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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: John McCarthy who wrote (75893)	3/11/2008 5:29:43 AM
From: Mike Johnston	Read Replies (1) \| Respond to of 116555

Good question John, not that I know of, I will however provide my own guess as to the potential psychological stages of hyperinflation. I think right now we are somewhere between 2 and 3. Stage 1 - Ridicule- inflation 5% - those who are expecting hyperinflation are lunatics or conspiracy theorists - inflation is low, rising house prices do not constitute inflation - hyperinflation cannot happen here - the Fed will not print money, because the Fed is a "private" bank - nobody is able to stop "Kondratieff Winter" Stage 2 - Denial- inflation 8-10% - Rising prices are not inflation, it is just a one-time adjustment in price structure - Low bond yields tell us that inflation is low and will stay low - commodity prices are in a speculative bubble - the Fed is powerless to stop deflation - hyperinflation cannot happen, because demand is dropping and wages are not rising - the Fed is a "private " bank and will not give money away - recession is on the way Stage 3 - Acceptance- inflation 12-15% - Something is really wrong with the CPI - Unemployment is rising, wages are flat and yet prices are still skyrocketing, what the hell is going on ? - Why is M3 rising at almost 20% ? - They are "lying" about true inflation rate - It doesn't pay to save anymore - Dollar is no good - Interest rates are much lower than inflation rate Stage 4 - Anger- inflation 20-25% - The dollar is still dropping like a rock - Is the Fed monetizing private and public debt ? - The Fed is probably covertly bailing out banks and brokerages - My life savings are being wiped out - Why should I pay to bailout the thieves ? - Why are government employees making so much money ? - These 100 million dollar paychecks of CEO's are pi.... me off - No way in hell I will continue to pay my mortgage if the deadbeats are getting government cash - Everybody around is embezzling and stealing money, why should I put in 12 hour days anymore - The crime is way up around here, it is not safe anymore - How could I be so stupid ? Stage 5 - Fear- inflation 30%-50% - With prices rising so fast, how will I put food on the table - No way I will be able to pay the heating bill this winter - Gosh, is this the best that I can provide for my kids ? - My savings will become worthless soon - I have to buy some gold - We have to buy this now, it will get more expensive later - We have to liquidate our savings, we are losing 20% a year - I worked hard and saved all my life and now I have nothing Stage 6 - Panic- inflation 100% or higher - Get everything out of the bank now and buy gold at any price - Make sure you cash and spend your paycheck early - We are going to Wal-Mart to buy anything we can still get our hands on - Does anybody have any gold for sale ? - Are they accepting anybody in Australia, no ?, how about Brazil ? - They are giving $1 New Dollar for 1,000 old, but the limit is only 50,000 old. - They rejected our visa application