By Dr. Fred Goldstein
May 18, 2009
"I lived through the German hyperinflation of 1920-1923 and I can tell you that America is speeding down the same road to hyperinflation and bankruptcy. The Federal Reserve is doing the same thing to the money supply as the Reichsbank did -- increasing it substantially, though on a smaller scale so far. The American middle class will be wiped out in a hyperinflation of the dollar. Your readers may protect themselves by holding gold, which will survive the destruction of all paper assets."
-DR. G.C. WEIGAND, Professor of Economics Emeritus, So. Illinois University as quoted in "The Gold & Silver Report", Feb. 1987
Consider what the U.S. is presently doing to create hyperinflation ...
* Within the last year the Fed's balance sheet has expanded $2.2 trillion
* The Federal government has enacted the TARP bailout along with the nationalization of Freddie Mac and Fannie Mae
* The Federal government has funded AIG with over $160 billion
* The Federal government has added Medicare and Social Security liabilities
How much longer can the Federal Reserve and government defy the laws of money?
Ned Schmidt, CFA, CEBS offers his perspective in the following Financial Sense editorial;
"How will history judge this violation of the "laws of money"? What will the ramifications of the Federal Reserve totally abandoning its independent role, becoming nothing more than the source of financing for the populism of the Obama regime?"
Ambrose Evans-Pritchard, International Business Editor for The London Telegraph writes on 5.7.09;
"China has given it's clearest warning to date that emergency monetary stimulus by Western governments risk setting off worldwide inflation and undermining global bond markets."
Bob Chapman, Editor of International Forecaster is even more adamant and specific about this matter on 4.29.09;
"The increase of money and credit, the monetizing and demands by the Treasury in just 2009 alone will devalue the purchasing power of the dollar by 85%. A $2.50 loaf of bread could cost $15.00 in just two years."
The U.S. government, as well as major financial institutions are faced with many economic challenges in 2009. Our politicians and leaders have resorted to Keynesian economics in tandem with a "too big to fail" agenda. Creating more debt to bail out banks, brokerages, insurance companies and mortgages is at best a temporary fix that inevitably trickles down to hurt all dollar savers.
We at Swiss America are offering a viable economic solution to our valued prospective clients. Buy physical gold and silver now with both personal resources and retirement funds! Do not wait for a price correction, which may never come. Call 800-289-2646 or sign up for the latest special report INFLATION SOLUTION.
Editor's Note: Hyperinflation in the News …
“You know things are really awful when a nation’s rate of hyperinflation gets into the territory of Weimar Germany. Between August 1922 and November 1923, German inflation rose about 10 billion percent, according to a textbook by Columbia University’s R. Glenn Hubbard. Zimbabwe topped that record for economic mismanagement last year. The country’s annual rate peaked at 489 billion percent in September 2008, according to the International Monetary Fund reported WSJ.
"Fed Historian sees 1970s-Style Inflation: Fed Chairman Ben Bernanke is siding with John Maynard Keynes against Milton Friedman by flooding the financial system with money. If history is any guide, says Fed historian and professor of political economy at Carnegie Mellon University Allan Meltzer, the effort will end in tears. Inflation "will get higher than it was in the 1970s," says Meltzer reports Real Money Perspectives.
“Up until August 2008, the portion of the US monetary base that consisted of bank reserves was between 8% and 12%. In December 2008, however, that proportion had risen to 47%! The resulting massive expansion to the US monetary base increases the probability of a complete collapse in the confidence of the value of the US Dollar. This shift in sentiment would spark a hyperinflationary fate to the world's de facto reserve currency,” reports DollarDaze.
“Hyperinflation is never controlled domestically. It is created by outside forces. If China and other buyers of our debt view the endlessly increasing American deficit spending as a threat to the viability of the U.S. dollar they will abandon the dollar and reduce their purchases of treasury bills. And if they walk away from the dollar our currency will become junk and hyperinflation will race through the society like a plague,” reports Triumph.
“Fed experimentation could send too many dollars coursing through the economy, setting off a nightmare scenario of rocketing, uncontrolled prices. Yet economist Ed McKelvey of Goldman Sachs argues that is highly unlikely, and besides, the U.S. central bank has ways to shut the monetary spigot, too -- for instance, by shelving plans to buy mortgage-backed and other securities, or by raising interest rates,” reports Barrons.
“The founders of America experienced hyperinflation and the collapse of the Continental dollar. They understood very well the detriments of using paper money by government officials to pay for government expenditures. Their experience led them to write into the United States Constitution that under no circumstances could paper money (bills of credit) ever be used in the payment of debts; only gold and silver, real commodity money, could be used for that purpose. If America is to get off the hyperinflation train and avoid tyranny, America must return to her guiding document, the Constitution,” YumaSaun.
"Paper money eventually returns to its intrinsic value – zero." -Voltaire, 1694-1778