Market Thoughts and Analysis: US Dollar Count Updates

Thanks Dark for the heads up on this post from BINVE over at Market thoughts and analysis. Absolutely in line with my thinking. The only thing I would add is that "Stagflation" could easily become a hyperinflationary depression as described in this must read piece by the venerable John Williams at Shawdowstats.com.

Here an excerpt from BINV's fantastic post:

Market Thoughts and Analysis: US Dollar Count Updates:

"I do think that most inflationists discount the amount of debt that is collapsing (even though most deflationists use measures like M2 and M3, which have a lot of non-monetary components to prove their point) while at the same time most deflationists discount the amount of monetary inflation the Fed can generate (they argue that the Fed creating base money is like pushing on a string because the banks don't have to lend, even though I am many others have pointed out that the Fed has gone around the banking system and has started monetizing private sector debt directly, which is a trend that is likely to increase not decrease). Most people on either side of the debate is not considering strong evidence that both forces are significant."

And here is a section from John William's post, HYPERINFLATION SPECIAL REPORT:

"The U.S. economy is in an intensifying inflationary recession that eventually will evolve into a hyperinflationary great depression. Hyperinflation could be experienced as early as 2010, if not before, and likely no more than a decade down the road. The U.S. government and Federal Reserve already have committed the system to this course through the easy politics of a bottomless pocketbook, the servicing of big-moneyed special interests, and gross mismanagement.


The U.S. has no way of avoiding a financial Armageddon. Bankrupt sovereign states most commonly use the currency printing press as a solution to not having enough money to cover their obligations. The alternative would be for the U.S. to renege on its existing debt and obligations, a solution for modern sovereign states rarely seen outside of governments overthrown in revolution, and a solution with no happier ending than simply printing the needed money. With the creation of massive amounts of new fiat (not backed by gold) dollars will come the eventual complete collapse of the value of the U.S. dollar and related dollar-denominated paper assets."


What say ye!?!  It's hard to resist the urge to sell everything and build a bunker that is "off the grid".  Don't get me wrong, I want to believe we can transition through this period in a (mostly) cordial manner..so I'll hope for the best..while planning for the worst.