HYPERINFLATION (the actual word is finally used)
Hyperinflation explained, references to the Weimar Republic - a currency so debased that it is used to paper walls, or as fuel for fires.
The Big [unanswered] Question -- At what point does the rate of inflation get to before people begin to panic to the point of flight from the currency? In other words, the point at which everyone begins to panic together?
When panic sets in it gets to the point where you have, simultaneously, a rapid right now demand for goods (people buying as quickly as they can before goods increase in price) along with, paradoxically, an ever-increasing rate of demand for more of the increasingly inflated currency.
This result, with massive shortages occurring as all goods are exhausted or else pulled from supply based on the fact that they will command far more of that ever-devalued currency tomorrow. The currency eventually begins to lose value at such a rate that it is devalued even in advance of its issuance -- until finally no price of the inflated currency is enough to buy anything at all, unless its on par with the paper value of the currency (i.e., you won't take it as money, but you might barter it for fuel).
RETIREMENT CONCEPT DESTROYED
The reality of "retirement age" for most people goes out the window, as more people are forced out of retirement and back into the workforce. Property will decay as money is spent on necessities only.
The initial and unavoidable reaction by the Fed in the absence of foreign confidence, will be to stimulate through more inflation (Bernanke really does fire up his helicopter).
ALL COUNTRIES AFFECTED
There has never been a "fiat reserve currency" for the world prior to 1971, so nobody has ever witnessed a global hyperinflation of such a currency, and there is no human comprehension of how such an unprecedented event would even play out.
There is no escaping the fact that all other currencies are basically dollars, because that is what they are all reckoned against.
"The US government has a technology, called a printing press (or today, its electronic equivalent) that allows it to produce as many U.S. dollars as it wishes at no cost." - Ben Bernanke, Nov. 21, 2002
The US government has this power, but it is at the cost of promises to everyone that there will always be an ultimate cost, in the case of bonds. However, it is not only the US government that has this power to produce as many of these dollars as it wishes. The Fed has been given the power - by that same government - to do this independently, on its own. It is the ONLY entity on Earth that truly has the ability to create as many dollars as IT wishes at no cost (to itself).
HYPERINFLATION ONLY ONE PATHWAY TO AND END DISASTER THAT IS ALWAYS THE SAME
Regardless of whether an fiat currency regime experiences a phase of deflationary depression or goes straight into hyperinflation, all fiat currencies that have failed (with a proven 100% failure rate) have ended in disaster.
Our "Grand Experiment" with the dollar as a world reserve fiat currency - something never, ever attempted before on this scale or magnitude,
is only 40 years old.
Again, just my personal note: The eventual death of our own sun (a yellow dwarf) billions of years from now will be very different from the death of a star like Betelgeuse, a Supergiant with twenty times our own sun's mass. Our sun is like a Zimbabwe - a red giant that simply feeds on itself until its energy is exhausted and it expands outwardly into a red giant before finally shedding its depleted outer layers, and leaving behind a white dwarf which generates nothing and eventually cools and dies. Our global economy is more like a Main Sequence Supergiant, due to its greater mass.
The difference at this point between a supergiant and a main sequence star is that a supergiant has the pressures needed to fuse carbon into iron. However, this fusion process takes energy, rather than gives it. So, as energy is lost, the star no longer possesses the balance between outward pressure and gravity pushing in. As a result, gravity wins out, and the core collapses in a violent explosion called a supernova.
CONFIDENCE LOST - AND MUST BE REGAINED - AGAIN
History only repeats itself, as confidence lost in one currency must be replaced by confidence in a new currency. It doesn't have to be gold or silver, but historically that's what it has always been.
WHY GOLD AND SILVER BACKING NOT EVEN DISCUSSED
Those who have benefited most from the Ponzi scheme don't want the ride to end. Prices artificially suppressed to make PM's appear less desirable. Groups like GATA (
Gold Anti-Trust Action Committee) have been tracking what they claim is the deliberate suppression of gold and silver prices. Numerous lines of evidence, some easier or harder to prove than others, but reported sales by government central banks cited as prima facie evidence of price suppression.
Greenspan admitted in 1998 that central banks were both willing and able to suppress the price of gold when he said, "Central banks stand ready to lease gold in increasing quantities should the price rise." - Alan Greenspan, July 1998
...meaning, since the target already existed as an objective, and central banks had already done it, that they were already doing it.
Other means of suppression investigated - like western country CB's loaning gold to bullion banks, which sells gold with the intention of buying it back in the future at a cheaper price. These banks are known to buy government bonds with the proceeds of this sale. In other words, shorting gold using US government promises to pay. The central banks report the gold they have, along with the gold they've loaned out, as one item. The gold they claim they have on reserve may have been sold by a bullion bank in exchange for government bonds. Thus, based on a change in reporting practices just a few years ago, the central banks are counting what they physically have and what people owe them for what they have loaned out and no longer have -- as if they were the same thing. Basically, fraudulent accounting.
WHY SUPPRESS THE PRICE OF PM'S?
They're the only real competition to fiat currencies, and government power over them, regardless whether they are recognized as money, and regardless of whether they circulate as such. The power to create fiat currency is very different from the power to create hard specie, because if the currency is hard specie, the ability to tax and spend is limited to what can be taxed directly - which has definite limits. With a fiat currency governments are only limited to how much they can dip into the future - which appears limitless.
2/3 finished, 20 minutes to go...