I think this one is right on the money the government will demand and the Fed will acquiesce in even further expansions to the money supply via direct purchases of these government bonds, formerly held by our overseas trading partners. This will produce even higher levels of inflation, of course. Then, in order to prevent the loss of purchasing power by politically connected groups, the government will print even more money to fund special payouts to these groups. For example, government will demand that Social Security beneficiaries get their automatic increases; likewise for the quarter of the population getting disability benefits. Military and government employee pay will be increased. Funding for government cost-plus contracts will ratchet up. As the dollar drops in value overseas, local purchases by our overextended military will cost more in dollar terms (as the dollar buys fewer units of the local currencies), necessitating an emergency increase in funding.
The Wage-Price spiral will be started not by employers upping wages, but by the government upping entitlements and Government unions forcing pay increases, and state and local governments being bailed out.. The EBT cards and social security checks will go up - that is the wage increase part of the equation.. in response to foreigners abandoning the dollar. These bailouts and increases are paid for by still more debt- which causes more foreigners to dump more dollars. Rinse, repeat. Of course foreigners want the best value for the dollars they have that they can get, so they will drag that process out..selling a little at a time ( you know, exactly unlike these mysterious gold traders who are under such pressure to sell gold, that they ROUTINELY drop huge sell orders on the exchange when it opens, dropping the price by $20-40 and loosing millions instead of selling a little at a time to keep the price high..but there is no manipulation there.. )
(I suspect that is exactly what foreigners are exchanging dollars for - Gold. It might even be a deal State made with China for not destroying the dollar right away-- we will rig the system to keep gold prices at $1200 - and you can buy it with those dollars you don't want! Just keep reporting that you have them in your reserves... )
There may never be a sudden and mass stampede for the door. Just a long slow steady decline in which the Fed buys ever more of our debt back.. and the foreigners immediately turn around and try to spend those dollars in the US, driving up prices more and feeding this death spiral.
Yes the fed could stop it by allowing rates to rise, but that would, as the article points out, send us into a recession and makes the interest on the governments debts ever harder to pay ( without borrowing/printing even more from the Fed) With the Dem's obvious vote rigging and in-pocket media, just don't see anything changing politically - it will be kick the can till we can't.
Shadow Stats has inflation running at near 8% using the 1980s method of calculating it
and 6% using the methods used in the 90s
Are your "investments" providing you with a 6% return? Did your wages increase by 6%. If not you lost money this year.
Hey maybe you should try that HFT casino
called stocks! ( worth clicking on for the propaganda aspect. Not one mention of QE or the Fed ( except in the comments) - but they were sure to put in the chart of Gold and bonds falling...)
Yes folks, the stock market in Wiemar Germany was hopping too. Its hard to say how much longer it will last.. There are certainly some money to be made, but if you need at least 6% with taxes on top of it, you need those 28% returns the Market indexes have been providing of late. And they will continue to provide... till they don't. Talk about gambling. Sometimes I wish I had done it and dropped a bunch in back when the DOW was 7000. But I think how much I would have been willing to gamble at the time.. It wouldn't have been more than $10K (I am not a bet it all on Black kind of guy.. ) . So I would have $20K now. No, I will take the piece of mind I got from having a prepped place to run to...
