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Inflation or Idiot
My patience for utter stupidity and incompetency is growing slimmer with each passing day. I've gotten extremely sour and impatient with the morons that love to hear their own voices and have others think of them as capable of independent thought. The problem is that I'm completely surrounded by it. It doesn't matter if it's local media, main stream financial media, a friend of the family, or the janitor at work.
For those who do like to discuss these things with me, or while I'm within earshot, they've probably noticed my disdain by the tones of my voice or simply my body language. I don't do these things on purpose, but I no longer consciously try to subvert these subtle actions. I've simply reduced my responses to near one word answers and avoid anything that might entice the person I'm talking to into extending the conversation any longer than need be.
I'm not here to make friends; I'm here to, first and foremost, make money off the changing financial trends, and secondly, to inform those are willing enough to denounce the psycho babble heard daily on CNBC, and want to hear the rare, but honest and brutal truth regarding the financial/economic past, present and future. If this doesn't suit you, than read someone else...PLEASE!!
Which "Flation" Is It
As you can tell I'm a little irked today. The source of today's particularly pleasant mood is due mainly in part to the ever growing group of deflationist believers. Everyone who preaches these thoughts in an arena where people listen are criminals and everyone who believes these thoughts has let their lack of any intelligence whatsoever allow them to fall victim to the sociopathic politicians, fat cats, and talking heads.
The reason for pushing these ridiculous notions is to calm the potentially massive public backlash that would exist if the citizens of this country were actually informed.
Juicing the Printing Press
Let's look at this from a practical stand point.
The Federal Reserve has already lent over $2 trillion through its different lending facilities. The recipients of this money have not been released. Bloomberg has recently filed a suit under the U.S. Freedom of Information Act to find out who this money was going to.
They Fed has denied access to the information. This does not pertain to the topic of inflation, but is another example of outright criminal behavior undertaken by the authorities.
Anyways, since the middle of Sept. to the beginning of November, the Fed has increased facilities lending by $1.23 trillion marking an increase of some 138%...in just 12 weeks!
After Lehman Brothers went bankrupt, regulators entered panic mode. For those who don't know, when regulators panic, the hop in their expensive Mercedes, or Lincoln, or whatever fancy car they drive, and head straight to the printing presses. They flip the switch from "Jesus was printing a lot of money" to "Holy Hell warp speed," and that's exactly what they did.
By the end of Oct., year over year money supply growth was 38%. For those of you who don't know, when everything is shaken out, money supply growth exactly equals price inflation. Anyways, the last time the money supply was growing at something remotely close to the 38% figure was in 1939 when money supply growth was 28%.
Little did we know that we were just getting started. Once the first week of Dec. rolled around the Federal Reserve really kicked it into gear. In Dec. 2007, the monetary base was $836 billion. In Dec. 2008, the monetary base is $1,479 billion. That's a growth of 76% year over year.
There's an interesting little twist here. Leading up to the Lehman Brothers collapse, the Federal Reserve held the monetary base relatively steady. This means that the majority of the staggering 76% money supply growth has taken place in the last three months. That's an annual rate of approximately 300%.
(Some figures and statistics provided by William Engdahl)
HELLO!?! Is there anybody in there? The Federal Reserve is printing money multiples faster than anything we have ever seen. If you want to peer into the crystal ball on what the U.S. is going to look like in a few years, have a look at Zimbabwe. What's really interesting is that we haven't seen anything yet. Wait till the bottom really drops out.
All in all, while writing this article I've calmed down a bit. In actuality, I should be thanking all the deflationists and those who pimp those theories. You can continue to buy your near zero yielding U.S. Treasuries with the belief that you are gaining any sort of real return. I should be thanking you. Afterall, I need someone to be on the other side of the trade while I short those worthless pieces of garbage.
Nicholas Jones
Analyst, Oxbury Research
Published at Investorideas.com Financial Article Feed : http://www.investorideas.com/RSS/feeds/II-Art.xml
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