Prediction: "Hyperinflationary Great Depression" Within the Coming Year
John Williams of Shadowstats, a website devoted to analysis “behind and beyond” government statistics, has released a bleak assessment of where the US economy is headed. He predicts “a hyperinflationary great depression” and provides a timeline. Williams had initially estimated serious problems arising sometime between 2010 and 2018, but he now sees the high risk of hyperinflation “within the next year.”
To quote Williams (via Zero Hedge):
“The U.S. has no way of avoiding a financial Armageddon. Bankrupt sovereign states most commonly use the currency printing press as a solution to not having enough money to cover obligations. The alternative would be for the U.S. to renege on its existing debt and obligations, a solution for modern sovereign states rarely seen outside of governments overthrown in revolution, and a solution with no happier ending than simply printing the needed money. With the creation of massive amounts of new fiat dollars (not backed by gold or silver) will come the eventual destruction of the value of the U.S. dollar and related dollar-denominated paper assets.
“What lies ahead will be extremely difficult, painful and unhappy times for many in the United States. The functioning and adaptation of the U.S. economy and financial markets to a hyperinflation likely would be particularly disruptive. Trouble could range from turmoil in the food distribution chain to electronic cash and credit systems unable to handle rapidly changing circumstances. The situation quickly would devolve from a deepening depression, to an intensifying hyperinflationary great depression”
Here’s his view on when the hyperinflationary crisis will begin:
“The U.S. government and Federal Reserve already have committed the system to this course through the easy politics of a bottomless pocketbook, the servicing of big-moneyed special interests, gross mismanagement, and a deliberate and ongoing effort to debase the U.S. currency. Accordingly, risks are particularly high of the hyperinflation crisis breaking within the next year.”
The entire must-read post on the probability of a hyperinflationary episode in America is available at Zero Hedge. It includes illustrative examples and many more details.