USA a banana republic with Zimbabwe-style hyperinflion?

redrumloa

redrumloa

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Marc Faber thinks it could happen with 200% inflation.

http://www.cnbc.com/id/29047443

The US risks being hit by Zimbabwe-style hyperinflation and there are signs that the world's biggest economy risks turning into a banana republic, Marc Faber, author of the Gloom, Doom & Boom report, told CNBC's "Asia Squawk Box."

"In the US, we have a totally new school, and it’s called the Zimbabwe school," Faber said. "And it’s founded by one of the great leaders of this world, Mr Robert Mugabe, that has managed to totally impoverish his own country. And that is the monetary policy the US is pursuing."

The government's increased intervention in the economy is likely to slow down economic growth because history shows that every time the private sector shrinks to make way for the government sector, the economy suffers, he said.

Asked whether the US risked being faced with 200 percent inflation, Faber answered: "Well, not yet. Not yet. But I think eventually. If I look at government debt in the US, and debt in general, I think the only way they will not default physically on their debt is to inflate."
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Yeah. The US has let itself fall victim to the same things it did to Zimbabwe - only in Zimbabwe the US did it through the World Bank and the IMF, making Zimbabwe take out loans it could never repay and then squeezing the juice out of them. It has the same sort of predictable effect as it did on Germany when the world powers made them pay tribute (erm... reparations). All wealth is exported and there is nothing left in the country to back up the money.

In the US they did it to themselves by borrowing crazy amounts to produce nothing of worth. For all the money borrowed and spent the "wealth" was just numbers. Where the highways and bridges maintained? Was any significant infrastructure installed. (These things ARE wealth and they facilitate economic activity which is what gives them value).

No, instead the money was squandered on gambling and wars - neither of which are in any way productive.

Right now there are trillions of dollars that don't really exist and as production has moved more and more overseas, less and less reason to hold dollars except as a "value store". The less there is made by the US, the less reason to hold dollars for buying stuff. The only thing that floated the dollar for 30 years is that you need dollars to buy oil. If the world replaced oil energy with, say, nuclear energy - well then the world would not be beholden to the US-Saudi petrodollar deal. Instead currencies of Uranium producers would become important (like - could you imagine Kazakhstan!!)
 
We are still on the path to hyperinflation. I think we will start seeing larger price moves next year and then massive price increases in 2013. On the positive side, my underwater house won't be under water anymore. On the negative side, there will be widespread bloodshed in the streets.

Look at a chart of gold from the original post until now.
 
There will not only be more bloodshed, there will be starvation as well. Give it three or so years, people of the US will be begging for a stable currency to use. Enter the Pope's wishes of a world bank and it's currency. Cain is our only hope out of this drive towards suicide, and even he maybe too late.
 
Dammy said:
There will not only be more bloodshed, there will be starvation as well. Give it three or so years, people of the US will be begging for a stable currency to use. Enter the Pope's wishes of a world bank and it's currency. Cain is our only hope out of this drive towards suicide, and even he maybe too late.
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Cain is no savior, he is a lapdog of the Federal Reserve and the banks. For all I like about what Cain says, the fact he is a banking lapdog means he is bought. We need Ron Paul, period.
 
redrumloa said:
We need Ron Paul, period.
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I think that's true but the establishment will keep putting up Cains and the like and try to tell people that such candidates have more "legitimacy" because they get more time in the debates or face time on the TV but who controls the debates and TV? The establishment. You can't get the change that you want by voting for the "change" that is offered to you by the establishment. This is the failure of the Tea Party. They really wanted change and were willing to join an organization to get it but they ended up being offered a bunch of establishment candidates to vote for (that is, not of the installed politicians per se but candidates who are by, for and of the elite).
The only way you can get the change is to go all out for and commit to the anti-establishment candidates and the number one such person with a strong historical credibility is Ron Paul. Do not fall for substitute anti-establishment candidates that get thrown at you just because the media tells you they are "more electable".
 
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