Disclaimer

Investing involves some degree of risk. Investors should inform themselves of the risks involved before engaging in any investment. I accept no responsiblity for your failures as an investor. Disclosure - Long physical Gold, Silver, and mining companies.

Monday, June 22, 2009

What causes hyper-inflation?

Think Zimbabwe or Weimar Germany! If you're looking for inflation, you might see a little i.e.
groceries, gas prices, home consumables etc. Keep looking.....Look a little harder. You are
probably not seeing a whole lot. The problem is your not looking in the right place. You
should be looking for monetary inflation. Monetary inflation occurs two years before consumer inflation.
Monetary inflation is the excessive printing of money to pay debt.
The Fed is currently printing excess dollars to buy Government bonds and toxic assets which is
highly inflationary. This massive amount of monetization will lead to consumer inflation rates
exceeding 24% within 12 to 18 months. Remember monetization of debt leads to monetary
inflation and the end result will be consumer hyper-inflation.

Look at the chart and cringe.......you'll probably have nightmares.

fs1

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