contrarian in me if the coming FOMC meeting upsets the present consensus.

I think you will find that the consensus is thinking we will be seeing massive deflation over the coming years with everything getting cheaper. Of all the people I speak to in general life, most are completely unprepared for inflation in everyday things, where as if deflation happened it wouldn't be so much of a problem for them. Deflation is more a problem for the fat controllers and the banks.

 

I can't wait for this old inflation/deflation debate to be settled as it has been grinding on for years. IMO when it comes down to it the fat fiat controllers can not allow deflation to take hold, as all debts become more unmanageable. This is quite simple really I don't see why deflationists can't see it. They have their fingers on the trigger and can create inflation at will, they can also hide it in their statistics so that the general public doesn't realise until it is too late.

 

I bet you wish you had kept some of that risky silver rather than your safe haven dollars over the next few weeks. :P

 

 

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