Inflation is a Policy Decision

Inflation results from policies implemented by governments, commercial banks and central banks.

A Few Consequences

currencyGary Christenson – More currency placed into circulation devalues all currency units. We can thank fractional reserve banking, deficit spending and QE.

1- Stock markets rise as each currency unit buys less.

2- Commodities rise in price.

3- Incomes, taxes, debt and government expenditures rise.

4- Politicians spend more currency units as they reward friends and buy votes.

5- The wealthy become richer and the poor and middle class suffer as prices rise while wages stagnate. More stagflation is coming in 2018 – 2020.

6- Inflation discourages savings and encourages spending and debt creation.

Examine official national debt and M3 currency in circulation at ten year intervals on a log scale for a big-picture perspective. Continue reading

With A Bang Or A Whimper (How The Financial World Resets)

pricesGary Christenson – The global financial world is increasingly unstable and approaching a reset.  A few reasons why:

  • Global debt is approximately $200 Trillion and rapidly increasing. Debts are either paid or defaulted.  Default seems likely – either directly or via hyperinflation.
  • Global derivatives are, depending on who is counting, around $1,000 Trillion. Derivatives were at the center of the 2008 crash and are even more dangerous now.
  • Speculation, debt, and “printing currencies” have been excessive in many countries. Other similar periods of excessive speculation were 1929 and 2000.  “Printing currency” has never solved problems.

So how does the financial world, as we know it, reset?  Let’s speculate!

The Big Bang Scenario

  • Nuclear war creates a Mad Max scenario. The US and Russia have the means and opportunity.  I trust they do not have the motive.
  • Extended conventional war that starts small and expands, ends an empire, and destroys several countries and currencies.

Continue reading