Concerted QE—The Beginning of Hyperinflation

The developed world’s debt-based wealth is at great risk of imploding. Never before have so many major nations been on the brink of bankruptcy. In addition, the world’s financial system is bankrupt; it survives only because of false valuations of banks’ toxic assets. This is a critical time for investors.

The US, Europe and Japan are all in serious trouble, and problems in the Middle East are worsening. The mixture of famine, poverty, political unrest and oil is very dangerous and means continued conflict. Removing leaders or dictators is not a solution, and is more likely to lead to anarchy.

As for Europe, the situation is deteriorating in Ireland, Greece and Spain.

In the US, debts and deficits dwarf what is happening in Europe. There is no attempt whatsoever to cut the deficit or the unfunded liabilities, which are growing by $10 trillion per annum. The dollar is under intense pressure, and many believe it will collapse before the euro. All currencies will continue their fall to their intrinsic value—zero. Against gold they are already down 97-99% since the creation of the Fed in 1913.

The Fed has started its permanent and unlimited QE3, which guarantees a hyperinflationary depression. Previous money printing and near-zero interest rates haven’t helped, so the Fed is creating and lending unlimited amounts of paper currency at no cost and still the economy cannot recover. But a system with free and unlimited amounts of paper money can never work; this is why the US and the whole world are in an irreparable situation.

Throughout history gold is the only currency that has survived and maintained its purchasing power. All other currencies have been printed to oblivion. Physical gold represents the best insurance against a fragile world financial system. The mess in the world—politically, economically, financially—is deteriorating at a rapid pace.

We are in the acceleration phase of rising deficits, rising inflation and falling currencies that will lead to a hyperinflationary depression. This vicious circle will not stop until we have seen the “final and total catastrophe of the currency system involved” (von Mises). The big difference this time is that it will involve most major nations, so the consequences are difficult to predict.

To read Egon von Greyerz article: Concerted QE—The Beginning of Hyperinflation

Tagged as: Economic, Hyperinflation, Japan, Middle East