Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Gold Amid Epidemiological and Economical Update - 15th Jul 20
Is it Time To Dump Gold Stocks? - 15th Jul 20
Retail Stock Market Traders & Investors Squeezed to Buy High-Risk Assets Again - 15th Jul 20
SPX about to Challenge 8/08 High - 15th Jul 20
How to Grow Huge Fruiting Magical Indoor Grape Vines at Home UK - 15th Jul 20
Stock Market Dow 30k before End of 2020? - 13th Jul 20
Credit Market Investments Turned Into End-User Risk Again - 13th Jul 20
Investors Are Going All-In on This Coronavirus Proof Industry - 13th Jul 20
5 Vital Insights That You Can Gain From Instagram Trackers - 13th Jul 20
Stop Believing The 'Economy' Is The Same As The Stock Market - 12th Jul 20
Spotify Recealed as The “Next Netflix” - 12th Jul 20
Getting Ahead of the Game: What Determines the Prices of Oil? - 12th Jul 20
The Big Short 2020 – World Pushes Credit/Investments Into Risk Again - 11th Jul 20
The Bearish Combination of Soaring Silver and Lagging GDX Miners - 11th Jul 20
Stock Market: "Relevant Waves Vs. Irrelevant News" - 10th Jul 20
Prepare for the global impact of US COVID-19 resurgence - 10th Jul 20
Golds quick price move increases the odds of a correction - 10th Jul 20
Declaring Your Independence from Currency Debasement - 10th Jul 20
Tech Stocks Trending Towards the Quantum AI EXPLOSION! - 9th Jul 20
Gold and Silver Seasonal Trend Analysis - 9th Jul 20
Facebook and IBM Tech Stocks for Machine Learning Mega-Trend Investing 2020 - 9th Jul 20
LandRover Discovery Sport Service Blues, How Long Before Oil Change is Actually Due? - 9th Jul 20
Following the Gold Stock Leaders as the Fed Prints - 9th Jul 20
Gold RESET Breakout on 10 Reasons - 9th Jul 20
Fintech facilitating huge growth in online gambling - 9th Jul 20
Online Creative Software Development Service Conceptual Approach - 9th Jul 20
Coronavirus Pandemic UK and US Second Waves, and the Influenza Doomsday Scenario - 8th Jul 20
States “On the Cusp of Losing Control” and the Impact on the Economy - 8th Jul 20
Gold During Covid-19 Pandemic and Beyond - 8th Jul 20
UK Holidays 2020 - Driving on Cornwall's Narrow Roads to Bude Caravan Holiday Resort - 8th Jul 20
Five Reasons Covid Will Change SEO - 8th Jul 20
What Makes Internet Packages Different? - 8th Jul 20
Saudi Arabia Eyes Total Dominance In Oil And Gas Markets - 7th Jul 20
These Are the Times That Call for Gold - 7th Jul 20
A Reason to be "Extra-Attentive" to Stock Market Sentiment Measures - 7th Jul 20
The Beatings Will Continue Until the Economy Improves - 6th Jul 20
The Corona Economic Depression Is Here - 6th Jul 20
Stock Market Short-term Peaking - 6th Jul 20
Gold’s Major Reversal to Create the “Handle” - 5th July 20
Gold Market Manipulation And The Federal Reserve - 5th July 20
Overclockers UK Custom Build PC Review - 1. Ordering / Stock Issues - 5th July 20
How to Bond With Your Budgie / Parakeet With Morning Song and Dance - 5th July 20
Silver Price Trend Forecast Summer 2020 - 3rd Jul 20
Silver Market Is at a Critical Juncture - 3rd Jul 20
Gold Stocks Breakout Not Confirmed Yet - 3rd Jul 20
Coronavirus Strikes Back. But Force Is Strong With Gold - 3rd Jul 20
Stock Market Russell 2000 Gaps Present Real Targets - 3rd Jul 20
Johnson & Johnson (JNJ) Big Pharma Stock for Machine Learning Life Extension Investing - 2nd Jul 20
All Eyes on Markets to Get a Refreshed Outlook - 2nd Jul 20
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Socialist “Green New Deal” Points the Way to Hyperinflation

Politics / Government Intervention Feb 12, 2019 - 04:11 PM GMT

By: MoneyMetals

Politics

Socialist Venezuela’s economic collapse and hyperinflationary spiral serves as a warning for American investors. It’s what can happen when a government spends perpetually beyond its means and refuses to face reality.

Despite a U.S. economy that appears relatively strong and stable on the surface, its foundation is beginning to crack under the pressure of a $22 trillion (and growing) debt load.

