Tuesday, July 15, 2008

Hyperstagflation on the Way

Bob Chapman continues to provide comprehensive analysis of our financial decline. His latest The International Forecaster lays out the formula for "hyperstagflation." Read it carefully for the macro-analysis. Then take steps to prepare.

Get out of stocks (except quality metals and commodities), bonds and into precious metals and their stocks. Take delivery of actual metals and shares. Stay away from ETFs (see Chapman's article for a summary of our they're used to suppress the metals prices). Keep cash in small bills at home. Buy at least a 2-3 month supply of food. Even more is better. Don't put it off. Procrastination literally kills.

As Chapman warns, "Detach yourself from the Matrix, or get reamed."
True story. Last weekend I bumped into a banker friend. Here's a short version of our quick conversation:

PD: "The worldwide financial system seems to be broken. Everyone but Americans seem to know it."

Banker: "Yep. It's de ja vu all over again."

PD: "But we've never seen this before, have we?"

Banker: "That's right."

PD: "Calling our financial crisis a 'sub-prime crisis' just names the tip of the iceberg."

Banker: "No one knows how deep it goes."
Meanwhile, the stock market plunged over 200 points today until the Plunge Protection Team (PPT) went to work. Gold jumped $15 before the PPT went to work. It is still up $6.00.

Doug Casey provides an
interesting graph showing how hyperinflation wiped out the Yugoslavian currency in the early 1990's. At its height in 1993, retail prices were inflating at a rate of 2% per hour. Today, inflation is surging through the global economy as never before.
Does anyone besides Big Agriculture and their lobbyists think ethanol is still a good idea? A confidential
secret report by the World Bank indicates that 75% of the recent rise in global food prices is due to the mandates use of biofuels to combat global warming. Many think a 10% ethanol blend reduces gas mileage by 8-10%. It is subsidized and additional energy is needed to process it. 2-stroke engines are having lots of problems with it. Why is there no outcry to stop this little bit of madness?
Patrick Buchanan
points out that all our saber-rattling against Iran drove oil prices up another $11 a barrel, translating "into $143 million more sucked out of the U.S. economy every day – into the coffers of Canada, Mexico, Venezuela, Saudi Arabia, and OPEC." Peter Casey says that the IAEA reports do NOT point to Iran being close to developing a rudimentary nuke, nor that they are even trying.

After watching what happend to North Korea (with nukes) and Iraq (without them), who could blame them if they wanted them, too? And yet Congress continues the march to war being led by the nose by AIPAC. Are we insane? If we don't like the results of the Iraq war, we'll hate the one with Iran.

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