Bob Chapman on Discount Gold Silver Trading 11 May 2011
Freedom Files w/James Burns
http://youtu.be/PDaYB6Tcd9U
http://freedomfiles.us/
http://freedomfiles.us/
Kerry Lutzhttp://tinyurl.com/Bob-Chapman-5-12-2011
US MARKETS
The elitists who run America from behind the scenes have serious problems in trying to keep a badly damaged financial and economic system afloat. Ironically, these same characters are the ones responsible for the system and the condition that it is in today. It is not only confined to the US, but it prevails in England, Europe and other counties as well. Central bankers are all in constant touch with each other to employ tactics that will extend the current system in the hope that something they are doing will turn into at least a temporary solution. The US maintains virtually zero interest rates and floods the economy with money and credit. The European Central Bank, the ECB, raises interest rates, but continues injecting money and credit into the system. In Europe the higher interest rates are supposed to offset the inflation caused by the increase in money and credit. On the short term it isn’t going to work. On the long term much higher rates will work, if the increase in money and credit is lowered or stopped. The unpalatable problem with that is this medicine will collapse their economies. All these parties should have purged the system in the early 1990s when they had the chance, or just three years ago, when they had another chance to do so. The result is the inflation we see today, 6% in Europe, 12% in Britain and 10% in the US. The path these bankers have laid out will lead to hyperinflation and ultimately to deflationary depression. The approaches employed by both the US and Europe won’t work and the elitists know they won’t work. Historically these conditions are nothing new. We have seen them over and over again. More often the solution is to have another war, which can take the blame for the monetary, fiscal and economic profligacy and at the same time relieve the world of copious useless eaters.
Real inflation is now at about 10% based on earlier formulas, as opposed to present official government doctored figures. These are close to the numbers of the1980s. Officially those numbers were 10%, but we were there and the numbers were 14%. We expect real inflation of 14% or more by the end of the year as QE1 and stimulus 1 effects play havoc with consumer purchasing power. Presently the PPI, the Producer Price Index, is 10% and that same figure applies to the cost of imported goods as well. As long as interest rates remain at zero and the creation of money and credit continues, inflation will climb ever higher. The Fed tells us that there will be no change in rates until after September. The Fed just observed the ECB raising rates. The next rise was set for June and we have already been told that won’t happen. Except for Germany all of the EU, not just the euro zone, is faltering. Europe and the US may not see higher rates until inflation exceeds 25% next year. As long as interest rates remain below the real rate of inflation little will be accomplished to bring inflation under control. These numbers are all within the confines of QE1 and QE2 and stimulus 1 & 2. We see no way to avoid QE3. Who will buy the Treasury’s debt? That being the case inflation three to four years out could reach 50%. Needless to say, rates would have to exceed 50% to slow down the economy and that would eventually entail a deflationary depression. During such a process as rates reached a peak, commodity prices would falter and begin to reverse. Gold and silver would lose their assisting inflationary impetus, and their course would depend on the strength of currencies. Both could strongly represent the only real money as they have in the past. We won’t know the final outcome until we get there, because many other factors could enter the equation, such as world war.
***********************************
