VIDEO: Inflation Becomes Hyperinflation in 2014
Economist John Williams, creator of Shadowstats.com, has an incredible 15 minute interview with USAWatchdog.com for public view. Anyone holding any sizable amount of U.S. bonds, dollars, or dollar-based equities should take note – Williams sees hyperinflation in the next 15 months.
When asked about his target date and open ended QE, he presented an ironclad argument that the Fed surely does not want anyone to hear:
“That's the problem because once the Fed starts monetizing the debt, you're going to see an exploding Treasury debt, you're likely going to see a very heavy sell off in the dollar and a big spike, the beginning of a very major inflation problem that should evolve into the hyperinflation I've been talking about.
“When we first talked, I was looking at hyperinflation at the end of the current decade, and that was due basically to the long-range insolvency of the U.S. government. If you looked a the government's financial statements... you're seeing an annual deficit of about $5 trillion per year. That includes the net deterioration each year and the unfunded liabilities on a net present value basis, basically the money you have to have today to cover that into the future. That is beyond containment.
"You can raise the taxes 100%, take all the peoples wages and salaries, you'd still be in deficit. You could spending, all government spending except Social Security and Medicare and you'd still be in deficit.
“This is something I just don't see the current political system correcting. We're clearly seeing in the last year or so, lack of political will to address this. We'll see what comes out of this election, but I don't see a change here.
"With that effect in place, the only option left open, and governments usually don't go into bankruptcy, is what normally happens. That is governments print money to meet their obligations.
“Now that was in place before the crisis of 2008 -- the panic of 2008 -- and all the actions taken by the Fed, by the U.S. Treasury, to prevent the system from collapsing, bought a little time. They pushed the problem down the road, but everything they did has a cost and the cost is inflation and [their actions] accelerated the process.
"I don't see the current system holding together without hyperinflation beyond 2014.”
To make matters worse, Williams thinks it is too late to stop the process. The trigger has already occurred:
“Where this starts to fall apart -- the approximate trigger for hyperinflation -- comes with the global loss of confidence in the dollar. I'll contend that has already taken placed, that took place over a year ago during the negotiations over the expansion of the debt limit- the debt ceiling. You saw a very panicked sell off that followed that.”
Here is the full interview:+32
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