Tags: John | Williams | Hyperinflation | Done | Deal

John Williams: Hyperinflation a Done Deal

Monday, 13 Dec 2010 08:12 AM

John Williams, the economist who runs the web site ShadowStats.com, says that Fed Chief Ben Bernanke is driving the country to sure hyperinflation, possibly beginning in the next six to nine months, and that any tax policy change or deficit-reduction plan taken now is already too late to reverse the trend.

He recommends that investors buy precious metals like gold and silver, non-dollar currencies such as the Canadian dollar, Australian dollar, and Swiss franc, and most surprisingly, to stock up on canned goods and other items to barter once the dollar finally collapses and inflation roars.

“Eventually, it’s going to be a hyperinflationary Great Depression in the United States,” Williams told Canada’s Business News Network.

“If you look at the government’s accounting on a generally accepted accounting principle basis, what you see the annual deficit is running $4 to $5 trillion a year,” Williams says.

“A $5 trillion deficit can’t be covered by taxes. The government could take 100 percent everyone’s income and corporate profits and still be in deficit,” Williams warns.

“They could also cut every penny of government spending except for Medicare and Social Security and still be a deficit.”

The failure of the Obama Deficit Commission to get a plan before Congress, coupled with the reluctance in Washington to even discuss spending reform, means there is no room left for the dollar to recover.

Once you see panic dollar selling set in, that will be the end, Williams says.

Expect the latest round of quantitative easing to hit the dollar harder and harder, destroying its remaining value, Williams says.

You can already see the effects of the latest round of easing in commodity prices, he says, up 20 percent to 30 percent year to year.

That’s largely because of the weakening dollar, Williams contends.

“Over time, unable to raises the taxes, most governments, they don’t default on the debt, what they do is they rev up the printing presses and create the money to pay off the obligations,” he warns.

“That would have doomed us to hyperinflation by the end of this decade, but then the crisis of the last couple of years has brought the problem much closer,” Williams says.

Former Federal Reserve Chairman Paul Volcker, an Obama adviser who fought double-digit inflation during the Reagan era, said the Fed will eventually need to roll back monetary stimulus.

“The Federal Reserve will have to act in a timely way to head off inflationary consequences,” Volcker said during a panel discussion in Washington this week, reported Bloomberg News.

“I think they understand the problem.”

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John Williams, the economist who runs the web site ShadowStats.com, says that Fed Chief Ben Bernanke is driving the country to sure hyperinflation, possibly beginning in the next six to nine months, and that any tax policy change or deficit-reduction plan taken now is...
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2010-12-13
Monday, 13 Dec 2010 08:12 AM
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