Tuesday , 5 March 2024

Inflation or Deflation: Are We Approaching the Tipping Point? (+2K Views)

IDW-2014-06-27Might our IDW be suggesting a breakout in asset price inflation is about to take place? Could it in fact be presaging the start of John William’s hyperinflationary depression in which prices rise exponentially even in light of massive unemployment and bankruptcies?USDOne point worth noting is that commodities…have been showing price strength of late. Copper has suddenly shown new life, especially over the last couple of weeks. It closed at $3.16 this week and is up 7.6% since its March low. Oil is up by 6.8% since its March lows and the Rogers Fund is up 9.2% since its January lows.

Prospects for Future Inflation

If we are on the precipice of a serious inflation problem, we should start to see:

  • a major decline in the dollar index and
  • materials prices start to take off.
Prospects for Future Hyperinflation
For the kind of hyperinflation that John Williams is steadfastly predicting, we will need to see a collapsing dollar. Looking at the moving averages above, the dollar Index closed at 80.07 this week. That’s below the 50-day moving average of 80.61 but decidedly above the 200-day average of 79.61. Obviously the really big target would be the lows in 2011, when gold made its highs. The dollar fell below 74 then. If we are to see a collapse in the dollar of that magnitude, we might start to worry but for now the prospects of that happening appear fairly slim.
Percentage of Foreign Global USD Holdings
The percentage of Global U.S. dollar liquidity that is held by foreign central banks has been in a steep decline since 2008-09. (As the Fed is printing more and more dollars, foreigners are saying, “No thanks! We don’t want more of your fraudulent currency.”) It is a trend that could catch hold with lightening speed and that would likely send global markets reeling but for that to take place, monetary velocity will have to speed up and so far there are no signs of that happening as America’s dwindling middle class who is, out of necessity, holding on to every dollar they get to buy the absolute necessities of life. Thanks a lot, Alan Greenspan! Thanks a lot, Ben Bernanke for your policies of bankrupting America and its middle class!
[In answer to Taylor’s question Are We Approaching An Inflation Tipping Point? the answer is “not yet.”

Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.

*http://jaytaylormedia.com/are-we-approaching-an-inflation-tipping-point/ (2014 Copyright © Jay Taylor Media )

Related Articles:

1. Fed & Yellen So Far Behind Inflation Curve Chance of Hyperinflation Is Now 35%! Here’s Why

Janet Yellen and the Federal Reserve are so behind the inflation curve, and many other market implication curves, that we probably are staring at a 35% chance of a Hyper-Inflationary period by the time the Federal Reserve realizes that “noise” is actually real inflation! Read More »

2. Probability of Deflation Is 60%, Inflation Is 25% and Muddling Through Is 15% – Here’s Why

At the end of last year virtually every every single economist expected interest rates to rise this year as the Fed tapered their purchases and the economy improved but, in fact, interest rates on the 10 year U.S. Treasury have been going down year to date (from 3% to 2.5% after rising from about 1.6% to 3% last year). The masses, going along with this crowd, got fooled but we have been calling for a decline in interest rates for some time now due to world-wide deflation and it couldn’t be clearer to us that this is the most likely scenario for the United States. Let us explain. Read More »

3. there is no inflation, There is No Inflation, THERE IS NO INFLATION! Yeah, Sure!

Don’t listen to what the official numbers say. Inflation is a big problem already for the U.S. economy – and in an inflationary environment, gold bullion goes up and stock prices go down, because materials cost more and consumers spend less. I’d adjust my portfolio accordingly for the rapid inflation that awaits us. Read More »

4. Inflation: What You Need to Know

Hyperinflation is not an unusual phenomenon. 32 countries have experienced hyperinflation over the last 100 years of which no less than 21 have experienced it in the past 25 years and 3 in the past 10 years. The United States is one of the few countries to have experienced two currency collapses during its history (1812-1814 and 1861-1865). Could it happen again? Words: 1450 Read More »