12/15/10 Stockholm, Sweden – There are those predicting inflation, those predicting deflation, those in between… and then there’s the ultra-hardcore hyperinflationists. It’s easy to see where John Williams, founder of Shadowstats.com, fits in. He’s forecasting a hyperinflationary future which he anticipates coming home to roost within months.
To say the least, it’s an aggressive prediction. Still, it’s compelling to get his forecast given his diligence in crunching US government statistics in the feds’ own original and now old-fashioned way, long before the numbers were quite so massaged — almost like a TSA pat down — prior to being released upon an unsuspecting public.
In the clip below, Williams presents his perspective and offers some advice for hyperinflationary times. Here’s a highlight from the interview:
“In the US we don’t have a backup system. Zimbabwe had the worst hyperinflation anyone’s ever seen. But they survived, they had an ongoing economy. That was because of the black market in US dollars… we don’t have a black market in the US. There’s no backup to our system.”
For additional perspective you can also read a rebuttal to Williams’ argument. It’s available from Mike Shedlock here.
Rocky Vega
Rocky Vega is publisher of Agora Financial International, where he advances the growth of Agora Financial publishing enterprises outside of the US. Previously, he was publisher of The Daily Reckoning, and founding publisher of both UrbanTurf and RFID Update -- which he ran from Brazil, Chile, and Puerto Rico -- as well as associate publisher of FierceFinance. Rocky has an honors MS from the Stockholm School of Economics and an honors BA from Harvard University, where he served on the board of directors for Let’s Go Publications, Harvard Student Agencies, and The Harvard Advocate.
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It seems that Shedlock did not really watch and listen to Williams’s comments. Specifically, that the US Federal Reserve is the most aggressive Central Bank to make currency devaluation its primary goal. Additionally, although there is massive credit deleveraging in the private sector, the public sector is overwhelming it, leading to net credit growth. As far as “Consumer attitudes and bank attitudes,” the world saw how quickly they can change in 2008. Could not the same type of panic cause an exodus from the US dollar as a safe haven?
Yes, Shadowstats.com paints a very drastic scenario, but Shedlock fails to address his major point on how $4-5 trillion dollar deficits will be financed and how could the Federal Reserve ever have the will to raise interest rates in an environment where inflation becomes uncontrollable.
Interesting interview of John Williams, with the interviewers refusing to take seriously Williams’ envisioned scenario. “Please give us some good news!” the woman seemed to be begging.
My sense of the situation, especially after listening to Porter Stansberry’s presentation about the coming dollar collapse last night, is that Mr. Williams is being very moderate in predicting what seems very likely to happen.
It’s funny how the mainstream media don’t want to believe that things could get that bad in the U.S. The facts of the situation indicate otherwise, but they can’t imagine it.
We’ll soon find out who’s right. My money’s on John Williams.