Preparing for the Possibility of Hyperinflation

By Anthony Gilbert – Writer at http://www.realfx.com/blog/

Hyperinflation is a rapid increase in inflation where the prices rise so drastically that calling it inflation becomes meaningless.  While there is no set percentage for hyperinflation, it is often used to describe price increases of 50% or more over a short period.  The sharp increase is what separates hyperinflation from other types of inflation.

What Causes Hyperinflation?

Hyperinflation can occur when the government begins printing larger amounts of money to pay for spending.  As the amount of money being printed increases, the prices of goods and services will increase.  Typically the government would lower the supply of money to curb inflation, but when they continue to print more, there can be an imbalance in supply and demand of currency.  Prices will then skyrocket, and currency will begin to lose its value.  This results in hyperinflation.  Hyperinflation can occur at any time but historically has often happened as results of war economies.

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An Accountant’s View of the Economy

By Peter Diekmeyer – Re-Blogged From http://www.Gold-Eagle.com

Twenty years ago Doug Noland was so worried about imbalances surrounding the dot.com boom that he began to title his weekly reports “The Credit Bubble Bulletin. Years later, he warned the world about the impending 2008 crisis.

However a coming implosion, he says, could be the biggest yet.

“We are in a global finance bubble, which I call the grand-daddy of all bubbles,” said Noland. “Economists can’t see it. They can’t model money and credit. However, to those outside the system, the facts are increasingly clear.”

Noland points to inflating real estate, bond and equity prices as key causes for concern. According to the Federal Reserve’s September Z.1 Flow of Funds report, the value of US equities jumped $1.5 trillion during the second quarter to $42.2 trillion, a record 219% of GDP.

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Low Oil Price Guts Another OPEC Oil Exporter

By SRSrocco – Re-Blogged From http://www.Silver-Phoenix500.com

The low oil price is negatively impacting another OPEC oil exporter as it continues to liquidate its foreign exchange reserves.  Algeria, like Saudi Arabia, has seen its international reserves plummet by more than 40% as the oil price fell in half since 2014.

Algeria joined OPEC back in 1969 and is currently producing 1.1 million barrels of oil per day (mbd).  While Algeria is not one of the larger OPEC members, it still exports roughly 670,000 barrels of oil per day.  At $50 a barrel, the country receives $33.5 million a day in oil revenues.  However, Algeria’s oil revenues have taken a nose-dive as the oil price declined from over $100 in 2014 to below $50 currently:

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Fed May “Kill The Business Cycle”

By Mark O’Byrne – Re-Blogged From http://www.Gold-Eagle.com

Gold Investment “Compelling” As Fed Likely To Create Next Recession

Is the Fed about to kill the business cycle?
– 16 out of 19 rate-hike cycles in past 100 years ended in recession
– Total global debt at all time high – see chart
– Global debt is 327% of world GDP – ticking timebomb…
– Gold has beaten the market (S&P 500) so far this century
– Safe haven demand to increase on debt and equity risk
– Gold looks very cheap compared to overbought markets
– Important to diversify into safe haven gold now

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Most Useful Leading Indicator

By Steve Saville – Re-Blogged From http://www.Gold-Eagle.com

The long-term economic oscillations between boom and bust are caused by changes in the money-supply growth rate. It can therefore make sense to monitor such changes, but doing so requires knowing how to calculate the money supply. Unfortunately, most of the popular monetary aggregates are not useful in this regard because they either include quantities that aren’t money or omit quantities that are money.

What “Austrian” economists refer to as TMS (True Money Supply) is the most accurate monetary aggregate. Whereas popular measures such as M2, M3 and MZM contain credit instruments, TMS only contains money. Specifically, TMS comprises currency (notes and coins), checkable deposits and savings deposits.

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Government Debt Isn’t Actually Debt (??)

By John Rubino – Re-Blogged From Dollar Collapse

The failure of fiat currency and fractional reserve banking to produce a government-managed utopia is generating very few mea culpas, but lots of rationalizations.

Strangest of all these rationalizations might be the notion that government debt is not really a liability, but an asset. Where personal and business loans are bad if taken to excess, government borrowing is not just good on any scale, but necessary to a healthy economy. Here’s an excerpt from a particularly assertive version of this argument:

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The Death of Abenomics; the Rise of Interest Rates

By Michael Pento – Re-Blogged From http://www.PentoPort.com

Job approval numbers for Japan’s Prime Minister Shinzo Abe are in freefall. Abe’s support has now fallen below 30%, and his Liberal Democratic Party recently suffered heavy losses stemming from a slew of scandals revolving around illegal subsidies received by a close associate of his wife.

But as we have seen back on this side of the hemisphere, the public’s interest in these political scandals can be easily overlooked if the underlying economic conditions are favorable. For instance, voters were apathetic when the House introduced impeachment proceedings at the end of 1998 against Bill Clinton for perjury and abuse of power. And Clinton’s perjury scandal was indefensible upon discovery of that infamous Blue Dress. The average citizen, then busily counting their chips from the dot-com casino, were disinterested in Clinton’s wrongdoings because the 1998 economy was booming. Clinton remained in office, and his Democratic party gained seats in the 1998 mid-term elections.

Therefore, Abe’s scandal is more likely a referendum on the public’s frustration with the failure of Abenomics.

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