Are you ready for this? A $ now is going to be 15 Cents by 2011. Read on

[gapala]

Brace For Hyper-Inflation
Posted Apr 15, 2009 02:30pm EDT by Henry Blodget in Investing, Recession
From The Business Insider,

The economy is cratering, so the Fed is printing money. When the Fed prints money, this eventually produces inflation (more dollars, same amount of goods).

Ben Bernanke assured us yesterday that, this time, the Fed's money-printing won't eventually lead to inflation because the moment the economy begins to recover, the Fed will stop printing money and start burning it . Specifically, the Fed will start selling assets instead of buying them and thus shrink the money supply.

Unfortunately, Ben is unlikely to keep this promise. Why?

Several reasons:

First, it will be hard to confidently assert that the economy in full recovery. Remember, in 2007, Ben (and most other people) thought the economy was in great shape as far as the eye could see. He and most other observers missed that disastrous turning point. So why do we think he'll correctly spot the next one? Especially because, if he blows it by jacking up rates too early, he'll kill the recovery.

Second, there will be intense political pressure to MAKE SURE that the economy is in rip-roaring health before hammering consumers and businesses by raising interest rates. Everyone loves low interest rates. And they'll only stop screaming about your taking them away when they're fat and happy (which will be long after inflation really gets going).

Third, the US government desperately needs low interest rates to fund its soon-to-be-monstrous debt load, so there will be another source of pressure on Ben to keep rates low. When we finish with all this stimulus, we're going to owe a boatload of money. We're really going to allow our Fed chief to send interest rates to the moon and jack up our refinancing costs?

Fourth, many of the assets that Bernanke has been buying to print money won't be easy to sell. This time around, the Fed isn't just buying easy-to-sell Treasuries. It's buying trash mortgage assets, et al. To reduce the money supply, it will need to sell them to someone. But who?

In the latest issue of the Institutional Risk Analyst, Chris Whalen hammers this last point home. Chris thinks we're now officially addicted to low interest rates and that Bernanke will be both unwilling and unable to raise them significantly when the time comes. And the failure to raise, them, of course, will lead to hyper-inflation.

The better answer? Stop denying reality and force the country to take its losses. Restructure existing debts, instead of encouraging people to borrow more. That, after all, is what got us into this mess in the first place.

http://finance.yahoo.com/tech-ticker...&asset=&ccode=

[lahiribaba]

Originally Posted by suavesandeep

Hey Guys,
This is a good video from an american perspective.
FRONTLINE: ten trillion and counting: watch the full program | PBS

This is a really interesting discussion. People have bought in good points. But does everybody truly believe in hyperinflation happening in the US ?

Currently we are dealing with accute deflationary conditions, And Fed is doing the right thing. Problem is Fed can keep printing money but if you look around the money is not circulating in the economy and is staying in the Fed vault..Banks are stiil not lending since they still have toxic assets.In some cases bank wants to lend but people are not ready to take credit even at 0% interest because consumers are not spending. Consumers are primarily not spending because they were using their house as an ATM aka (home equity). Since home is now in negative equity that ATM has disappeared, The remaining assets were in stocks,401k which also have disappeared, So on what basis should majority of the customers here spend, We never had a savings culture here, So we cannot bank on our savings to spend. If customers dont spend how do businesses make future investments for which they would need credit, If they do not need credit all the beautiful money printed by Fed remains in the vault. So its a vicious cycle..Basically bottom line fed is printing money but a very small part is actually circulating. So unless the money starts circulating we cannot even dream of inflation.

Another thing for inflation to kick in. Wages need to go up in US. You cant pay for something, the demand of it will go down, along with it the price. So in that respect too inflation does not make sense. In short high inflation should map to High wages. Without wages increasing exponentially inflation cannot increase exponentially.

The last inflation peak happened in US in 1980. That was mostly related to unionization.
File:US Historical Inflation.svg - Wikipedia, the free encyclopedia

With more acceptance of capitalistic philosphy in US, Unions have basically dissapeared here. What this means is your income depends on the market dynamics and cannot be fixed by the Union.. Look whats happening in the auto industry in Detroit. The gov wants to get rid of the auto union so that the Detroit industry can get better compete with the Japanese and international auto manafacturers. I believe with Globalization in the long term there will be stagnation or downward pressure on wages in the US. Unless US closes the border and introduces more protectionist measures which i dont think will happen.

So i would think HYPERINFLATION should be the least of our concerns for a long time.

How will wages increase in USA? On the other hand companies are cutting perks and forcing employees to take forced vacation. While more and more jobs are outsourced to L1s aor going abroad? If someone knows where this good old US of A is seeing job increase please let me know.

[akred]

Originally Posted by lahiribaba

How will wages increase in USA? On the other hand companies are cutting perks and forcing employees to take forced vacation. While more and more jobs are outsourced to L1s aor going abroad? If someone knows where this good old US of A is seeing job increase please let me know.

Here's one type of work that's seeing growth. But wages appear to be low as even the top earner mentioned in the report makes only 100,000.

[ronhira]

Originally Posted by lahiribaba

How will wages increase in USA? On the other hand companies are cutting perks and forcing employees to take forced vacation. While more and more jobs are outsourced to L1s aor going abroad? If someone knows where this good old US of A is seeing job increase please let me know.

With your skill set you can apply for a job at numbersusa. Anti-immigrant business sector is booming. That will be a good market segment for you to make lot of money. Have you tried applying there?