John Williams with Jay Taylor on the potential of hyperinflation
John Williams says the real economy has never completely recovered and that hyper inflation could still result because the dollar will eventually collapse.
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I believe John’s premise is that the U.S. dollar will lose its reserve status. and for what might cause that you may want to listen to my discussion on my radio show today with F. William Engdhal at VoiceAmerica.com at 3:00 PM ET.
That would be something valuable to do. (Listen to Jay’s show today)
Have we ever had a world reserve currency before that was not based on gold?
+1!
For years, I’ve wondered why this “minor” detail doesn’t get addressed by market historian Bob Hoye (I don’t expect Martin Armstrong to address it).
They don’t wanna see it!
Hoye is a clever guy but his real price of gold theory is a load of junk – ironically because we are not on a gold standard.
It is demonstrably not a load of junk if you know what you’re looking at. Profitability matters!
I thought the hyperinflation was due in 2014? No sign of it yet!
I am going to listen to his interview for a good laugh.
Dave, no sign yet is evidence of nothing. I, for one, did not think it was due in 2014. To put a time frame on such a prediction is very risky business.
One thing is certain, the Fed’s efforts will have an impact far greater than most anticipate.
http://www.economicgreenfield.com/wp-content/uploads/2015/02/M2SL_2-19-15-11700.9.png
Mr. Williams has been consistent – consistently wrong about his prediction of price hyperinflation. Check his record – he has been calling for imminent hyperinflation every year since the mid 90’s!! According to Mr. Williams, hyperinflation is always just over the horizon. Not a single interviewer has ever asked him to explain why he is so wrong.
Good to listen to, although I agree w/David, so far. Fact is, gold is down 5% this month alone. What JW says may be true, but it’s not true yet, seems.
I think people use his statistics for their own agenda.. he is never right… go figure..
His stats are right; his guesses haven’t been.
Hyperinflation occurs when both the discounting of treasury bills and the requirement to replenish the money supply compete ferociously.
That people are in desperate need of currency while the banks are at wit’s end trying to make money on the money markets. Thus you have higher interest rates at the same time as more money is printed to meet with demand for cash for transactions.
Imagine the horror when the money you have on hand doesn’t cover immediate necessities and banks unable to fill their reserves adequately in short term obligations. So they sell into an already declining market, but that raises interest rates, where nobody can meet with the previous burdens, so money is added, because the demand for cash becomes acute.
+1
JW never answered your question Jay. Where is the big global money supposed to go? If not the almighty u.s dollar. Sincerely. Why did you let him go on that
Exactly, and that is probably the nut of this whole issue.
There will come a day when the almighty dollar is no longer almighty. I just finished my live show with William Engdhal at Voice America and if you listen to that show tomorrow at JayTaylorMedia or perhaps tomorrow here at the KE report, you will realize that the dollar is already not as mighty as it seems to be. Russia, China and other countries are putting up a fight economically and the truth about their success is at least partly obscured by our mainstream propaganda. As things stand now, the economy is decidedly deflationary. But Williams whole thesis is based on the assumption that the underlying economic and financial structure will take the dollar down. Part of that structure has to do with the big lie about the dollar’s worth which is based on a military industrial complex that has forced countries to us the dollar for oil trade and others trade but primarily oil. The choice according to Engdhal is either to work with Russia and China and allow them to retain their sovereignty or to to launch World War III because neither Russia or China will allow the U.S. and NATO to take over their countries. What is going on now between Russia and the U.S. and China and the U.S. is very serious. We can only hope and pray that cooler heads prevail.
Williams has been calling for Hyperinflation “forever”. He’s on KWN every few months, and other programs, and no-one has the guts to nail him down and ask why he was wrong on such & such dates. It’s OK to be wrong. Just explain what happened, and the fact that maybe something has changed. There may even be a situation where your premise is just flat wrong……he is not willing to do that.
If you listen closely I think he does provide some reasons why his timing has been off. If he has made a misake it is in being to sure about when the dollar will collapse because that is the whole key to his hyperinflation thesis. No one can be so sure but geopolitics may well play a role. I would suggst you listen to my interview with William Engdhal that I believe might be posted as early as tomorrow here and it will be posted at JayTaylorMedia (podcast page) tomorrow morning.
The Western Banking Cartel and Financial System would need to implode first with the USDX with very few survivors in the middle of the chaos or we experience a period of devastating deflation followed by hyperinflation.
The odds favor a devastating massive deflation first. Anyone who is speculating in the precious metals thinking hyperinflation is on the horizon has an I.Q. no bigger than their shoe size.
The world has over a billion or two that need jobs. We are entering a massive deflationary period.
Next year gold will be much lower than it is now and a world war will only add to those woes.
Yeah, well the hyperinflation is much more likely to happen in Europe or Japan first before it comes to the USA. I mean hyperinflation is an existential problem with a currency and involves its repudiation and the Euro already has an existential problem,
Since the USDX US dollar index is a geometric mean, if either the Euro or Yen on the denominator goes to zero, the USDX with tend towards infinity.
The hyperinflation thing is kind of BS I think, unless the velocity of money or money multiplier suddenly jumps up back to normal levels. These two have been right down on the floor since 2008.
Otherwise, there is little or no inflation in the USA for some time more.
And another thing… The German hyperinflation in 1923 came afgter 10 years of consistent inflation from 1913 to 1923 with t little deflationary interruption around 1921. By 1920 the German Mark was down 93% and prices were already up 10x since 1913. So it took a long time to gestate. Even in little Zimbabwe, the hyperinflation took plenty of time to arrive.
