Recession, hyper-inflation, and fiscal disaster coming? Shadow Governments Warning:
Although estimated on three weeks worth of data, December M3 and an upward revision to November's annual growth show a pattern of accelerating growth in the formerly broadest of U.S. monetary aggregates. Therein is a hint of what will be one of the major, ongoing market concerns in 2007: inflation. The other key economic features of the year ahead will be a deepening, structural recession, and a U.S. government fiscal disaster careening out of control. New Year Faces Financial Peril
Hyperinflation Defined:
Hyperinflations are caused by extremely rapid growth in the supply of "paper" money. They occur when the monetary and fiscal authorities of a nation regularly issue large quantities of money to pay for a large stream of government expenditures. In effect, inflation is a form of taxation where the government gains at the expense of those who hold money whose value is declining. Hyperinflations are, therefore, very large taxation schemes. The Concise Encyclopedia of Economics
much more
M3 money supply is soon to be growing at an annual rate of OVER 10%. The Stunning growth in printed money and the money supply (M3) is shown in this chart from ShadowStats.com:
Annual Money Supply Growth - With M3 Continuation
Bonddad, on what is M3.
So, what is M3? According to my dusty and tattered copy of the Baron's Finance and Investment Handbook, 3rd edition M3 is M1 plus M2 plus time deposits over $100,000 and term repurchase agreements. ...
Bernanke Is Flooding the Economy With Money by Bonddad
BuShCo is trying to hide the huge amount of money they are printing.
In essence what they are doing is trying to inject liquidity here but doing so in a very back door way. Thus people don't shout, "oh my god they are pumping out cash, run for the exits!" because there's not some newspaper headline about it. So their theory being they can add liquidity without scaring anybody about it. Interesting trick...Sterno
Borrow, squander, and print money
The Bushies have added another piece to their plan to ruin this country while lining their pockets. It used to be mostly "Borrow and Squander", but now they have added in the old "print money to cover up the squandering" trick.
... eliminating the M3 report is a way to try to conceal their actions, typical for the Bush Dictatorship.
MD Patriot
Insiders (the rich) are/will move their money overseas for huge profits.
What this does is allow insiders is to move out of cash positions and into hard assets and foreign currency with forehand knowledge of impending inflation and the expectation of aquiring the new assets at what will amount to a bargain price when repaid with cheap dollars. Lost purchase power for wage earners, even with minimum wage increases, will pay the difference. It's like paying you a loaf of bread for a day's work than finding ways to make the loaf with 1/3 the wheat, mostly just air pockets. The Baker will eat lobster. java4every1
Bu$hCo may be the first American Presidental Conglomerate to move its money out of the US.
It seems Bush has bought a 98,842 acre ranch in Paraguay. Either he is fleeing prosecution in the same area the Nazis relocated, or he knows he has wrecked the U.S. and the Northern hemisphere and is planning to head South. jhogg
Corporations have cash, Consumers have debt.
Corporations are awash with cash, consumers are awash with debt. To simplify, if you have 10 persons in your economy, and one of them is Donald Trump and the other 9 have absolutely nothing, Donald Trump is going to run out of money generating investments. In my layperson's view, the current situation with corporate cash is a direct consequence of our unbalanced pro-corporate, all-supply-side economy.
It took 25+ years (which is why it is different than 10 years ago), but the endgame is rapidly approaching. New Deal democrat
Inflation has started, no matter how Bu$hCO lies with their statistics.
Where I am bread that was at 77 cents a year ago is now over a dollar. Milk which was $1.99 is now $3.06. The prices never went down when the gas did. This non existent inflation thing is BS.cwaltz
Printing Money only works for so long before a crash (Rome, Germany, Mexico, etc).
Rome tried ... (well, instead of using the printing presses, they simply sent the minters to make more and more coins and debased them by putting in less precious metals).
http://en.wikipedia.org/...
Not that things worked out very well. Should one day people lose faith in our currency, we could well look at what happened to Rome to see what might happen to us:
http://en.wikipedia.org/...
We might safely say some of that is already happening. sesquioxide
The middle class has two major assets, real estate and their retirement plans. Neither is liquid. Neither can be moved and protected. Both will go down in value. I recently studied over 50 Retirement Plans (almost all 401k's) and NONE had a single option where a participant could park their money to avoid declining values in stocks and bonds (unless they loaned their money to banks or insurance companies - neither of which I trust with my money).
The US economy seems very shaky. My thought: No more than 40% of your assets should be in stocks, bonds, or real estate. And, never loan your money to Insurance Companies or Banks.
I am not an economist, but the pieces seems to be falling into place for a potential disaster after 6 years of fiscal irresponsibility by Bu$hCo. Not sure what will/might be the tipping point, but somewhat sure it will come.