U.S. Economy Will Enter Hyperinflation, Marc Faber Says

[marmar]

U.S. Economy Will Enter Hyperinflation, Marc Faber Says
By Shiyin Chen and Bernard Lo


May 27 (Bloomberg) -- The U.S. economy will enter “hyperinflation” because the Federal Reserve will be reluctant to raise interest rates, investor Marc Faber said.

“I am 100 percent sure that the U.S. will go into hyperinflation,” Faber said. “The problem with government debt growing so much is that when the time will come and the Fed should increase interest rates, they will be very reluctant to do so and so inflation will start to accelerate.”


http://www.bloomberg.com/apps/news?pid=20601087&sid=acRDinBK0db0&refer=home

[BeFree]

1. Really

It is the only way out of this mess. We pay back today's $100 loan with tomorrow's inflated dollars. It will take a long time, but after inflation runs its course, our wages will have inflated also, so someone making $100 a day today, then will be making $150 and paying off that $100 loan with the inflated dollars. Same with the government. It is the only way to make the horrendous deficits disappear.

[doc03]

8. Really, haven't you noticed wages haven't been keeping up

with inflation for like 30 years. What about those of us on a fixed income, what do we do get a job at McDonald's to pay our bills? All this deficit spending worries me too, I think it is insane.

[BeFree]

9. My wages have deflated

And we haven't seen hyper-inflation yet, not like we will see. Ya think gas was bad?

I hate to see it happen, this hyper-inflation, it will cause great pain to most people, but it's the only way to pay off the huge debts. Maybe we could just keep the debts and not pay them off?

[doc03]

10. I think you are right we

will get the hyper-inflation. Same here my wages have deflated for years and next spring I would like to retire. My dad retired back in 1972 with a decent pension and the inflation of the seventy's ate it up, it seems like the working person never gets ahead. It looking like I may have to work as long as I'm able.

[BeFree]

11. Yeah

If you have the means and the courage, go into debt yourself to protect yourself. That way you pay off today's loan with tomorrow's inflated dollars.

But the timing has to be just right. You can bet the bankers are looking for just the right debts and the timing.

God help all us peons when it gets going.

[asteroid2003QQ47]

18. 'Tis the folly of youth. eom

[lovuian]

2. this was planned of course ...they wanted to destroy the $

its use has run out
they want now to go to the Amero a new currency and unite Canada and Mexico under one nation

thing is the plan is going to fail

[rucky]

3. I thought everyone was afraid of deflation a couple months ago.

:shrug:

[Yupster]

13. We'll probably have deflation for some months

The government is pushing interest rates to nothing. People are willing to buy government bonds for 2 % interest just for the safety of them.

But with the government needing to borrow over $ 150 billion a month they're going to have to offer higher interest rates soon to attract investors. Then the inflation will start and how to stop it is the question. Traditionally the way to stop inflation is with a recession.

Our deficit is at $ 1,800 billion this year. That's paying 2 % interest on our huge debt. What happens when the interest rate goes up to 6 % ? How will we ever find enough people to keep buying our bonds, and how will we even have a chance to try to think of how we could ever hope to pay off such a debt?

Look at it another way.

If these insane deficits don't cause a disaster for the country, then poor President Clinton will be banging his head on the wall thinking all that effort I made to balance the budget and these guys are spending money like crazy and nothing bad is happening. I could have had a great time spending three trillion dollars too.

[CoffeeCat]

4. Ok, maybe I'm just not smart tonight...

...but why is an important article like that so short?

And who in the hell is Mark Faber?

And when does he think this hyperinflation will begin?

[spotbird]

5. What do you do about it?

What protects an investor from inflation?

[Jack_DeLeon]

6. I certainly hope so...

I'm stocking up on metals and other tangible goods that I can potentially resell in the future for more inflated dollars. Hopefully pay off my home real quick. :)

Sucks if you are saving money though.

[nolabels]

7. "Bloomberg Economics" is almost as bad of a oxymoron as "Fox News"

:crazy:

[DeltaLitProf]

12. Faber seems to be some investor Bloomberg reporters have on speed dial

Whenever they need a pessimistic forecast, he's the go to guy. But he can't pick a stock worth a crap. Here's what he said Sept 2:

"Faber said he favors shares of AMR Corp., American Airlines' parent company, even if the air carrier is ``disastrous.'' The stock's 54 percent slump in 2007 and this year's 26 percent slide makes AMR appealing, he said."

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aSm5dnPHAo0U

And yet the stock hasn't risen since and is still in the basement:

http://www.hoovers.idmanagedsolutions.com/charts/advanced/advanced.chart?&ID_NOTATION=251657&TYPE=line&ID_BENCH1=&ID_BENCH2=&AVG1=&AVG2=&IND_MAIN=&IND_1=&IND_2=&INDPARAMS_1=&INDPARAMS_2=&AXIS_SCALE=lin&RESOLUTION=M&TIME_SPAN=5Y&WIDTH=480&HEIGHT=300

[MercutioATC]

14. I said this months ago and got shouted down.

Well, not "hyperinflation" like Zimbabwe, but "chronic inflation"...double-digit for a period of years...


I think we're past the point at which we could have avoided it.

[leftofthedial]

15. 30 years of neocon corporatists printing money? inflation?

nah.

[Greyhound]

16. We might see a short period of deflation as failing companies seek to unload

existing inventories in the hopes of raising enough capital to survive, but it will be short lived if it happens at all, in the end most if not all of them will die. It is likely that this will not be permitted because of the devastating effect it would have on the consumer's psyche.

This will be followed by what he is writing about, it is the only way to get out from under the crushing debt we have created in propping up the financial industry. Whether it is 40% annual inflation for 20 - 30 years or 200% for a shorter time, we have to make the dollar worthless to pay off the debt.

There is of course, another alternative that is not spoken of and never will be, at least in any financial or governmental circles. That would be to simply withdraw from the game of global financial monopoly that is the fractional reserve central banking system. IOW, we can take our marbles and go home.

With some relatively minor adjustments to our system, America is entirely self sufficient. We don't need anybody else to live. We can make everything we need, we have such abundance of food production that we could easily feed the world, we have all the natural resources required to sustain ourselves, including energy as long as we halt the purposefully wasteful methods currently used and eliminate our global military dominance.

The downside to all this of course, is that it would devastate the fortunes of most of the biggest parasites on earth, so even if we decided to follow this course (highly unlikely as the brainwashing has been terribly effective), we can be assured of an enormous, multi-front assault, we would become international pariah's to a degree that even Idiot Frat Boy could not approach.

The Chinese alone would probably assault us as their parasites have just begun to enjoy the benefits of the current system. The Europeans and the Russian's, the Indians and other Asian nations might well band together to fight us both militarily and ideologically. The Mexicans would probably side with us since they know full well that we represent their best chance of survival, but the Canadians could go either way.

But fear not, none of this would ever be allowed. The parasites that run the world are safe and, in the end, will succeed in their quest to unify the planet under their control. Yes, it will really suck to be us for a couple of generations, and there will probably be a lot less of us when it is all said and done, but we will let it happen because it is so much easier to surrender than to fight.

[voc]

17. Easier to surrender than to fight...

The truth,
Surrender has already happened.