Hyperinflation on the Way

Wall Street Grand Report
(Correction email)


Good afternoon WSG Club!

With currency markets already anticipating the onset of QE2 (Quantitive Easing) much of the impact of Bernanke’s remarks was already factored into the prices and last weeks speech offered very little fresh information except to confirm that further "accommodation" will take place. Chairman Bernanke noted that the Fed will “proceed with some caution” suggesting that the FOMC will be highly data dependent in setting the size of the QE2 program.

The Labor Department reported that consumer prices rose 0.1 percent last month and are just 1.1 percent higher than a year ago, meaning that Fed Chief Ben Bernanke at least got the title right – Monetary Policy Objectives and Tools in a Low-Inflation Environment.

U.S. Federal Reserve Chairman Ben Bernanke said on Friday that high unemployment and low inflation point to a need for a further easing of U.S. monetary policy, but he offered no details on the central bank’s next step. “There would appear—all else being equal—to be a case for further action,”Bernanke said at a conference.

He said a prolonged period of high unemployment could pose a risk to the recovery’s sustainability and said the low level of inflation meant the risk of a dangerous downward slide in prices was greater than desirable. However, he said policymakers were still weighing how aggressive they should be meaning the QE 2 figure is still yet to be determined. I would have to believe the amount needed to support the economy would have to be in the $3-7 trillion mark. But you and I know that is quite impossible to achieve with politics involved. That would prove to be disastrous. In any event it would project at least half trillion dollars to support the 2nd wave of QE.

This also counters the deficit hawks argument. We cannot possibly raise taxes nor raise interest rates to chop the deficit. That would create instability in a fragile US economy. This here illicits the fragility of the economy and growth. The new norm will be 1-1.5% GDP growth at best. The only way to pay down the deficit is….gulp….is to monetize the debt. That’s right folks. We have to create and PRINT MORE MONEY creating more inflation. Now you ask why aren’t we seeing higher CPI (Consumer price index) or PPI numbers. That is because the government is subtracting gas, oil, & food out of the figures. This past week we saw the largest % gain ever recorded in a week's time; Corn rose 10%, Sugar gained 15%, Coffee gained 7%, Oil gained 5%; and the list goes on. We need accurate figures in today’s valuation. Just this week, Google announced they’re considering calculating an index through the prices advertised through the Internet and collect the data more accurately more commonly known as GPI (a.k.a Google Price Index). That could be an exceptional idea in today’s modern economy.

After Bernanke’s comments the U.S. dollar fell against the euro and yen on Bernanke’s remarks, and stock index futures turned positive then fell at the opening. Prices for U.S. government debt rose, but only briefly. Since the U.S. recovery began showing signs of fading over the summer, the Fed has steadily built up expectations that it would renew its large-scale asset buying to support growth. “Non Conventional policies have costs and limitations that must be taken into account in judging whether and how aggressively they should be used,” he said. The central bank’s previous program of bond buying succeeded in lowering borrowing costs, but adding to the Fed’s already enlarged balance sheet has risks and it is hard to calibrate the scope of any further purchases, the Fed chief said.

Many countries, worried about the impact on their exports, have taken steps to temper the rise in their currencies, sparking fears of a series of competing devaluations.

This supports our argument that Hyperinflation will be upon us sooner or later. No wonder Bonds, gold silver, and other commodities are at an all-time high. Compare our policies to the German economy during the 40′s and 50′s. The Mark’s (former German currency is non existent) due to hyperinflation. Will the US dollar be next 10-20 years down the road? Who knows maybe even sooner than you think...

There are many Americans who are wealthy today but will be poor within the next few years because they all have there wealth invested in US Treasuries and dollar denominated assets. Over the past few years we at Wall Street Grand have been urging members to get out of the dollar and into real money- gold and silver. We told you to start buying when gold it was under $800 an ounce!!!

Here is a direct quote that you could look up from an alert we sent on September 7, 2007-

"One thing that I have always strongly believe in is GOLD. Gold just hit a new high of $746 per ounce! I want to say right now that I really believe this is just the beginning and that gold is the safest bet you can make right now for the long term. Mark my words-"

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The longer everyone waits to get rid of their US dollars and buy precious metals, the more of their purchasing power they will lose. It's that simple.

We are in the process of agressively building our WSG club right now and will have a lot of exciting info over the next couple months. We thank all of our members that have stuck by our side and have supported us.

We believe we are going into what could be the biggest boom of our lifetimes and we want everyone to capitalize from all of the unbelievable opportunities that we present. This is our time!

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