That the US economy is in
turmoil and the dollar’s world reserve status is under unprecedented threat
is a given.
What’s not clear is where
the machinations of government and global banking cartels will lead, and
when.
But we know the breaking
point is coming.
According to Shadow Stats founder John Williams, who has taken a
unique approach to analyzing fundamental economic data well beyond
official government statistics, we will soon begin to see the fruits of
the monetary and financial games taking place behind the scenes.
Unfortunately, the end
result is not going to be recovery. Far from it. As Williams
notes in his latest report, what we should expect is continued degradation
throughout this year and into 2014, at which point a hyperinflationary
environment will take hold.
We’re Beginning
to Approach the End Game.
Nothing is
normal: not the economy, not the financial system, not the financial markets
and not the political system. The financial system still remains in the
throes and aftershocks of the 2008 panic and near-systemic collapse, and from
the ongoing responses to same by the Federal Reserve and federal
government. Further panic is possible and hyperinflation
remains inevitable.
Typical of an
approaching, major turning point in the domestic- and global-market
perceptions, bouts of extreme volatility and instability have been seen with
increasing frequency in the financial markets, including equities, currencies and the
monetary precious metals (gold and silver). Consensus market
expectations on the economy and Federal Reserve policy also have been in
increasing flux. The FOMC and Federal Reserve Chairman Ben Bernanke
have put forth a plan for reducing and eventually ending quantitative easing
in the form of QE3. The tapering or cessation of QE3 is contingent upon
the U.S. economy performing in line with overly-optimistic economic
projections provided by the Fed. Initially, market reaction pummeled
stocks, bonds and gold.
Underlying
economic reality remains much weaker than Fed projections. As actual economic
conditions gain broader recognition, market sentiment should shift quickly
towards no imminent end to QE3, and then to expansion of QE3. The
markets and the Fed are stuck with underlying economic reality, and,
eventually, they will have to recognize same. Business activity
remains in continued and deepening trouble, and the Federal
Reserve—despite currency-market platitudes to the contrary—is locked into
quantitative easing by persistent problems now well beyond its control.
Specifically, banking-system solvency and liquidity remain the primary
concerns for the Fed, driving the quantitative easing. Economic issues
are secondary concerns for the Fed; they are used as political cover for
QE3. That cover will continue for as long as the Fed needs it.
At the same time, rapidly
deteriorating expectations for domestic political stability reflect widening
government scandals, in addition to the dominant global-financial-market
concern of there being no viable prospect of those controlling the U.S.
government addressing the long-range sovereign-solvency issues of the United
States government.
All these
factors, in combination, show the end game to be nearing.
The most visible
and vulnerable financial element to suffer early in this crisis likely will
be the U.S. dollar in the currency markets (all dollar references here are to the U.S.
dollar, unless otherwise stated). Heavy dollar selling should
evolve into massive dumping of the dollar and dollar-denominated paper
assets.
Dollar-based
commodity prices, such as oil, should soar, accelerating the pace of domestic
inflation. In turn, that circumstance likely will trigger some removal of the
U.S. dollar from its present global-reserve-currency status, which would
further exacerbate the currency and inflation problems tied to the dollar.
This still-forming great
financial tempest has cleared the horizon; its impact on the United States
and those living in a dollar-based world will dominate and overtake the
continuing economic and systemic-solvency crises of the last eight
years. The issues that never were resolved in the 2008 panic
and its aftermath are about to be exacerbated. Based on the precedents
established in 2008, likely reactions from the government and the Fed would
be to throw increasingly worthless money at the intensifying crises.
Attempts to save the system all have inflationary implications. A
domestic hyperinflationary environment should evolve from something akin to
these crises before the end of next year (2014).
Excerpted by King World
News via
Steve Quayle
Originally
published by ShadowStats.com
Such an environment, as
has been previously noted by John Williams, will not just involve increased
prices at our grocery stores or gas stations. It will be much more severe
than that and have serious
implications across our entire system of commerce.
There’s strong evidence
that we’re going to see an intensified downturn ahead, but it won’t become a
great depression until a hyper-inflation kicks in. That is because hyper-inflation
will be very disruptive to the normal flow of commerce and will take you to
really low levels of activity that we haven’t seen probably in the history of
the Republic.
…
As the dollar
breaks down, you’ll also likely see disruptions in supply chains, including
shipments of food to grocery stores. People should consider maintaining
stockpiles of basic goods needed for living, much as they would for a natural
disaster.
The end result of our
current trajectory is inevitable.
The target date according
to Williams is somewhere around the end of 2014. This will be just the
beginning and it won’t be a short-term event.
What we’re talking about
here is a shift so drastic that life for the average American will change
significantly,
with some theorists suggesting it will be so severe we
may not be able to survive it.
If hyperinflation is the
end game of this financial crisis, then it’s time to consider what becomes money when the US dollar collapses.
Look first to preparing
yourself for an unavoidable disaster. This takes a focused plan that includes
the stockpiling of essential goods like food and other supplies to get you
through the initial breakdown. Furthermore, if hyperinflation is the end result, then you should be
planning for
a longer-duration crisis where traditional services and transportation
will break down,
which means you need to have barterable
assets, worthwhile
labor skills,
precious metals as a mechanism of
exchange, a safe
location, and a security
plan to ensure
your safety.
Time is running
out. The mathematics of this is clear. The system is wholly
unsustainable and we will soon understand what this really means.
