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Posts Tagged ‘hyperinflation’

Tsunami of Inflation to Hit U.S. with Japan Crisis

March 17, 2011 Comments off

inflation.us

The earthquake, tsunami, and nuclear disaster that hit Japan this past week and the destruction that it caused is nothing compared to the tsunami of inflation that will soon hit the U.S. as a result of this crisis. A tsunami of inflation in the U.S. will mean a complete collapse of our monetary system, which could lead to millions of deaths due to a lack of food and heat. 44 million Americans are now dependent on food stamps, but when the U.S. dollar becomes worthless as a result of hyperinflation, the government will no longer have the power to support these Americans and many of them will simply starve to death.

Japan’s citizens were smart enough to save up $885.9 billion in U.S. treasuries to spend in a situation like it finds itself in today. The U.S. has no such savings and is the world’s largest Read more…

The Coming Rout QE3

March 11, 2011 Comments off

chrismartenson.com

There’s a scenario that could play out between May and September in which commodities (including my beloved silver) and the stock and bond markets could all sell off between 20% and 40%.  The trigger will be the cessation of QE II and a multi-month pause before QE III.

This is a reversal in my thinking from the outright inflationary ‘buy with both hands’ bent that I have held for the past two years.  Even though it’s quite a speculative analysis at this early stage, it is a possibility that we must consider.

Important note: This is a short-term scenario that stems from my trading days, so if you are a long-term holder of a core position in gold and silver, as am I, nothing has changed in my extended outlook for these metals.  The fiscal and monetary path we are on has a very high likelihood of failure over the coming decade, and I see nothing that shakes that view.

But over the next 3-6 months, I have a few specific concerns.

It’s time to build on the idea I planted in the Insider article entitled Blame the Victim (February 28, 2011) where I speculated on the idea that the Fed might be forced to end its Read more…

3 Ways to Prepare for Inflation

February 19, 2011 Comments off

In case you haven’t heard,inflation is on its way. Unprecedented levels of government debt and deficits will likely weaken the value of the dollar at some point, thus raising the prices of everything it buys.

But, the Federal Reserve says there’s no significant inflation yet. In fact, it recently said there might be too little inflation and will likely keep interest rates low for the foreseeable future, further increasing the money supply. Meanwhile, commodity prices are going through the roof.

The price of copper has more than tripled since the end of 2008, oil is near $90 a barrel (also near the high since the financial crisis) and prices of several food commodities like corn and wheat are near all time highs. These materials are in turn used to make many consumer goods. It’s only a matter of time before higher input prices come out the other end in the form of higher prices for consumer goods.

In fact, inflation has started to Read more…

Silver Reaches New 30-Year High!

February 19, 2011 Comments off

Silver reached a new 30-year high today of $32.87 per ounce up 89% since NIA declared silver the best investment for the next decade on December 11th of 2009 at $17.40 per ounce!

The gold/silver ratio is now down to below 43. NIA predicted a sharp decline in the gold/silver ratio both in its top 10 predictions for 2010 at 64 and in its top 10 predictions for 2011 at 46. We believe the gold/silver ratio will decline to at least 16 within the next few years, but it could decline to as low as 10. It wouldn’t surprise us to see gold reach $5,000 per ounce in 2015 and silver reach $500 per ounce at the same time!

NIA’s President Gerard Adams publicly exposed JP Morgan’s silver naked short selling price suppression scheme in Read more…

Mexico’s Big Freeze – 80-100% of Crops Damaged, Expect Shortages and Higher Prices

February 11, 2011 1 comment

Kevin Hayden

I received an email from a reader regarding Mexico’s freeze damage over the last few weeks.  In summary, large-scale producers of foods, such as Sysco, have sent out emails to major vendors explaining that there might be shortages of row crop foods due to freezing temperatures that hit Mexico.  It goes on to say that Florida is normally the ‘Plan B’ as they grow many of the same varieties, but they’ve been hit hard by freezes as well and have lost most of their orange orchards.

It also details that expected shortages could be counted on 30-60 days from now and that Mexican farmers are still unsure of their next step – do they they try and quickly replant, hoping for a late March-April yield?  Or disc the fields and wait?  Other information coming in states that many of these crops have doubled, tripled or even quadrupled in price.  For example, a carton of tomatoes went from $6.95 all the way up to $22.95 in one week.  And that’s just one example!

This WILL affect your food cost and supply.  If you’re not going to your local farmer’s market, now is the time to make friends and Read more…

What does China want from Zimbabwe?

February 10, 2011 Comments off

Zimbabwe has claimed that China is ready to pour $10 billion (£6.2 billion) into its ailing economy. If the figure is true, what might Beijing want in return?

