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Title: Airplane Money!
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URL Source: [None]
Published: Feb 6, 2016
Author: Brian Maher
Post Date: 2016-02-06 10:17:49 by BTP Holdings
Keywords: None
Views: 29
Comments: 3

We’ve reckoned much about helicopter money in these pages. But airplane money?

The Wall Street Journal reported the other day that proud and mighty Venezuela is in such an inflationary muss… it can’t even print enough cash to meet its own needs. So it had to fly in three dozen 747 cargo planes — all loaded to the gunwales with bank notes — from outside dealers.

More’s coming, too. Our friends at the Journal report Venezuela’s central bank plans to double the amount of airplane money in circulation. And it’s now only printing 50- and 100-bolivar bills because it costs more to produce 5s, 10s and 20s than they’re worth. If you think the Fed prints money, it’s a pimple to their Everest.

This loony bin’s annual inflation rate already clocks in around 720%. And it’s rising. Fast. The place is wrecked beyond help.

But it’s a tale of two inflation worlds right now...

Venezuela has hyperinflation. But deflation’s got the rest of us by the snout. The U.S., Japan, Europe — none of them are within miles of 2% inflation. The Bank of Japan just introduced negative interest rates to revive the corpse. Europe has them too. Rumors circulate they could be coming to America.

It’s weird. The central banks can inflate a multitrillion-dollar blimp of a stock market. But they can barely inflate a lung as far as consumer prices go. Also weird is that deflation can switch to inflation. And lickety-split, too...

The hyperinflation many warned the Fed’s QE programs would cause is a bogeyman: Everyone’s terrified, but no one’s seen it. It’s locked away in the dungeons of the banking system. But if all those trillions break their chains, look out.

Risk analyst Nassim Taleb warned about it in 2009 when he said, “We will go from deflation to hyperinflation without seeing inflation.”

Jim says it would start with garden-variety inflation the Fed’s going throttle full out to generate:

The last thing you probably think of is hyperinflation in a 21st-century developed economy such as the United States.

Yet it can happen here. In fact, the United States flirted with hyperinflation in the late 1970s… The U.S. dollar suffered 50% inflation in the five years 1977–1981. We were at the takeoff stage to hyperinflation, exactly where Germany was in 1920 on a relative basis. Hyperinflation in America was prevented then by the combined actions of Paul Volcker and Ronald Reagan, but it was a close call.

Jim says it would start with garden-variety inflation the Fed’s working night and day to generate. But once inflation expectations take root, the floodgates will open:

Today the Federal Reserve assumes if inflation moves up to 3% or more in the U.S., they can gently dial it back to their preferred 2% target. But moving inflation to 3% requires a huge change in the behavior and expectations of everyday Americans. That change is not easy to cause, but once it happens, it is not easy to reverse, either.

If inflation does hit 3%, it is more likely to go to 6% or higher, rather than back down to 2%, because the process will feed on itself and be difficult to stop.

And who knows where it would end. It would take another Paul Volcker to stop it. But as Jim adds in lamentation, “Sadly, there are no Volckers or Reagans on the horizon today.”

Jim’s also said the dollar is close to another peak and will “soon begin a new period of decline.” And as the economy weakens, “the Fed will be forced to back off the tough talk and rate hikes and start another easing cycle, probably by mid-2016.”

And here’s the sting in the tail: “That’s the catalyst for higher inflation.”

Will that inflation itself be the catalyst for the hyperinflation Jim warned about? More importantly, will there be enough 747s in the world to keep up with it if so?

Below, The Mogambo Guru tells you why must have a plan in place when the “Ultimate Keynesian Insanity Plan” that could lead to the hyperinflation just described unravels. We promise — it’s well worth your time.

Regards,

Brian Maher

Managing editor, The Daily Reckoning

P.S. We've got a plan to help you survive the next crisis...

http://click2.dailyreckoning.com...ZD0wQWw5Z1cmZz0w./AQ/vcZV

It shows you the four simple moves you can make immediately to potentially build an iron fortress around your nest egg before a financial crisis. Also how to protect yourself and your family with methods taught by the CIA.

And the best part is that it could change your life in countless ways even if there is no crisis. It shows you how to eliminate debt in record time, for example. And how to save up to $18,000 on your taxes this year, get around Obamacare… and a hundred other things.

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#1. To: All (#0) (Edited)

It costs more to make pennies and nickles than they are worth. I hear they have eliminated pennies in Canada. How do they balance the books? ;)

"When bad men combine, the good must associate; else they will fall, one by one." Edmund Burke

BTP Holdings  posted on  2016-02-06   10:32:58 ET  Reply   Trace   Private Reply  


#2. To: BTP Holdings (#1)

Canadians round off purchases. 92 cents becomes 90 cents. 97 cents becomes one dollar. I had a friend from France who came here after WW II. He showed me some French coins that were plastic. Reminded me of tiddly winks. Later, the French divided their money by 10 and called their money the New French franc so they could have metal coins. My uncle was a counterfeiter. Could you imagine money so worthless that you lose money of you counterfeit it? One ting to note is that prices are set by Money Supply and Velocity. When those planes full of money arrive, the people will react by spending it as soon as it gets in their hands. If the money is turned over twice a year, the Velocity is 2. If the people see tons of money, then they will spend is all in a month or turn it over 12 times a year which is to say inflation will go up 1,200% because velocity went from 2 to 12. Venezuela will go into Hyperinflation very soon. Their oil costs too much to produce. And their population went from less than 10 million in 1960 to 30.41 million today. They are doomed no matter who wins the next elections.

The Truth of 911 Shall Set You Free From The Lie

Horse  posted on  2016-02-06   12:27:18 ET  Reply   Trace   Private Reply  


#3. To: Horse (#2)

their population went from less than 10 million in 1960 to 30.41 million today.

Hispanics are very prolific, and their Christian faith is against them using any kind of birth control. This is the main reason their economy is in such sad shape. ;)

"When bad men combine, the good must associate; else they will fall, one by one." Edmund Burke

BTP Holdings  posted on  2016-02-06   12:38:35 ET  Reply   Trace   Private Reply  


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