A very interesting question is raised by Giordano Bruno:
The issue is, how do you convince the general public that all is well until you are ready to unleash hyperinflation and fiscal Armageddon? How do you make them believe with all their hearts that they are not in the midst of a debt meltdown and the end of their financial sovereignty, but basking in a full-on economic recovery?!
Is that what is happening? Sure seems that way.
Mr. Bruno provides his answers to these questions. If his were an academic exercise, the answers might be interesting. Instead they are frightening.
Jim Willie provides his own answers:
The next chapter should see a default in USGovt debt, as it spirals out of control, supported mainly by the monetization engines, the stuff of hyper-inflation. Meanwhile, back at the inflation farm, a widening array of economic mythology has sprung up, replete with nonsense and deep deceptions like shallow walls to defend the monetary press. The new myths extend from the standard Second Half Recovery dupe, the Jobless Recovery insult, the Green Shoots absurdity, and the Exit Strategy refrain that ushered in QE2. The inflation engineers must defend their craft, which has destroyed the USEconomy and rendered its banking system insolvent, as well as households.
Most of what you are being told and led to believe is patently false. The government is desperate to survive and will tell and do anything to extend their life. The disease is terminal but the charade they play is harmful. To pretend and extend, they worsen the ultimate rebuilding.
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Monty:
I have engineered my investment portfolio since two years ago, when the Obama administration announced their first deficit, towards protecting our wealth, nay profiting, from inflation. Yesterday, I put in an offer for a new car to take advantage of 36 month 0% financing–let’s get the goods before the price goes up, and borrowing at 0% seems like a no brainer in inflationary times (see http://righteousinvestor.com/2011/02/16/jeet-kune-do-investing-ii-toyota-rav4/ ). If hyperinflation were really not the case, as so many deflationistas, economists, and financial experts are claiming, then why am I doing so well? Because, frankly, I believed in the Bernanke put–that no matter how much deflation of credit took place, Bernanke promised to puff it back up. The money creation is already happened–alarming price increases are coming next. After that, panic. But by that time, it will be largely too late to prevent the robbery. Bernanke is not smart enough to control what is about to happen.
Thanks so much for your blog, and your consistently sane approach towards the economy and the government. It has helped me to maintain my investment momentum, and you’re more often right than wrong. If ever I go down your way, I have to take you out for lunch or dinner; I owe you big time.
P. W.,
Thanks for the kind words.
Monty