I can see that there is a possibility that we are in the sweet spot now for asset prices. All inflation is asset inflation, more or less. If the money all goes into commodities again, then there might be serious inflation at some time in the future, even in the USA. However, on the demand side, commodities have nowhere to go right now, so how can commodities skyrocket when there is not much demand?
I think we could be in an extended US dollar bull market cycle and maybe it has a way to run.
SB Dave, hyperinflation has very low odds right now. We will experience hyperinflation just not in the near term. Oil has been key here. I’m surprised gold s not trading at under 1000 lately.
Hyperinflation is a lottery ticket in the metals. Need to wait until this deflationary cycle is complete.
All these guys like Jim Sinclair are not to be listened to and should be tuned out. The way things are right now The Central Banks couldn’t inflate their way out of this bubble no matter how much money they print. Interest rates are at 500 year lows.
Agreed.
One rule I know is that issuing new money will result in inflation. It has been and it will be. This is like night following day. We just need to analyse it logically. If new issuance of money does not result in inflation, the extra money will result in extra buying power, it also means that we can just create wealth by no additional work. It is impossible. The extra wealth can only be created by working harder or working smarter. If printing extra money can increase wealth, the previous thousand years people would have figured it out. It would not wait for this long. Why in the history, most places use PM as money, it is not because it is easy to print. It is exactly it is harder to create new. If issuing new money create no inflation, PM would have disappeared long ago since it is so clumsy to print.
Let me say this. The way I see it I have 10% of my assets in Gold. It’s insurance for me.
Nothing more. But I admit, there’s no fever like gold fever….
Off topic. I heard that China has pre-paid Russia 270 billion dollars for 25 year oil gas supply. Putin seems no longer lack of money. With Russian low cost of war, this can last him several more years. Not sure about the news reliability though. If it is true, China and Russia has firmly aligned with each other. This amount of money is huge.
BEST combo of speakers to date……………
ok.,one of the best………….
My order for Sprott silver fund is filled.
Rick Ackerman has it right, he says ” You will never see hyperinflation because you could peel a couple of banknotes out of your wallet to pay off your mortgage, and the banks can’t allow this to happen.”
Do you stock bulls need a bigger wake-up call than this?
Matthew, do you see a rate increase in December, it now seems more probable than ever that they will raise rates one quarter of a point.
If they do, it will be bad for the dollar (buy the news; sell the fact):
http://www.graceland-updates.com/images/stories/15nov/2015nov17usd1.png
Like Peter Schiff and Rick Ackerman, I don’t see how they can do it unless real rates fall further at the same time as Stewart Thomson suggests:
“I’ve talked at length about the relationship between US money supply velocity and interest rates, and done so in a positive way.
A modest rise in nominal interest rates encourages banks to make loans, and it makes those loans profitable. Most of the QE money has either just sat in bank coffers, or it has been inefficiently invested in US government bonds.
I’ve strongly suggested that modest nominal rates can reduce real rates, by creating inflation. That’s negative for the US dollar, and positive for gold.”
Thanks for the input Matthew, always appreciated. DT
Btw, I think Bill Bonner is still in the “no way” camp like Rick Ackerman.
Like Nassim Taleb, Bonner believes that “We will go from deflation to hyperinflation without seeing inflation.”
The only thing that a one quarter point increase would do is provide some, what I think would be be, very important eye wash.
Hyperinflation is still laughable.
The global debt pile is still unwinding (de-leveraging) and the demand for USD has continually increased as foreigners that have borrowed need to pay the money back to US.. They loaned a pile out!
Hyperinflation is always a possibility as long as CBs print large mount of money relative to the monetary base. Argentina had large debt too but it did not prevent them from hyperinflation. There are a lot of $ outside of US already, the money comes back to will increase the money further. China, Russia and OPEC members are all selling there treasuries. The money they get will be used to purchase things. Nobody knows these dollar will come back to roost or not.
Exactly. And it will remain laughable to most people until it’s well underway.
Hyperinflation or not, fiat currencies will continue to do what they do best —lose value.
The best case scenario is a slow grinding down. The trend is our friend.
How can they not lose value, Matthew, with all of the printing that is going on.
I know, Al, yet dollar bugs abound!
Mathew another years has passed and Ive been correct about the Day dollar and gold.
The dollar should move another 5-10% against the loonie.
There is much repaitriation of global debt to come and that will keep the demand on the dollar. Mr Williams has been wrong and is dead wrong ahead. I respect Jay but I use to subscribe then I bailed on gold eons ago while many clung on.
Respect Mathew. You have done some good research.
It aint going to happen. Theres a huge absorption rate and a seinor currency has never hyperinflated. The inflation is much higher in Canada. I wish I was in the US it’s virtually non existent.
It cost $100 a sq ft to build In Texas. Its $400 in Toronto.
I could go on for an hr if I had time.
And gold to new lows!!!! Hate to say I told ya so a long time ago.
Bill, the senior currency has always been gold-backed, until now.
No, I do not expect the dollar hyperinflate versus other currencies. They’re all going to continue to go down in purchasing power.
The problem with John Williams is that he is using old world methods. The world has changed. He has been announcing hyperinflation for years now, moving the goal posts. Used to subscribe and he had my interest until I realized his metrics do not necessarily mirror our current situation.
Yes Gloria MANY have gotten killed as they are using and old yard stick in a world that requires a lazer.
Interest rates are not going up in Canada and will go up VERY slowly in the USA.
So not much will change. US will plug along better than most.
I know only a few that have been doing well for the past 6 years.
I hate to remind yas.
Jon Nadler gets it.
http://www.avaresearch.com/articles/691/Dismantling-John-Williams-Hyperinflation-Predictions.html
Yup
Written YEARS ago and that was before the bull peaked!!. Pull your heads out of your asses….
I thought a world reserve currency has never hyperinflated.