Thread: What do you think of Hyperinflation?

I have watched the US dollar all my life and I have never seen anything like it is now.
During the war you could get a loaf of bread for 10 cents,, I got a dime a week for helping my dad do the dishes after a meal and keep the wood box full of wood for the kitchen stove,
I would go to the Matinee on saturday afternoon for 9 cents and get a big piece of fudge candy for that 1 penny change.
Now what does it cost in the US to go to a movie $5 or $10? I treally do not know as I have not been to a movie theatre in 30 years.
Used to be in 1962 that they quit taking out social security at $4,800 gross,, now it is about $160,000 gross.
I could make $400 a week and more by working overtime on construction jobs as a welder/mechanic on heavy equipment, and half my pay went into a savings account,, now try to make blue collar wages and save 50% of your gross, fucking income tax will be over 50% if you make good money.
Gasoline at 20 cents a gallon,,now it is $4 or 5.

I believe this article.

National Inflation Association

U.S. Hyperinflation Possible By Year 2015
Posted: 03/17/2010 00:51:27

We are now at a point where if the U.S. government taxed Americans 100% of their income, the tax receipts generated would not be enough to balance the budget. Likewise, if the U.S. government cut 100% of its spending including defense, but kept paying Social Security,
Medicare and Medicaid, we would still have a budget deficit. NIA believes it will be impossible for the U.S. to have a balanced budget ever again.

Originally Posted by blackgang

Gasoline at 20 cents a gallon

My dad used to drive us all crazy as he drove for miles to find gas for 16 cents a gallon during the gas wars.

Yep, I had a calif coupe, 1930 Model, Chop, Channel, Yellow jacket 4 banger dual carb street rod,, damn near fill the cowel tank for 1$

In the last 50 years so far the highest inflation was in the 70s. Unlike me you old folks should remember.

Yes, and just look who the presidents were during and following those years.
Nixon, but of coarse he had the Viet war debt, which is no more than fair as Eisenhower/Nixon were #1&#2 and started the Viet war by promising the Frog Degaule(sp) to back him at Dien Bien Phu then didn't do it and pissed the Frog off.

Ford, who was an idiot, but not his fault,,

Then the worst prez ever,, Jimmah Carter a fucking peanut farmer with an alcoholic, crooked grafting brother selling US to foreign interests as fast as he could.

Then following them into the 80's you have the world famous cowboy actor and EX Calif. Governor Ronald Reagan who spent more money than 10 preceding presidents all totaled and did the same as Obama baby, except he busted the unions before Clinton could come in and do it.

and the 70's ended in a real cluster fuck.

you forget to look at growth, do you really believe you could live again like in 1930 ?

you want progress ? it comes with inflation and growth, no other way

Fucking right I could, we lived on a cattle ranch of 10,000 acres until after the war, we had no electricity, bunch of horses and an old single cyl John Deere iron wheeled tractor, we grew or killed and butchered and preserved most of what we ate, bought material and my gram made a lot of our cloths, we had our own wheat and oats milled and flour made.
Went into town about once a month and bought some stuff.
We were actually self sufficent, we ate good and felt good, clean air, no pollution or contamination, my granddad was killed in a car wreck cause he was drunk, and my gram lived to be 101.
And damn right , I do miss them days, altho I left home to roam the world when I was a kid, I could still do it as life is what you make it. And not miss any of this shit because we didn't have it and never even thought about it,, but shit changed during the war and will never be right again.
But you are a spoiled [at][at][at][at] so you do not understand what am talking about....

Originally Posted by Muadib

On balance, the situation in EU is more concerning at the moment than the US...

Damn sure is, seems that everyday the euro drops a little more.
And there was a bunch of the kangaroos on here mean mouthing USA and harping that oil should be rated in euros instead of the US Dollar,, don't see much of that shit no more, altho the Buck is shot in the ass too.

Here is a Bloomberg headline on the topic as of today...

U.S. Economy: Consumer Prices Stagnate, Leading Index Climbs - Bloomberg.com

U.S. Economy: Consumer Prices Stagnate, Leading Index Climbs

March 18 (Bloomberg) -- The U.S. economy will keep expanding without a pickup in inflation that would require the Federal Reserve to raise interest rates, reports today indicated.

