John Williams Shadow Stats

[TheEnd]

Janet Yellen will keep playing the 0.00 rate game until she realises its not working and they literally HAVE to do something else.

 

[dccpa]

JW left himself an out by stating that hyperinflation will start by the end of 2014. What exactly is the start of hyperinflation?

While I agree with you on this part... I'm not sure how Obammy will be able to 'control' hyperinflation as it'll be caused by those holding dollars outside of the US.
The way I understand JW's is proposing the hyperinflation kickoff is when those outside the US lose confidence in the USD's they're holding and try to get rid of them for something of value. In this environment, all the other holders of $US will be doing the same and will not be accepting $US as payment, the only country that will being the US.

These foreigners will be trying offload as much of their $US for US products/real estate as they can before other foreigners can compete for the same limited resources. The price rises will be so dramatic that US citizens will be essentially excluded from the market as prices get bid higher and higher by overseas 'investors'.

JW's proposes the only way the US Govt. can stem the tide is;

1) Offer these foreigners attractive Govt. bonds, Unlikely to be bought by foreigners as these will be just another proxy for more worthless paper money created out of thin air.
2) Capital/Price Controls
3) Destroy the currency.... create a new currency, make the old dollars worthless, so that there can be no claims on US assets or goods.

You are looking at in the wrong context. It is not the US vs. the world. Most of the rest of the world governments like the status quo and would assist the US. So, most of the foreign governments will buy USDs to stabalize their own currencies. And the odds are that the governments will get together and start using SDRs before any hyperinflation can occur in the US. Besides, the US is not the only country living well beyond its means. Japan is first on the list and the US is years behind Japan.

Japan will likely hit hyperinflation this year, not the US. Then we shall see how governments react to the realization that a major world power can go kaput.

 

[Clawhammer]

You are looking at in the wrong context. It is not the US vs. the world. Most of the rest of the world governments like the status quo and would assist the US. So, most of the foreign governments will buy USDs to stabalize their own currencies. And the odds are that the governments will get together and start using SDRs before any hyperinflation can occur in the US. Besides, the US is not the only country living well beyond its means. Japan is first on the list and the US is years behind Japan.

Japan will likely hit hyperinflation this year, not the US. Then we shall see how governments react to the realization that a major world power can go kaput.

Yeah, fair call. As much as we read about the US's allies cutting her loose, I perceive we still exist in an East vs West environment. Despite all the support we hear from western politicians for an emergent China, I'm pretty sure the old western 'power block' will unite to stabilise the 'old guard' against the great unknown of China... and an unfortunately predictable Russia.

 

[TheEnd]

What I DO NOT understand is how are The Fed/USG going to create jobs for 40 MILLION people on food stamps?

It just cannot be done with the massive declines in manufacturing and offshoring going to cheaper countries???

 

[dccpa]

What I DO NOT understand is how are The Fed/USG going to create jobs for 40 MILLION people on food stamps?

It just cannot be done with the massive declines in manufacturing and offshoring going to cheaper countries???

Fracking has changed the equation. Our natural gas is so cheap, it is offsetting the cheaper Asian labor. Add in the much lower transportation costs and reduced inventory through having supply closer at hand and companies are relocating manufacturing back to the US.

 

[JulieW]

Very interesting thanks DCCPA

 

[dccpa]

Very interesting thanks DCCPA

Julie our natty is a little over $4/mcf. My understanding is that the price in Asia is $16/mcf. The price difference is due to our glut of natty from fracking. Europe and other areas are looking at doing the same thing. Fracking is a game changer for a few decades. After that, we will be dead, so who cares.