Hyperinflation Watch

Inflation is coming back.  In fact, it never really left, although there was a brief moment after the Lehman Brothers collapse when it appeared that the dollar would slip into a deflationary collapse.  But after peering over the precipice, Bernanke and his central bank cohorts around the world did not like what they saw.  So pump they did, and the dollar and other national currencies have been losing purchasing power ever since.  But the loss of purchasing power is about to gain momentum.

Gold and silver are making new highs for good reason.  These market developments are important.  Commodity markets are starting to move like they did back in the early 1970s because inflation is starting to worsen, which is the key observation in my comments to King World News earlier this week.

Look at what is happening in the UK for example: “UK inflation stubbornly high after surprise rise in air fares clothes and food”.  Inflation is not “stubbornly high”.  It is just getting started.

Inflationary pressures are about to hit hard because all the money printing for bailouts and stimulus programs has done little to stimulate the economy.  As a consequence, instead of being used in economic activity, all this money printed over the past few years is now heading for safety – tangible assets.  And gold and silver are the safest and most liquid tangible assets.