John Williams of Shadow Stats sees future US hyperinflation.

A recent interview by King World News of John Williams is worth a quick read.  Not that long time readers will read anything very new in the short interview, only that they will read people other than yours truly saying it.  Confirmation by various sources is an important part of the awakening process.  For those who may not know who John Williams is, he is an economic data gatherer, a king of charting and economic analysis.  When it comes to economics, he is Mr. Facts.  He makes a living by selling his economic research.  Suffice it to say that he has many years of deep insight into the data.  When government stops publishing embarrassing statistics like the M3 money supply, Williams picks op the job of synthesizing that data for his clients.

Williams' main points from the interview:

• Debt level brinkmanship is just showmanship.  They HAVE to raise the debt limit because the money has already effectively been spent.  The minute they don't raise the debt limit is the minute that people lose faith in our government which is the real basis of hyperinflation.
• The cuts being bandied about by congress and the president are for show only.  They want to cut 4-5 trillion over ten years, and if you look at the details it is quite back end loaded.  So on an annual basis we are only looking at cutting the deficit by 10%.  This says nothing about the existing debt at all.   It just promises to get us far deeper into debt at a slightly slower pace.  I am 100% sure that when it comes time to make the big cuts the pain of it will be so great that they will find some other way to avoid making them.  If they fail to do this, the scam will collapse and the con men will have to find real jobs.  They do not want to do this as they now have no economically valuable skills.  BS artists are not in short supply for industry today and it will be even less so going forward.
• The greatest threat of hyperinflation is not triggered by infinite money printing but rather by events which cause loss of credibility of the government.  Keep in mind that fiat currency is already worthless.  The only thing that stands between it and actual widespread acknowledgement of its worthlessness is some trigger that causes loss of faith.  Debt default could easily be that trigger.  If you see rapidly rising interest rates on government debt then you know we are making progress toward the hyperinflation state.
• No cure has been put in place over the past few years.  All that has happened has been a temporary papering over of the problems with more debt, more currency debasement (as in the tripling of the monetary base over the past 3+ years in order to combat deflation) and of course my personal favorite con man tactic which is the suspension of the rule of economic law.  The con men like to refer to this as "regulatory forbearance" but in plain terms it just means changing the rules whenever following the rules would threaten the power structure of the ruling elite.  Since nothing has been fixed, the problems will come back to haunt us and we will see even worse turbulence over the long run than we would have seen if government had just allowed the free market to clear up the excesses instead of working as hard as it could to prop up the excesses.
• Government borrowing is nothing more than theft from the future.  It is spending tomorrow's money today, the wealth of tomorrow's people on today's people.   It is a total scam.
• Greenspan was the primary architect of the debt bubble.  He told everyone that real growth could be achieved by taking on debt.  He lied to us all.  Debt is to the economy like nitrous oxide is to an engine.  It causes a short lived increase in power output but if you keep pouring on the debt or the nitrous, the engine of the economy or of the car will eventually explode.  The problem with short lived power boosts is that they are addictive whether it be in an economy or in a car.  Greenspan told us that debt didn't matter and that debt was good and proper.  Greenspan was (and remains) a traitor not only to the US but to all citizens of the world.  He thinks he got away with it.  I think it will come back to haunt him as everyone else figures out what I have known for years: Greenspan is a criminal.
• The solution?  Get out of the dollar and into gold and silver.  Williams makes it sound like you should make this move rapidly but I think that it should be done over time.  Put retirement savings into physical metal that you have physical possession of instead of dumping your long term savings into government controlled accounts like IRA/401k.  When you put money into government controlled accounts, they have possession of it, not you.  At some point in the con, possession will become 9/10ths of the law.  Count on it.

With all due respect to Mr. Williams, I think the actual course of events to come is what I have been calling for years a "Super Nova" economy.  First a deflationary depression (which is still playing out) and then a massively inflationary or possibly hyperinflationary expansion.  Real estate is by far the largest asset class in the world.  As interest rates rise, the value of real estate must fall to the point where people can make the monthly payments.  As that happens, bank's balance sheets disintegrate and so they cannot loan.  It's hard to have hyperinflation if the banks aren't loaning money.  In fact, given that debt is the largest component of the global money supply, failure of the banks to loan ever larger amounts of money is quite deflationary.

Greenspan himself said there can be no bottom (referring to deflationary pressures) until housing bottoms.  What he did not say is what happens after that bottom is put in and the answer has to be massive inflation as lending picks up again but this time on a much larger monetary base.  Those who do not borrow again at the bottom will get left behind by those who do.  That is the scam of fiat currency (F.C.) and fractional reserve banking (F.R.B.).  It enables gamblers and market timers (i.e. the elite who have insight into such things) to get ahead without doing any work.  It leaves honest hard working people behind.  That's why F.C. and F.R. B. are anti capitalist in nature.  Capitalism is supposed to reward those who work hard and who work smart, not con men, grifters, scam artists, market timers and leveraged gamblers.