China's Foreign Minister arrives in Zimbabwe on Thursday amid talk of a controversial deal that could see it take control of the country's vast platinum reserves in return for a multi-billion dollar cash injection.  

China’s Minister of Foreign Affairs Yang Jiechi Photo: REUTERS
Malcolm Moore

By Malcolm Moore, Shanghai 8:13AM GMT 10 Feb 2011

When Yang Jiechi arrives in Harare on Thursday, for the first visit by a Chinese Foreign minister in a decade, he is almost certain to be bearing gifts.

After almost three years in which China has publicly shied away from Zimbabwe, there are signs that Beijing has its eyes, once again, on the country’s rich mineral reserves.

Since the deadly elections in 2008, which forced Robert Mugabe, Zimbabwe’s president, to form a “unity” government with his opponent Morgan Tsvangirai, relations have cooled while Chinese officials hedged their bets over the country’s leadership and squirmed in the fierce glare of international condemnation.

“China gets embarrassed when embarrassing details become public,” said Philip Barclay, a former British diplomat in Harare and the author of Zimbabwe, Years of Hope and Despair.

“And the Chinese weapons shipment which arrived in 2008, just at the time when violence broke out around the Zimbabwean elections, was very embarrassing. They really did not like that,” he added.

On Thursday, however, Mr Yang is likely to start negotiations over a significant injection of Chinese investment.

According to Tapiwa Mashakada, the Zimbabwean Economic planning minister, Mr Yang may be carrying with him as much as $10 billion of investment from Beijing.

“We have met with officials from China Development Bank and they have said they are willing to invest up to $10 billion,” he said, at a business conference in Harare earlier this month.

“The Chinese are looking into mining development, that is exploration and exploitation, agriculture, infrastructure development and information communication technology,” added Mr Mashakada, a member of Mr Tsvangirai’s Movement for Democratic Change party.

Previous rumors suggested, however, that the money on the table is actually a $3 billion loan from China’s Export-Import (Exim) Bank. Both sums dwarf previous Chinese investments in Zimbabwe, and Mr Mashakada’s claim represents more than twice the value of Zimbabwe’s entire economy last year, and more than all other Chinese direct investments in Africa in 2009 put together.

“It is a pie-in-the-sky figure,” said Mr Barclay. “It is much larger than previous Chinese investments and when they do invest money, the Chinese expect concrete benefits, usually closely linked to concessions,” he added.

More likely are targeted deals, perhaps for Zimbabwe’s platinum and zinc mines. Zimbabwe has the second-largest reserves of platinum in the world after South Africa.

Details of the Exim bank deal reported in Zimbabwe’s respected “Independent” newspaper cite documents proposing a “master-loan facility” aimed at resuscitating Zimbabwe’s struggling economy after years of hyperinflation and disastrous government policies.

In return, China reportedly wants control over platinum deposits currently owned by the Zimbabwean government in the Selous and Northfields concession covering 68 square miles and valued at between $30 billion to $40 billion.

More controversially, China may also have its eyes on the Marange diamond fields in Chiadzwa. In late 2008 the Zimbabwean military is alleged to have seized control of the fields, shooting illegal miners from helicopter gunships.

Currently, a small proportion of the diamonds from this vast mine are certified by the Kimberley Process to avoid being tagged as “blood” diamonds, but a much greater quantity is thought to be bought up by dubious traders with profits flowing to Mr Mugabe’s Zanu-PF.

China already mines one alluvial diamond concession at Chiadzwa in partnership with the government under the banner of Anjin Investments. There have also been rumors that China may be involved in further illegal mining activities, but they have never been confirmed.

In addition, some Chinese investment could flow into agriculture. China imports a significant quantity of tobacco from Zimbabwe, and may have one eye on a future source of food for its growing middle class.

Around 5,000 Chinese workers live in Zimbabwe, and the two countries have a relationship stretching back to the founding of Robert Mugabe’s Zanu-PF, whose Marxist revolution was partly funded by Beijing. Over the years, China has found it easy to do business with a country that was run along similar lines, with Zanu-PF’s politburo making unilateral decisions.

It is not clear if dealing with the unity government and Mr Tsvangirai’s MDC party will be to Beijing’s taste, but for Zimbabwe there seems little option.

“The MDC will send China warm and fuzzy messages too,” said Mr Barclay. “Although the investment from China is not a particularly good fit, the Chinese are the only investors out there. There was a small delegation from Germany in 2010, but they backed off.”

THE EURO & U.S. DOLLAR COLLAPSE & DEVALUATION OF 50-70%

February 9, 2011 1 comment