How about 100% annual inflation and 50% unemployment

Question

I'm currently listening to an online seminar wit Bob Weidemeyer (who wrote After Shock) and Tom Hutchison (a wall street guy).
   They just stated that beginning in 2012 we'll see close to 100% inflation for 3 years. They also said we'd approach 50% unemployment.
   I can't believe things will get that bad without Armageddon!I guess if you own real estate and are employed, you'll be in great shape!
   Are these guys loonies??? Rich

Arthur Garcia · Answer

I've heard this guy before.  He is all about "doom and gloom" I my memory is correct, I believe he is owns an investment firm.  I am not saying EVERYTHING he is saying is off-point.  In fact, I think things are going to get a lot worse for the average American, but 50% unemployment is definitely over doing it.

I really do think we'll see high levels of inflation over the next decade.  There is no other way the government can pay off its debts without cuts (which no Politician wants to do), or raising taxes (which no Politician wants to do), thus inflate the debt away.

The good news is that the US is the nicest looking horse in the glue shop.  I also think as more debt-related issues arise across the globe, the central banks will be doing the same thing.  Maybe the decline of the dollar won't look so bad measured against the other declining currencies of the world.

I think the best strategy for protecting your wealth - fixed interest DEBT!  The best combo - under replacement cost rentals, locked in at a 5% interest rate for 30 years.

Thanks for the Post Rich.

Ryan B. · Answer

If we hit 100% inflation for 3 years in a row and 50% unemployment, it won't matter if you have a job or real estate.  Only guns and ammo will be all that matters there will be so much rioting and chaos.  Those boys are lunatics.

Kyle K. · Answer

These guys are definitely loonies. Let me guess: they advise you to buy a bunch of gold?

I'm not expert, but I feel like there is a gold bubble that is going to burst at some point (no idea when). Perhaps these fearmongers are trying to inflate the price of gold even further for a profit.

Account Closed · Answer

The cause of hyperinflation is very different from the cause of inflation. Inflation is the debasing of the currency by printing currency without any substantive backing.

When President Nixon in August 1971 took the USA off of the gold standard (without permission from Congress), he changed our asset-backed money into distilled-work currency. Our currency is backed by distilled work, instead of a tangible asset. When Ben Bernanke debases the currency (which was a death penalty capital offense in the 19th century), he is creating digital dollars at the speed of light without any distilled work to support the new dollars. Thus, the new dollars dilute the value of the existing dollars.

Hyperinflation is caused by demand destruction of the currency. Nobody wants the currency, so prices must skyrocket to offset the lack of demand for the currency. It can happen with or without excessive currency printing.

I seriously doubt hyperinflation will happen anytime soon with the United States Dollar, but I sure wish the US Mint would start minting pure silver and gold coins without a dollar denomination and only the weight and purity in Troy ounces. That would provide a faithful medium of exchange in the event of a currency crisis.

Two (digital) cents worth. Your mileage may vary.

Rich Weese · Answer

You're welcome Arthur. The only thing better than what you mentioned is ALSO having a bunch of free and clear properties-with enough cash to pay T&I etc. No risk. Rich

Bryan Hancock · Answer

GREAT post Arthur...It would be hard for me to agree more.

Rich Weese · Answer

I watched this while doing paperwork at my desk. They were REALLY positive about benefits of buying stocks with dividends and how the majority of money moade in stocks is re-investing the dividends.Examples were coca cola, Mc donalds etc.
   I didn't wait around for any sales pitch. The sponsor was Newsmax and Moneynews by Aaron DEhoog. I don't know anything about any of these, but I'm sure their info is out there. Rich

James H. · Answer

That's exactly right. With even just one or the other of 100% inflation and 50% unemployment, it would mean CIVIL WAR. And I don't think it would take even close to 3 years for it to fully manifest with those conditions.

Kevin Yeats · Answer

Rich, before I gave them any creedance, I'd like to know how they expect us to get there.

Even in historic hyperinflation situations, 100% inflation was not coupled with 50% unemployment.

With 50% unemployment, basically half of the businesses will have to close their doors.  That does not "jive" well with 100% inflation.

Keep in mind that 2012 is also an Election year.

What do they say are the causes?

Nathan Emmert · Answer

Given my current debt levels, bring it on!  Would love to make those $200,000 in college loans and $400,000 in mortgage look much smaller with some hefty inflation :)

How about 100% annual inflation and 50% unemployment

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