Hyperinflation may be in the cards. One way in which it may happen. Distinction between inflation and hyperinflation.


GALTGULCH8

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http://gonzalolira.blogspot.com/2010/08/how-hyperinflation-will-happen.html

I just posted this link because I think it is a plausible scenario. If it does happen within the next several months i suspect that most will be unprepared while those who anticipate it might be able to position their assets to get through it in one piece.

It is pathetic that those in power subscribe to the Keynesian orthodoxy as true believers and can be counted on to act accordingly.

He leaves out the concomitant civil unrest that might ensue if his scenario does come to pass.

I only need one gallon of gas to get to work and another to get home so thirty dollar per gallon fill ups of my Prius would be manageable. But who will be home all day to protect the stuff from bandits and thieves?

I think I will need more ammo.

gulch

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I believe I just heard on the radio that the treasury intends to "buy" a trillion dollars worth of bonds.

Ted,

I didn't hear that. But my understanding is that it is usually the Federal Reserve which purchases Treasury Bonds from the Treasury as a first step to increase the money supply. It is a devious process, evidently contrived to obscure their intention from the ordinary citizen. The most detailed explanation can be found in G. Edward Griffin's book, The Creature From Jekyll Island. The end result is that the newly created funds find their way into the reserve accounts of commercial banks. That then enables those banks to loan out ten times as much as they have in reserve.

That is the nature of the fractional reserve policy in effect in our banking system. I think it may be that it operates at a couple of levels. First in the Regional Federal Reserve Banks and then again in the Commercial Banks. As I understand it the purchase by the Fed of say one billion dollars worth of Treasury Bonds would enable the Regional Federal Reserve Banks to loan out 10 billion dollars to the Commercial banks. In turn the Commercial banks would keep the ten billion as reserve and loan out 100 billion because of the fractional reserve system.

Griffins book reviews the history of central banking in America. It began in 1775 when there was about 12 million dollars in the treasury and the Continental began to be created. Additional millions were authorized over the years until finally over 650 million dollars worth of the irredeemable Continentals had been circulated in part to pay those fighting in the Revolution. The worthlessness of the paper currency was not lost on most of those who met to write the new Constitution. Of course they met to modify the Articles of Confederation not to create a new government over the newly liberated states.

Jefferson and Jackson succeeded in abolishing the central banks which existed in their time. Griffin documents their struggle to do so in more detail than you are likely to find elsewhere. Jackson risked his entire political career in his successful attempt to counter the head of the central bank, a man named Biddle, who did not give up easily.

Griffin is renown for his extensive research and that is evident in The Creature From Jekyll Island. Murray Rothbard has written The Case Against The Fed which focuses on our present Federal Reserve and that book is available online at www.mises.org

I am heartened by the virtual explosion of free market and libertarian ideas in the media, witness Andrew Napolitano's new Freedom Watch on Fox TV as well as Stossel's show. The Tea Party is also focusing on a return to the Founder's vision, with mention of the Constitution and its principles, limited government and the free market, but the meetings I have witnessed on C Span show people whose admitted ignorance of the aforementioned is troubling and their invoking God is an embarrassment but not unexpected.

I fear that the reins of rational limited government have been dropped and the fate of the nation is uncertain. We know that the trajectory of those in power is disaster in the making and it remains to be seen if restoration of our limited Constitutional Republic can be achieved by whomever manages to get elected to leadership.

Hyperinflation, if it were to happen as spelled out in the article linked to above, could be so disruptive that a more tyrannical regime might follow.

Edited by gulch8
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  • 3 months later...

Without a doubt, it will be NOTHING like as peaceful as the Great Depression was. there are 3x as many people, 10% as many can support themselves, and there's lots more sense of entitlement, and lots more autorifles, ammo, vehicles, etc. There are few non-hybrid seeds, no trained horses or horsemen, no horse drawn equipment, no root cellars, no double boilers or Mason jars, etc. It will get very ugly, very fast, and only 1-10% will survive for a year, if things go all the way to hell, as I think they will. I don't see how it can be stopped, once the power goes off. Once the $ is toilet tissue, the oil will stop coming and the coal won''t be mined, so what food is grown can't get to the market. People in the cities will be forced out, over lack of water, in a few days. They will go to the farms and ranches, and try to take the food that they need. They don't know how to jerk meat or crack/cook grain, so most of it will be wasted. Cities and towns will burn, as will dry pine forests, prairies, and grain fields. There is a way to prepare, at low cost, but it is pooh-poohed by so many that I no longer post it publicly.

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Without a doubt, it will be NOTHING like as peaceful as the Great Depression was. there are 3x as many people, 10% as many can support themselves, and there's lots more sense of entitlement, and lots more autorifles, ammo, vehicles, etc. There are few non-hybrid seeds, no trained horses or horsemen, no horse drawn equipment, no root cellars, no double boilers or Mason jars, etc. It will get very ugly, very fast, and only 1-10% will survive for a year, if things go all the way to hell, as I think they will. I don't see how it can be stopped, once the power goes off. Once the $ is toilet tissue, the oil will stop coming and the coal won''t be mined, so what food is grown can't get to the market. People in the cities will be forced out, over lack of water, in a few days. They will go to the farms and ranches, and try to take the food that they need. They don't know how to jerk meat or crack/cook grain, so most of it will be wasted. Cities and towns will burn, as will dry pine forests, prairies, and grain fields. There is a way to prepare, at low cost, but it is pooh-poohed by so many that I no longer post it publicly.

Ragjohn,

You make it sound as if it is not a matter of whether it will happen, rather a question of just when it will.

I wonder if you are familiar with www.chrismartenson.com and whether you have watched his Crash Course?

He points out that it may happen suddenly with virtually no warning. My main concern is being able to purify the water in a nearby reservoir so it would be safe to drink!

Any one of us is so easily outnumbered and out gunned.

I am sorry that you are unwilling to post your low cost preparation info. Is there a good link?

gulch

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