Clayton

I told many of my friends this last May 21st, “well, it’s been nice knowing ya! But I am about to get raputured.” Unfortunately, the “Rapture Bus” passed me by this time too. It stopped and honked, but I just waved and it drove on I guess. Rather than make any further comments on this nonsense, I have found many blog quotes that were especially funny and have posted a few here:

“Hide your kids, hide your wife, and hide your husband, cause they rapturin’ everybody up in here.”

“I didn’t win either; I was praying that the rapture would come and snatch up a bunch of Christians because then I’d have no problem finding a job!”

“Don’t know what you’re talking about, im pretty dead.
Hey do you happen to have any brain? Brains? Brains? Brai- Braaaiiins!!”

“LoL I Overslept.”

“I know where my towel is!”

“Woot, though it has been decreed we will still have Simon Cowell.”

“Break out the SPF-45,000″

“Blasphemer! Y’all are going straight to hell at 6 pm, God’s wrath and what have you.”

“Ankh if You Love Buddhists.”

“If this is Heaven, then I’m very disappointed.”

23 At that time if anyone says to you, ‘Look, here is the Messiah!’ or, ‘There he is!’ do not believe it. 24 For false messiahs and false prophets will appear and perform great signs and wonders to deceive, if possible, even the elect. 25 See, I have told you ahead of time. 26 “So if anyone tells you, ‘There he is, out in the wilderness,’ do not go out; or, ‘Here he is, in the inner rooms,’ do not believe it. 27 For as lightning that comes from the east is visible even in the west, so will be the coming of the Son of Man. 28 Wherever there is a carcass, there the vultures will gather…36 “But about that day or hour no one knows, not even the angels in heaven, nor the Son, but only the Father. Matthew 24:23-28,36

http://www.radiationnetwork.com/

Clayton

I have not written in these pages for awhile. The reason is I have been intently studying what has been happening economically trying to figure out what the major countries of the world were trying to do. For two years now, ever since President Bush’s “too big to fail” economic strategy, I have been predicting hyperinflation. To my chagrin and contrary to my 30 years of following finance and economics, hyperinflation has not occurred. My frustration with my poor analysis has left me mightily vexed to say the least. Now though, I think I know what is going on.

In the US and the rest of the industrialized world, there are in fact two economies.  One is the Wall Street/Big Banks economy. The second is the rest of us which includes most business and all home owners. How much has the Fed spent on the “too big to fail” banks? Best estimates put the number at approximately $3 trillion . This is of course, before the Quantitative Easing round 2 began. QE2 is currently adding an additional $600 billion to the Fed money spent and is being used mostly to purchase US federal debt.

How much has this distorted the stock market? According to Barry Ritholtz of the Big Picture, about $2 trillion in additional capitalization has been added to the stock market. Again, this doesn’t mean much to the layman trying to figure out how to plan his or her meager resources in an uncertain future, but it has huge implications for all of us. So let me try to put this into a nutshell summary. The current values of the stocks in the stock market are very much overpriced and have once again formed an economic bubble. Do not let the 12,000 point stock market fool you, it is vastly overheated and will eventually have to adjust to the detriment of us all. What this bubble does however, is allow the US government to continue spending money at almost twice the tax revenues it takes in and then finance itself by selling Treasury Bills.

Though we have experienced modest food and energy inflation, we have not seen the hyperinflation I have been expecting. In those areas of the world that live in abject poverty, this modest inflation has had a tremendous impact. The riots and protests in areas like Tunisia and Egypt look to be political on cable news but they are really protests over rising food prices. I am sorry to say, though this is bad and the protests will likely continue to spread steadily across the globe, the worst is yet to come on the food cost front. Remember that printing money to pay bills always leads to major bouts of inflation. Trillions in dollars of printed money will lead to a type of hyperinflation called “stagflation.” Since the US dollar is used as the world currency, this will lead to food inflation for everyone on the planet.

The problem with the free printing of money is that once it is out into the economy, it cannot be called back. This money will eventually work its way out of the banking system and into the second general economy where the rest of us live. That is when you will see $10/gal of gas and $5/gal of milk prices. All it takes to start this inflationary process forward is an economic recovery just like what is happening right now in the US. Once businesses start borrowing again sales increase and they start hiring. Consumption then starts to rise and the fake money printed for the federal government starts trickling down and just like that, inflation begins. It is important to understand that this is happening by design and not by a mistake on the part of the US government and the Fed. Their only salvation in fixing the government debt problem is to “monetize” it. This is an old trick used by governments for centuries. You can effectively reduce your government debt in real dollars by making each dollar worth less overall. It is a “one trick pony” though that has had disastrous results over the centuries. It usually leads to the destruction of the country in question as has happened many times in the past to such countries as France (1790’s), Germany (1920’s) and Rome (450 AD). Why the US government thinks they have a way to dodge this bullet where other countries have failed is anyone’s guess.

The consequences of monetized debt for the average person are always the same, economic devastation. So my time line on the coming hyperinflation has been wrong as I did not quite grasp the “two economies” concept early enough. But the overall analysis is still correct. Hyperinflation is coming in the form of stagflation. The concept of stagflation is that some items like food and energy products will skyrocket while other things will plummet in price. For example, do you really need a flat panel TV if you cannot afford the electricity to run it? Do you really need that new SUV if you cannot afford the gasoline that goes in it? So the question is: in the future what will hold its value and what will not? Those things that are necessary for life will hold value. Food, clothing, housing and if possible, a small land plot to plant food. This is what you should be investing in now to prepare for what is coming. Precious metals like silver and gold always hold value against inflation, but may be hard to buy right now due to each person’s current financial position and the availability of the metal itself. If you have a little cash then invest in silver, gold, guns and oil stocks in that order. For everyone else stock up on canned and dried foods, water, toilet paper and any critical medicines you may need (even though they may be dated, old medicine is better than none at all).

What I haven’t figured out is why? Why are these guys that are controlling the US government and the Fed doing this to our money? These guys are not stupid. They are experienced, educated individuals who know history and economics as well as anyone. I personally do not buy into the grand “New World Order” conspiracies that are floating around. I think instead, those on the inside know something the rest of us poor peons do not. Something is coming that is going to be devastating and it is worth it to them to push the economic envelope right now and risk hyperinflation in preparation for whatever “it” is. It would sure be nice to know what they know. I have read a lot of speculation on that subject as to why they are doing this economically right now. Unfortunately, the answer as to “why” will have to be left for another analysis I guess. All everyone needs to do today is start preparing for an economic tsunami as that is for sure in our near future.  Remember, you need have to have an economic recovery in order to have inflation and that recovery has already begun.

Clayton