You can have great profits in inflation if you are in control of when it happens.
By Daniel at 20 September, 2008, 10:54 pm
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You get out of the currency to be inflated. You create a hyper-inflationary depression. Now, the people sell an acre of land for a billion dollars to buy a years worth of needs. But, the person who bought that was out of the dollar and his assets are worth $10 of billions that were at one time on a par with that acre before the depression was created.
The key is to not have your assets in the currency you are going to devalue. But, there is another reason we may not be able to avoid hyper-inflation.
That is because of the trillions “in storage.” The hyper-inflation potential was created over the last 30 years by having foreign nations the recipients of the money supply while our own people were limited. Now, we have trillions of dollars not just in trade but IMF loans and other things floating around out there in other nations. When this unwinds, they will have no choice but to start dumping those trillions on the market to get rid of them.
With nations already leaving the dollar, this could unwind no matter what the Fed or Congress does. Once the loans to the U.S. are cut off, Congress will have to either start cutting services to the people and not just at the federal level. Cities and states will cut police and fire and other services. The Fed will either have to cut services to Medicare and Social Security since there is no money in the trust funds, or print money to cover it. If the print, then they will inflate the money supply and drive prices up.
If we didn’t have so much money floating around the world, it would be different. We have to borrow $1 trillon or maybe $1.5 trillion next year now, that we have the bailouts. Will they lend us that much?
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