Both Republicans and Democrats are to blame for that. But rising pro-socialist sentiment within the Democrat Party could turn our current debt danger into a clear and present disaster.


We are potentially just one election away from heading down a road to economic ruin – one that could bring about a Third World-style hyperinflation in the United States.

In his State of the Union Address last week, President Donald Trump specifically warned Americans of the dangers of socialism. He noted that it is gaining traction within some quarters of American politics.

He concluded, “Tonight, we renew our resolve that America will never be a socialist country.”

Tellingly, many Democrats refused to applaud in approval.

Bernie Sanders, who nearly won the Democrat presidential nomination in 2016 as an avowed socialist, scowled. His Senate colleague, Massachusetts ultra-liberal Ed Markey, sat stone faced with arms folded. Meanwhile, rising far-left star Alexandria Ocasio-Cortez tuned out Trump and plotted her next publicity stunt.

Cortez, Sanders, Markey, and 2020 presidential hopefuls including Cory Booker are pushing what they call a “Green New Deal.”

This radical proposal would be the biggest expansion of government size and power in history.
 Green New Deal
It would impose draconian, economically crippling restrictions on industry and transportation while authorizing trillions of dollars in new spending on everything from windmill farms, to universal college, to universal healthcare, to reparations for historically aggrieved groups, to “economic security” handouts to people who are “unable or unwilling to work.”

“The Green New Deal Would Spend the U.S. Into Oblivion,” blared a Bloomberg headline.

The article warned of “unrealistic and ruinously expensive economic proposals” contained in the Green New Deal. It would “take every big spending idea that has emerged on the political left in recent years and combine them into one large package deal, with little notion of how to pay for them all.”

The Green New Deal would plunge the United States into full-fledged socialism. If a champion of it like Cory Booker somehow wins the White House in 2020 and Republicans lose the Senate, there may be no stopping America’s march toward economic oblivion.

This political “black swan” scenario is just one among other potential triggers of hyperinflation. A world war or a systemic failure of the Fed-backed fractional reserve banking system are other potential triggering events.

A currency crisis of some magnitude (which may or may not reach the level of hyperinflation) appears to be inevitable even under favorable assumptions about our political and economic future.

The Congressional Budget Office (CBO), in its recent report “The Budget and Economic Outlook: 2019 to 2029,” projects an unprecedented surge in the size of the national debt relative to the economy.

Publicly Held U.S. Government Debt (Percentage of GDP)

ublicaly Held U.S. Gov't Debt

Source: Congressional Budget Office

This is just the CBO’s baseline forecast. Under more pessimistic assumptions (higher spending levels, lower tax revenues, and/or higher interest rates), the debt to GDP ratio could rise even more steeply.

And if a black swan event were to hit on the scale of a world war, the debt could hyperinflate – requiring a hyperinflation of the currency to service it.

As the CBO acknowledges in its report, “High and rising federal debt would reduce national saving and income, boost the government’s interest payments, limit lawmakers’ ability to respond to unforeseen events, and increase the likelihood of a fiscal crisis.”

All previous surges in debt, triggered by wars or economic crises, were unexpected and temporary in nature. The debt surge we now are in the midst of is chronic in nature – the result of decades of fiscally irresponsible policies.

It could have been avoided – and would have if politicians had been subject to the constraints of a sound money standard (gold and silver) all these years.

“Gold stands in the way [of]... unlimited spending... government... power.” 

    –Larry Parks 

As Larry Parks of the Foundation of the Advancement of Monetary Education said in a recent Money Metals podcast interview, “With paper money there is no limit to how much money you can spend.

And if you have unlimited spending you get unlimited government. And if you have unlimited government the people in charge have unlimited power. They like that. Gold stands in the way.”
Gold is an essential asset for investors to own as protection against a currency debasement and possible hyperinflation. Silver, though, may be more the practical precious metal to have on hand if a wrecked economy degenerates into black market and barter transactions.

In hyperinflationary Venezuela, locals treat the official currency, the bolivar, like toilet paper. As it depreciates by the hour, they eagerly swap bolivars out for more stable foreign currencies or alternative underground currencies including gold, silver, and cryptocurrencies.

Surviving hyperinflation requires flexibility and adaptability. It will impoverish those who rely on conventional sources of income and savings.

You won’t necessarily get rich by owning precious metals, even as their prices shoot up in nominal terms. But you will preserve your purchasing power over time, regardless of how many trillions or quadrillions the government adds to the national debt.

Stefan Gleason is President of Money Metals Exchange, the national precious metals company named 2015 "Dealer of the Year" in the United States by an independent global ratings group. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.

© 2019 Stefan Gleason - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules