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Chris Martenson

Don’t Be Fooled: Inflation Has The Upper Hand

Wednesday, December 8, 2010

Executive Summary

  • Money supply (M2) has been steadily growing for a decade, and banks hold an unprecedented amount of excess reserves that could enter the market at any time.
  • Credit growth is flatlining.
  • Debt in the household & financial sectors (the big enchilada) exhibits the deflationary trends that are pre-occupying the Fed.
  • Federal government credit is exploding upwards as a result.
  • Corporate and state debt are increasing, but at more moderate rates.
  • Energy costs are high and getting higher = inflationary.
  • Confidence in paper currencies is plummeting = potentially hyperinflationary.
  • Forecast for the future…

Part I

If you have not yet read Part I of this report, please click here to read it first.

Part II 

In Part I, we stepped through prices as useful indicators of whether we are in a period of inflation or deflation.  Because there’s no more important determination to make than to get an early read on whether we are facing a future of inflation or deflation, we are going to dive a bit more deeply into the evidence here to round out the story.

Let’s begin with….

Money

The classic definition of inflation or deflation is a “relative change in the amount of money compared to goods and services.”  Too much money and you have inflation; too little and you have deflation.

Don’t Be Fooled: Inflation Has The Upper Hand
PREVIEW

Don’t Be Fooled: Inflation Has The Upper Hand

Wednesday, December 8, 2010

Executive Summary

  • Money supply (M2) has been steadily growing for a decade, and banks hold an unprecedented amount of excess reserves that could enter the market at any time.
  • Credit growth is flatlining.
  • Debt in the household & financial sectors (the big enchilada) exhibits the deflationary trends that are pre-occupying the Fed.
  • Federal government credit is exploding upwards as a result.
  • Corporate and state debt are increasing, but at more moderate rates.
  • Energy costs are high and getting higher = inflationary.
  • Confidence in paper currencies is plummeting = potentially hyperinflationary.
  • Forecast for the future…

Part I

If you have not yet read Part I of this report, please click here to read it first.

Part II 

In Part I, we stepped through prices as useful indicators of whether we are in a period of inflation or deflation.  Because there’s no more important determination to make than to get an early read on whether we are facing a future of inflation or deflation, we are going to dive a bit more deeply into the evidence here to round out the story.

Let’s begin with….

Money

The classic definition of inflation or deflation is a “relative change in the amount of money compared to goods and services.”  Too much money and you have inflation; too little and you have deflation.

It’s Official: The Economy Is Set To Starve

Tuesday, November 23, 2010

Executive Summary

  • The age of conventional oil is over, but energy demand will continue to climb.
  • Natural gas is the “silver” of energy plays.
  • The inexorable onset of Peak Oil will drive natural gas much, much higher.
  • A tipping point of awareness approaches.
  • Prepare for extreme market volatility.

Part I

It’s the End of the Oil As We Know It…

Please click here to read Part I of this report.

Part II

Scouring the Globe for Fuel

Please click here to read Part II of this report.

Part III

Okay, so we’ve come to the conclusion that by the time the IEA, which has every incentive to underplay the timing and impact of Peak Oil, has publicly done everything but hand the world an engraved invitation on a silver platter that reads You are cordially invited to accept the reality of Peak Oil, it’s already past time to begin making whatever adjustments you are going to make.

Remember, it is my view that when the changes finally arrive in full force, their speed will overtake most people’s, countries’, and companies’ ability to react gracefully. (Click here for a recent report on this subject). Which means that the time to begin these efforts, if you have not already started, is now.

But we’ve gone over this in quite a bit of detail recently, and so I will not rehash those thoughts here and now. This report begins with the assumption that you have taken care of the basics: food, water, energy, and shelter. Further, you have gold and silver. You’ve got enough spare goods, parts, and necessities to take care of yourself, your family, and a few others besides. You’ve safely removed a comfortable portion of your wealth from the paper-based banking and financial systems. You are diligently working on building your local community.

Okay, so you’ve done all of that.  Now what?

It’s Official: The Economy Is Set To Starve
PREVIEW

It’s Official: The Economy Is Set To Starve

Tuesday, November 23, 2010

Executive Summary

  • The age of conventional oil is over, but energy demand will continue to climb.
  • Natural gas is the “silver” of energy plays.
  • The inexorable onset of Peak Oil will drive natural gas much, much higher.
  • A tipping point of awareness approaches.
  • Prepare for extreme market volatility.

Part I

It’s the End of the Oil As We Know It…

Please click here to read Part I of this report.

Part II

Scouring the Globe for Fuel

Please click here to read Part II of this report.

Part III

Okay, so we’ve come to the conclusion that by the time the IEA, which has every incentive to underplay the timing and impact of Peak Oil, has publicly done everything but hand the world an engraved invitation on a silver platter that reads You are cordially invited to accept the reality of Peak Oil, it’s already past time to begin making whatever adjustments you are going to make.

Remember, it is my view that when the changes finally arrive in full force, their speed will overtake most people’s, countries’, and companies’ ability to react gracefully. (Click here for a recent report on this subject). Which means that the time to begin these efforts, if you have not already started, is now.

But we’ve gone over this in quite a bit of detail recently, and so I will not rehash those thoughts here and now. This report begins with the assumption that you have taken care of the basics: food, water, energy, and shelter. Further, you have gold and silver. You’ve got enough spare goods, parts, and necessities to take care of yourself, your family, and a few others besides. You’ve safely removed a comfortable portion of your wealth from the paper-based banking and financial systems. You are diligently working on building your local community.

Okay, so you’ve done all of that.  Now what?

Thursday, November 11, 2010

Executive Summary

  • The US is one failed auction away from economic meltdown.
  • OECD countries are not aligned on what battle they’re fighting.
  • ‘Emergency’ measures governments are now taking will become permanent.
  • Currency devaluation & higher prices are inevitable.
  • Time to prepare is running out. Use the time you have wisely.
  • Chris gives specifics of his personal preparations for use as a guide.

Part I

If you have not yet read Part I of this report, please click here to read it first.

Part II

To quickly review Part I, the US has embarked on a very dangerous strategy of trying to print its way to prosperity, and various countries have, in exceptionally strong terms, indicated severe displeasure with the move. Essentially, they’ve determined that the US is trying to export its difficulties to them, and this is not appreciated.

So what do we make of this, and what might happen next?

I’ll be honest with you here: I have been redoubling my efforts at personal preparation over the past few weeks (and they were already on set to “high” over the past six months). I now see a very high possibility that a fiscal and/or associated dollar crisis could happen in the next 12 months. How high? Right now it looks like 50/50 to me; it’s a coin flip (or Russian roulette with three in the cylinder, if you prefer).

All that would be required to set match to dry tinder would be a single failed Treasury auction. You may consider this unlikely due to the presence of the Fed backstopping all new government borrowing, and that’s certainly a valid consideration, but the wildcard here is that the Fed is merely backstopping all the new Treasury issuances. As I indicated in part one, above, while the US might be floating roughly $1.2 – $1.5 trillion in new Treasuries in 2011, there’s another $3 trillion or so of ‘rollovers’ that have to go off without a hitch as well.

Alert: QE II Has Lit The Fuse
PREVIEW
Thursday, November 11, 2010

Executive Summary

  • The US is one failed auction away from economic meltdown.
  • OECD countries are not aligned on what battle they’re fighting.
  • ‘Emergency’ measures governments are now taking will become permanent.
  • Currency devaluation & higher prices are inevitable.
  • Time to prepare is running out. Use the time you have wisely.
  • Chris gives specifics of his personal preparations for use as a guide.

Part I

If you have not yet read Part I of this report, please click here to read it first.

Part II

To quickly review Part I, the US has embarked on a very dangerous strategy of trying to print its way to prosperity, and various countries have, in exceptionally strong terms, indicated severe displeasure with the move. Essentially, they’ve determined that the US is trying to export its difficulties to them, and this is not appreciated.

So what do we make of this, and what might happen next?

I’ll be honest with you here: I have been redoubling my efforts at personal preparation over the past few weeks (and they were already on set to “high” over the past six months). I now see a very high possibility that a fiscal and/or associated dollar crisis could happen in the next 12 months. How high? Right now it looks like 50/50 to me; it’s a coin flip (or Russian roulette with three in the cylinder, if you prefer).

All that would be required to set match to dry tinder would be a single failed Treasury auction. You may consider this unlikely due to the presence of the Fed backstopping all new government borrowing, and that’s certainly a valid consideration, but the wildcard here is that the Fed is merely backstopping all the new Treasury issuances. As I indicated in part one, above, while the US might be floating roughly $1.2 – $1.5 trillion in new Treasuries in 2011, there’s another $3 trillion or so of ‘rollovers’ that have to go off without a hitch as well.

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