Consumer prices were unchanged in February, the first time they didn’t increase since March 2009, Labor Department figures showed today in Washington. The index of leading indicators rose 0.1 percent last month, the 11th straight gain, according to the Conference Board, a New York research group.

Balance of article via above link...

Expecting C$ to go to C$1.25/US$ by summer...

well the buck keeps on losing a tad on the Baht, thats what interest me now, it is 32.22 TT now and I got 32.59 on my transfer last week for more money to replace the stolen PC for my wife. Hadn't figured that into the budget.

Thanks Jetty. you are cool..

Originally Posted by blackgang

Thanks Jetty. you are cool..

Course I am. I'm just like you, BG.

Have to keep track of how many pieces of paper the Fed is printing, the deficit, world economies. Hey, if Europe falls, the greenback should be OK there. A bit late to buy gold.

Originally Posted by blackgang

Fucking right I could, we lived on a cattle ranch of 10,000 acres until after the war, we had no electricity, bunch of horses and an old single cyl John Deere iron wheeled tractor, we grew or killed and butchered and preserved most of what we ate, bought material and my gram made a lot of our cloths, we had our own wheat and oats milled and flour made.
Went into town about once a month and bought some stuff.
We were actually self sufficent, we ate good and felt good, clean air, no pollution or contamination, my granddad was killed in a car wreck cause he was drunk, and my gram lived to be 101.
And damn right , I do miss them days, altho I left home to roam the world when I was a kid, I could still do it as life is what you make it. And not miss any of this shit because we didn't have it and never even thought about it,, but shit changed during the war and will never be right again.
But you are a spoiled [at][at][at][at] so you do not understand what am talking about....

,,sounds great where you grew up. see a movie in blighty is about $16 and gaso. about $10 for 5 litres. as always, how much do you have in your pocket after all those taxes are paid.

I was pulling levers on a dredge on Salt Lake in Utah in 83/84, and with there being a wet few years and water rising the union was short of qualified dredgermen and especially levermen.
So we worked 24/7 building the leves for the solar evap. ponds as they were losing millions of dollars in rich brine back into the lake.
We only had 2 levermen on my dredge so we split at 0700 and at 1900, but with 3 crews on deck,
The overtime scale was straight time for 8 hrs, x1 1/2 for 2 hrs and x2 for over 10 hrs., or sat was x1 1/2 for 8 and everything over that and sunday was x2.
The crews working regular 8 hr shifts were taking home about $500 a week, I was Tax Exempt which is really not illegal but it is frowned on by IRS, so I took mine home , which was over $2500 a week and when I reverted back to paying tax as I did every year for a few months, they hit my check for over 62% of my gross so cut me to less than $800 a week. Not really fair as it takes away your drive to get ahead..

Courtesy of Investment Research, Stock Analysis, Investment Advice, Newsletters .....posted here with full permission.

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A serious warning about muni bonds... 'Unconscionable'... Paying debts is now optional... Citigroup is holding the bag, again... Traveler goes to Disney... Why we're short and long the same business...

"To disrupt our services because we can't make a bond payment would just be unconscionable. And as a leader I couldn't do it." So explained Linda Thompson, the mayor of Harrisburg, Pennsylvania. She was explaining the city's refusal to repay part ($3.29 million) of the $288 million it owes for an incinerator it bought. The total obligation for the incinerator comes to roughly $6,000 per citizen of the city. It is a debt that can't be repaid and should have never been lent.

Unless you happen to live in Harrisburg, you probably didn't see this item in your local paper. And you probably wonder why we'd lead with it in the Digest. After all, why should the impending bankruptcy of a small Pennsylvania city matter to you?

We led with it today because it represents the next leg of the debt crisis – the failure of municipal finance. We were also struck by the logic of the mayor... who clearly views paying the city's debts as optional. She knows the state of Pennsylvania will be forced to bail out her city. (If the state doesn't intervene, it will be impossible for any other city in Pennsylvania to issue bonds.) And even if the state refuses, the bonds are insured by Ambac, which means, in the eyes of the mayor, it's likely that no one will get hurt by her decision. That's how a $288 million loss can become irrelevant to an elected local official. Like a subprime borrower living in a house without paying his mortgage, the mayor of Harrisburg thinks paying for its debts is someone else's problem. She's bringing Obamanomics to city finance.

