This is our path, unless our current policies are drastically
altered in a way that Volcker suggested and honesty is
restored in government statistics. Commodity price
suppression in the futures markets meets shortages, and
the bull market in commodities will now only gather speed,
regardless of predictions of "deflation". The depression will
not materialize NOW, maybe not even a formal recession
will be acknowledged (due to faulty inflation data), but real
salaries will keep depreciating and American folks will
feel a lot of pain, without knowing where it came from
(evil oil companies must be ones to blame).
US economy will keep going at nearly full employment, with
rapidly depreciating USD. More creative activity on part of
the Fed will eventually lead to full scale monetization of
the bad debt and drastically accelerating inflation.
This is our path, because it appears the Fed and the
government will not stop at ANYTHING to prevent a recession
and the necessary adjustment of the economy from financial
or ponzi economy to real economy that produces goods.
The Fed will need to pursue even MORE drastic measures later
on to stop these unpleasant developments from happening than
it would now.
Andreas Schiendorfer
Online Publications
Hyperinflation History: When Hard Cash Goes Soft
23.02.2007
A kilogram of bacon cost 20 trillion dinars in Serbia in 1993. In 1946, Hungary released the Szazmilljo B.-pengö (100,000,000,000,000,000,000), the banknote with the most zeros in history, and in Germany, an egg cost up to 150 billion marks in 1923. These are just a few examples of the history of hyperinflation, a condition in which prices increase rapidly as a currency loses its value. There are many modern-day cases as well.
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