Preparing us for Hyperinflation

luvpump

http://www.youtube.com/watch?v=xbUIlH0stSc&list=FLyDshH97vxQAFJP_WQ3oV-Q&index=3&feature=plpp_video

Interesting video, a few quotes from our old friends peter schiff, Jim Rogers & others, who sucessfully foresaw the crisis in 2008, the world seems to be printing sooo much money, i can see in 2 or 3 years inflation going through the roof, with the huge increase in money supply, all this extra money is surely going to cause inflation... ? Any thoughts ? or is this just over-reaction ?

StevieJ

You mean this Schiff

12 Ways Schiff Was Wrong in 2008

• Wrong about hyperinflation
• Wrong about the dollar
• Wrong about commodities except for gold
• Wrong about foreign currencies except for the Yen
• Wrong about foreign equities
• Wrong in timing
• Wrong in risk management
• Wrong in buy and hold thesis
• Wrong on decoupling
• Wrong on China
• Wrong on US treasuries
• Wrong on interest rates, both foreign and domestic

http://money.usnews.com/money/blogs/the-ticker/2009/01/26/peter-schiff-right-on-the-crisis-wrong-on-investing

chewmylegoff

I do like the way that history has been rewritten to record the accurate prediction of the financial crisis by various internet prophets who make their money from selling tat to gullible people on the basis that they've been right before (when they haven't) so they'll be right again.

I'd rather chuck a dart at the FT.

IronWolf

As we've been discussing in another thread, the money supply in the economy is mainly controlled by the banks, rather than the central bank. All the central bank does is control interest rates.

Truth is noone really knows if we'll get hyperinflation, the central banks injection of money has staved off deflation due to the private banks not lending as much. Hyperinflation wont become an issue really until the economy is recovering, and then the central bank will increase interest rates by selling its government bond.

IronWolf

Oh and I forgot to say, that there are so many factors over and above money supply that affect inflation now. You have fuel prices, food prices and raw materials, all of which are traded globally and sensitive to economic cycles and that monetary policy can do very little about.

Generali

luvpump wrote: »

http://www.youtube.com/watch?v=xbUIlH0stSc&list=FLyDshH97vxQAFJP_WQ3oV-Q&index=3&feature=plpp_video

Interesting video, a few quotes from our old friends peter schiff, Jim Rogers & others, who sucessfully foresaw the crisis in 2008, the world seems to be printing sooo much money, i can see in 2 or 3 years inflation going through the roof, with the huge increase in money supply, all this extra money is surely going to cause inflation... ? Any thoughts ? or is this just over-reaction ?

The flaw in their argument is that money supply is falling not rising.

As of Feb 2012, M4 (the broadest measure of the money supply) was down 3.4% over the prior year. (LINK)

Over the same period, M3 (the broadest EU measure of the money supply) was up just 0.8%.

The Fed don't publish any meaningful measure of money supply any more, they just rely on M2 which basically covers cash, money in banks and savings accounts.

luvpump

StevieJ wrote: »

You mean this Schiff



http://money.usnews.com/money/blogs/the-ticker/2009/01/26/peter-schiff-right-on-the-crisis-wrong-on-investing

I guess schiff has been wrong a number of points, but look at 6.13 on the video, Bernake on u.s house prices etc befor the bubble burst, schiff ofcourse was famously & (pretty much on his own) and a 100% right on the real estate bubble ..

sabretoothtigger

StevieJ wrote: »

You mean this Schiff

[strike]Wrong about hyperinflation
Wrong about the dollar
Wrong about commodities except for gold
Wrong about foreign currencies except for the Yen
Wrong about foreign equities

Wrong in risk management
Wrong in buy and hold thesis
Wrong on decoupling
Wrong on China
Wrong on US treasuries
Wrong on interest rates, both foreign and domestic[/strike]
Wrong in timing

Schiff Was Wrong in 2008

http://money.usnews.com/money/blogs/the-ticker/2009/01/26/peter-schiff-right-on-the-crisis-wrong-on-investing

Thats the one :rotfl:

The flaw in their argument is that money supply is falling not rising.

I imagine the key is linked to bond prices and their ability to pay above inflation returns. Does their price falling somehow expand money supply, with so many interrelated factors my guess is its something along those lines.
Surely a fall in bond prices isnt deflation


At present cash/bonds are king http://www.bloomberg.com/news/2012-04-30/bonds-prove-only-winners-for-first-time-since-2008.html

Timm

luvpump wrote: »

http://www.youtube.com/watch?v=xbUIlH0stSc&list=FLyDshH97vxQAFJP_WQ3oV-Q&index=3&feature=plpp_video

Interesting video, a few quotes from our old friends peter schiff, Jim Rogers & others, who sucessfully foresaw the crisis in 2008, the world seems to be printing sooo much money, i can see in 2 or 3 years inflation going through the roof, with the huge increase in money supply, all this extra money is surely going to cause inflation... ? Any thoughts ? or is this just over-reaction ?

They are not printing new money:
They are monetising sovereign debt.


One can argue about what the result will be, but confusing the creation of new £20 notes with a balancesheet bailout of the state and the holders of its bad debt, is to build the foundation of one's understanding and subsequent argument on flawed foundations.

IveSeenTheLight

luvpump wrote: »

i can see in 2 or 3 years inflation going through the roof, with the huge increase in money supply, all this extra money is surely going to cause inflation... ? Any thoughts ? or is this just over-reaction ?

Surely if Hyperinflation is on the way, you want to be assett rich and cash poor.

purch

to build the foundation of one's understanding and subsequent argument on flawed foundations

It hasn't stopped them before, and it won't stop them in future.

The whole basis of the sensationalist arguments being peddled to the gullible is that there are billions of brand spanking new £/$/EUR being created and flooding into the system to be spent by the public.

Schiff and his fellow blogsmiths should know better, so they are either stupid or more likely deliberately misrepresenting events for their own gain.