We have this warning to offer: When our elected officials no longer care about repaying hundreds of millions of dollars, the entire system of municipal finance is going to collapse. And the damage that's going to occur will be material to our entire country. The system that exists today was created in the 1970s. The entire system is predicated on the lie that states won't allow losses to muni-bond holders. That's the only reason muni-bonds are insurable: The insurance companies know there will never be a claim. They have no reserves to cover the risk of municipal losses because there have almost never been any. Over the last 40 years, the default rate on investment-grade municipal debt was 0.03%, according to the credit-ratings service Moody's.

You can think of this system as similar to the subprime-credit bubble. No banker in his right mind would loan money to a person with no credit and no job who was buying a house in a slum. But once you took the credit risk away from that banker, he was happy to lend billions on deals like that because the risk became someone else's problem. Billions in bad debts piled up. Suddenly, it was the banker's problem again because he'd destroyed the entire system.

The same thing is about to happen in the muni-bond market: Nobody has paid any attention to credit quality because everyone believed the states won't allow cities to go bust. As a result, a truly stupendous amount of money has been lent to cities – cities that have no hope of ever repaying the debts. Specifically, municipal debt now totals $2.8 trillion – roughly 22% of our country's GDP. That's an all-time high. The amount of debt owed by cities has doubled since 2000. And the debts are now too big for individual states to guarantee.

Harrisburg is small potatoes. Mass transit systems are a much, much bigger problem. Almost every local politician in America has promised a subway, a train, or a bus to take his constituents to work for next to nothing – but running these systems is incredibly expensive. In Boston, the mass transit authority is now $8.5 billion in debt and has been paying $500 million per year in interest. Does that sound sustainable?

What about all of the stadiums and arenas built over the last 20 years? Politicians love to build these things as part of citywide "revitalization" efforts. But paying for them? That's somebody else's problem. Take the Meadowlands – the football stadium built nearly 40 years ago. It was torn down last year, but it has never been paid for. The New Jersey Sports and Exposition Authority (aka the State of New Jersey) borrowed $302 million to build it and never repaid the debt. Today, it owes more than $800 million and spends $100 million per year on interest for a stadium that no longer exists. California has 380 different local redevelopment agencies, which collectively owe $29 billion. This money will never be repaid.

When I warn people about muni-bonds I always get the same reply: "Governments don't go broke." Oh yes, they do. States face a cumulative budget gap of $140 billion in the next year – they don't have the money to guarantee these debts. Meanwhile last year, more than 187 tax-exempt issuers defaulted on $6.4 billion of securities – the most since 1992. These numbers are going to get bigger – a lot bigger.

You see, all of this credit was only made available because lenders believed (foolishly) that there was no risk in lending to cities and states... just like they handed out all those subprime loans, believing they would never default because "home prices never decline." But after a few city bankruptcies (like Harrisburg), that thinking is going to change – forever.

With less (or no) additional credit available, how will cities and states be able to refinance at a reasonable price? Just like when the subprime credit markets shut down, the whole system collapsed because no one could refinance. The same thing is going to happen with the cities and the states. There's a very good chance that once the dominoes start falling, there won't be any way to stop them without a massive federal bailout.

Oh... one more thing... guess which bank has the most exposure to the muni bond market? Again, just like with subprime, it's Citigroup. It holds $13.4 billion, roughly twice as much as the other major banks.

Federal Bailout = the US printing/creating more USD out of thin air.

Can we say 5 or 10 THB= $1.00 USD. Not saying this will happen soon, but I aim to plan for it as being inevitable for my kids.

^^ Very interesting post, the state budgets really do not look good, the European PIG countries and the problems for the Euro in that context with the Euro falling, seems to be not affecting the USd in the same negative way when it comes to the disastrous state economy, investors are still buying the US bonds.

^ Munis are for cities, and higher risk than Treasuries, but more attractive largely because the interest income is tax-exempt from the fed and often local/state taxes.

How much is the risk premium on those bonds, how much higher is the interest rate than federal bonds?