Imagine Prices At The Food Store And Gas Pump Doubling In Days: Quantitative Easing Has Been Devastating For American Households And Now Many Of The Ingredients For Hyperinflation Are Brewing!!

We’re Certainly At A Flashing Yellow Alert On Hyperinflation

David Zeiler: Too few understand just how disruptive hyperinflation in America would be. Truth is, it would be a nightmare.

In an episode of hyperinflation, money loses value so rapidly that people spend it as quickly as possible, which only feeds the cycle of pushing prices higher and higher at a faster and faster rate.

Imagine prices at the food store and gas pump not just going up a few cents at a time, but doubling in a matter of months, weeks, or even days.

And now some economists and market experts think many of the ingredients for hyperinflation are brewing in America.

That’s because years of profligate U.S. government borrowing and spending have created trillions of dollars that lurk in the reserves of foreign countries and major financial institutions. The situation escalated after the 2008 financial crisis, with the U.S. Federal Reserve‘s policies of “quantitative easing” creating even more money.

“The U.S. government and the Federal Reserve have committed the system to its ultimate insolvency, through the easy politics of a bottomless pocketbook, the servicing of big-moneyed special interests, gross mismanagement, and a deliberate and ongoing effort to debase the U.S. currency,” said John Williams of Shadow Government Statistics in his annual report on hyperinflation.

Quantitative Easing Has Been Devastating For American Households

John Mauldin recently pointed his readers to Hoisington Investment Management’s recently released Q3 Quarterly Review and Outlook.


Authored by Van Hoisington and Lacy Hunt, the two go after the Federal Reserve’s easy monetary policies and they view QE3 as “a tacit admission by the Fed that earlier efforts failed.”

Not only have they failed to boost the economy, they’ve also caused “devastation for households.”

The chart below, included in their report, shows that QEs have been accompanied by increased inflation, which erodes household wealth.


CPI Since QE1
Article Continues Below


Inflation: Washington is Blind to Main Street’s Biggest Concern

Journalists, politicians and economists all seem to agree that the biggest economic issue currently worrying voters is unemployment. It follows then that most believe that the deciding factor in the presidential race will be the ability of each candidate to convince the public that his policies will create jobs. It seems that everyone got this memo…except the voters.

According to the results of a Fox News poll released last week (a random telephone sample of more than 1,200 registered voters), 41% identified “inflation” as “the biggest economic problem they faced.” This is nearly double the 24% that named “unemployment” as their chief concern. For further comparison, 19% identified “taxes” and 7% “the housing market” as their primary concern. A full 44% of women, who often do more of the household shopping and would therefore be more sensitive to prices changes, identified rising prices as their primary concern.

Currency Wars: Ben Bernanke Tells Third World to Devalue Their Currencies

U.S. Federal Reserve Chairman Ben Bernanke said a little currency appreciation in the developing world is not a bad thing.

Speaking at the International Monetary Fund meeting in Tokyo this weekend, Bernanke urged Third World nations to allow their currency to appreciate as a means of actually preventing inflation.

“The perceived benefits of currency management inevitably come with costs, including reduced monetary independence and the consequent susceptibility to imported inflation,” Bernanke said.

Milk Seen Surging 15% on Drought-Feed Costs Before Demand Slows

Retail-milk prices will rise as much as 15 percent by the first quarter of 2013 after the worst U.S. drought since 1956 sent livestock-feed costs to a record, according to Dairy Management Inc., an industry group.

“Since the drought started, the milk price has gone up quite a bit,” Dairy Management Chief Executive Officer Tom Gallagher said Monday during an interview in Chicago. “Prices are going to go up worldwide.”

The drought led to the biggest…


Latest Economic Data: US Inflation Surges 1.7% as Consumer Prices Rise 0.6% in August 2012

Inflation calculator at that sight is amazing…

“US inflation rose in August by the most in more than three years as consumers paid sharply higher fuel bills, the US government reported Friday in Washington.

Led by surging prices at the pump, consumer prices jumped 0.6 percent in August after being flat in the previous two months. The increase was the sharpest since mid-2009.”


Follow IWB on Facebook and Twitter