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Inflation Will Destroy the Dollar

Porter Stansberry is a noted financial advisor with a very good track record and a substantial worldwide following. The final part of this video is a pitch to subscribe to his advisory service, but the first part comprises an excellent analysis of the current situation and what I think is the most plausible prognosis. His argument is well developed and based on solid facts. I urge you to watch it: If you close the browser window or tab while it is playing, you’ll have the option to go to the written transcript. In either case, pay close attention to the startling charts that make a strong case that hyper-inflation is looming on the horizon. Some writers have been arguing that deflation, rather than inflation, is the more likely prospect, but that case us built upon a misapplication of term “deflation” and an incomplete consideration of the pertinent factors. In reality, it is not an either-or situation. Strictly speaking, both inflation and deflation are monetary phenomena. As I’ve said before, when speaking about inflation, one must distinguish between currency inflation and price inflation. Price inflation or the cost of living can be affected by a number of causes, but the usual and primary cause is currency inflation, that is the debasement of a currency by the monetary authorities by creating money on an unsound basis, notably, the monetization of government debt. Deflation is the opposite of inflation; it is the contraction of the overall money supply by the banking system. That’s not what we’ve been seeing. The overall money supply has been increasing—inflation. However, the money has not been going to the private productive sector but to the public sector (government) to use for bank bailouts, weapons and wars, expansion of the national security state, and extension of imperial dominance around the world, all of which are wasteful and useless. The bad debts that were created during the latest (real estate) bubble have not been written off, they have for the most part simply been taken over by the government. People who serve within those realms benefit from the inflation, they have plenty of money to spend, but the productive sector is being starved for money and credit. Businesses often depend upon bank financing for working capital. When banks are unwilling to provide it, they are bankrupted and workers lose their jobs. Hence we have both currency inflation and depression at the same time. It’s as if there were a huge counterfeiting ring using bogus money to gobble up a large proportion of the available goods and services from the market. Counterfeiters only take; they do not put anything of value into the market. Hence, as real value is drained from the economy, sellers raise prices in order to compensate for the increased supply of money. Meanwhile, those who find themselves among the army of the unemployed are willing to take less pay for whatever work they can find in order to acquire basic necessities of life. As the government and monetary authorities continue with their wrong-headed “stimulus” measures, they simply make matters worse, assuring the eventual destruction of the dollar as a reliable measure of value and US government bonds as a safe store of value. None of the proposals now on the table in Congress or the financial press will solve the dilemma. As I argued in my recent article, The World’s Ominous Reckoning, that appeared in Reality Sandwich, The problem is structural and systemic. The system is designed to create debt, and ever more of it. Like a pernicious cancer, debt is a parasite that is killing us, and in the end a parasite will die along with its host…. interest must be eliminated from the money system to put an end to the growth imperative. [For more evidence of inflation and its effects in today’s economy, see also my previous blog post about inflation, Chris Martenson: Inflation Is So Much Worse Than We’re Told]. Read the original article on Beyond Money.
endofmoney Thomas Greco is the author of The End of Money and the Future of Civilization.

The Emergence of Self-Organizing Systems of Exchange

Joseph Jaworski is the author of Synchronicity: The Inner Path of Leadership. In a message today from the publisher announcing the second edition of the book, I noted the reference to Jaworski’s “Four Principles to Access the Source of Innovation.” Although I’ve not yet read the book, I did take a look at the blog […] Read More..

Coping, Caring, and Building Community

As the financial and economic ground continues to shift beneath our feet, it becomes ever more imperative that we reduce our dependence upon the institutions and structures that we have come to depend upon and take for granted. The financial tsunami of 2008 and the continuing aftershocks should be a wakeup call. The sock markets […] Read More..

The Great Unraveling—Entering Stage Two

There has been very little recognition of the Debt/Growth Imperative that is built into our global system of money, banking, and finance. As I have been preaching for many years, the creation of money as interest-bearing debt requires that indebtedness, in either the private sector or the public sector, must be continually increased at an […] Read More..

Money and Oil: The agenda in Libya becomes more evident

I hadn’t noticed it before, but on March 22, Bloomberg reported that, Libyan Rebel Council Forms Oil Company to Replace Qaddafi’s.Well, we’ve grown to expect things like that. The more interesting development reported in the article was this:The Council also said it “designated the Central Bank of Benghazi as a monetary authority competent in monetary […] Read More..

Stop Chasing the Buck and Change Your Luck

Cashless trading based on credit clearing is moving into its next stage of development, the optimization and scale-up stage. Established groups and associations are beginning to recognize the importance and urgency of disengaging from conventional structures of money and banking, reclaiming “the credit commons,” and reorganizing the exchange of value under local community control. One […] Read More..