Tuesday, August 24, 2010

Hyperinflationary Great Depression

A "hyperinflationary great depression", that is what John Williams sees coming:
"... The government is effectively bankrupt. Using GAAP accounting principles, the annual deficit is running in the range of $4 trillion to $5 trillion. That's beyond containment. The government can't cover it with taxes. They'd still be in deficit if they took 100% of personal income and corporate profits. They'd also still be in deficit if they cut every penny of government spending except for Social Security and Medicare. Washington lacks the will to slash its social programs severely, to change its approach to ever bigger government. The only option left going forward is for the government eventually to print the money for the obligations it cannot otherwise cover, which sets up a hyperinflation..."
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Comment: No doubt, something big is coming. The situation is very bad because there is so little one can do to avoid the catastrophe. It is impossible to maintain financial health at an individual level when the whole monetary system is unsound.

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