QUESTION:
Martin has suggested that we will be wishing for hyperinflation in the coming years (as if we will be facing massive deflation), yet at the same time he has suggested that as interest rates rise, we can expect more inflation. Is he expecting higher taxes to offset the increase in inflation, leading to stagflation the likes of which we have never seen?
ANSWER:
Interest rates will rise and this will at last begin the inflation. Then we will see the deficit start to rise again. It has been declining. We will not enter HYPERINFLATION, but we will see asset inflation and this will cause cash to move to the dollar forcing it higher. This will blow out the debts in dollars sold around the world and create a spiral higher as shorts have to cover.
However, the deficit has been able to decline BECAUSE of interest rates have been kept artificially low. This is like printing dollars but failing to adjust the value of gold, which was why Bretton Woods collapsed and why I say you cannot fix anything.
As the dollar rises, our exports will decline. Keep in mind there has also been a resurgence of domestic manufacturing in the USA because of the cheap interest rates. As the dollar rises, this trend will be suppressed furthering the chances for an economic recession 2015.75 to 2020.05.
It is deflationary insofar as the cost of government is rising faster than the private sector. Taxes will rise at every level but this is excluded from the CPI.
The part about PRAYING for HYPERINFLATION is simple because there you retain your freedom it is simply money under attack. What we face is worse – STAGFLATION meaning prices rise (inflation) with declining economic growth. You will PRAY for the HYPERINFLATION scenario because these guys historically always get aggressive and as they lose power, they come after you.
The hunting down of capital has had a massive contraction in the VELOCITY of money. The liquidity and trading volumes of global markets are down by about 50% from 2007 levels. This is part of the STAGFLATION trend – rising prices, no growth, and escalating debt. Graver Cleveland got that one right.
Why people refuse to accept anything buy HYPERINFLATION when they cannot point to a single incident of a major economy collapse in such a manner, I am not sure. For this propaganda tends to imply no civil unrest. Sorry – there is no case of any empire ever collapsing in such a manner. They ALWAYS turn inward against their own people.
