Latest baseball scores, trades, talk, ideas, opinions, and standings

Archive for the ‘American Inflation Assn.’ Category

>End The Fed:Ben Bernanke Press Conference A Litany of Lies

>Fed Chairman Ben Bernanke lied to the American public. And I think it’s high time the public got upset with both him and the Federal Reserve System, mad enough to tell their Congress to end the Fed. They spend our taxpayer money; they have no accountability to Congress or the public; they cause inflation to go to almost zero, but for what cause? To create jobs? Are you kidding. They have ruined our monetary system, and they planned to do so to bolster the banks, the Fed’s only client. The only group the Fed is beholden to. You saw how fast trillions of dollars flew out of the Treasury Department to buy General Motors, AIG, Fanny and Freddy, and to boost Bank profits and reserves, didn’t you?

This lying has got to stop. When is Barak Obama going to take his job seriously and look at the Fed as an unnecessary hindrance to ;progress in America? During Abe Lincoln’s time the nation printed its own money that was not tied to interest payments. We could fire the Fed by legislative action. If Obama and harry Reid don’t want to go along, this could be a reason for the American taxpayer to repudiate Obama at the polls in November, 2012. He has had numerous chances to sit down with Bernanke and tell him what to do. Romney would have done this a long time ago. But Obama hasn’t even met with the rating agency that is about to pull our rating down to insolvency, Standard and Poors.

When I was president of Western National Mutual Insurance Group I made trips to A.M. Best, insurance company rater, just to maintain our A- rating. Had I not done that, the rating could have fallen to B or lower.

Presidents have real responsibilities, fiduciary responsibilities to keep the company –and in Obama’s case, the Nation–solvent. It’s a much more important thing than visiting Cape Kennedy to watch the second to last Space Ship take off into space.

Here is an article by the AI A, the American Inflation Association. I agree with everything they said. You should, too. Please read the entire article. Then comment below and call your Congressman. Tell him/her to create a bill that would effectively repeal the Fed which was passed into law 97 years ago. Let’s pound this item. Let your neighbors know why we will soon have six dollar a gallon gas and milk at the grocery store at ten dollars a gallon. Can you afford this? I can’t. let’s get the message out before this thing makes it impossible for any of us to eat. Our way of life is threatened this time because we have a non-responsive president. He told us he wanted to level the financial playing field and that’s just what he’s doing. Our money isn’t going to be worth a thing if this can’t be righted. Don White

 
Food and Energy Inflation is Not Transitory

Federal Reserve Chairman Ben Bernanke on Wednesday held his first press conference in history. The press conference took place shortly after the Fed announced its decision to leave the Fed Funds Rate at a record low of 0% to 0.25%, where it has been for an unprecedented 28 months. The U.S. economy is flooded with U.S. dollars and is close to overdosing on excess liquidity. The fact that our financial markets are not falling on the possibility of the Fed not unleashing QE3 immediately at the end of QE2, shows that we could be on the verge of hyperinflation with or without QE3.

The Federal Reserve currently has a mandate of both maintaining price stability and facilitating job creation. However, central banks don’t have the ability to create real employment. If any jobs happen to be created as a result of a central bank’s policies, they are only temporary jobs created due to the errors and distortions of phony asset bubbles. All phony asset bubbles that are fueled by monetary inflation eventually burst, sending unemployment through the roof.
Almost every major central bank besides the Federal Reserve, understands the truth about job creation, and has a mandate that focuses solely on keeping price inflation low. The Bank of Japan, Swiss National Bank, Bank of Canada, and Bank of New Zealand, all have mandates that are entirely about low inflation and don’t even mention the creation of jobs or the rate of employment. Bernanke said on Wednesday that, “while it is very, very important for us to try to help the economy create jobs and to support the recovery, I think every central banker understands that keeping inflation low and stable is absolutely essential to a successful economy.”
Bernanke has decided to go down a route that no central banker has ever gone before. Bernanke has literally invented countless ways to create inflation that nobody else has ever thought of. If keeping inflation low was ever Bernanke’s slightest concern, the Fed Funds Rate would currently be north of 5% and the U.S. economy would be in a steep recession. Bernanke has never once thought about keeping inflation low. He has literally implemented every measure he could possibly think of to create as much inflation as possible, while outright lying to the American public and saying that he isn’t printing money and that inflation is under control.
Bernanke would like the public to believe that his policies of expanding the money supply through cheap and easy money will cause the U.S. economy to recover and unemployment to decline back to pre-crisis levels, and that right before price inflation spirals out of control, he can raise interest rates and prevent massive price inflation without disrupting the recovery. Unfortunately, this is impossible because the recovery isn’t real and massive price inflation is already here. Bernanke’s policies may have created 1 million artificial jobs since December of 2009, after 8.75 million jobs were lost in the previous two years, but he did this at the expense of 310 million Americans already seeing double-digit percentage increases in food and energy prices.
Since after the Real Estate bubble burst in late-2008, the primary economic concern of Americans has been finding a stable job in order to make mortgage payments and put food on the table. Under the pressure of Congress, the Fed printed enough money to prevent a much needed recession that would be healthy for the long-term U.S. economy. In its attempt to reinflate the Real Estate bubble, the Fed has been destroying the free market and creating new economic distortions, which caused an artificial bounce in the rate of employment. Unfortunately, when you add together the money the Fed has either printed or committed for bailouts and stimulus programs, over $4 million has been spent for each job created. The Fed would have been better off just crediting the bank accounts of unemployed Americans with the average U.S. income.
When asked about rising gas prices, NIA is very happy that Chairman Bernanke acknowledged that gas prices “have risen quite significantly” and are “creating a great deal of financial hardship for a lot of people”. Bernanke admitted that gas is a “necessity” as “people need to drive to work” for the artificial jobs Bernanke created at a cost of $4 million per job. However, Bernanke seemed to be confused when he said “higher gas prices add to inflation”. The truth is, Bernanke’s zero percent interest rates and quantitative easing are the inflation, and inflation leads to higher gas prices.
Bernanke is directly responsible for gas prices rising back to $3.87 per gallon, yet refuses to admit it. Bernanke placed the blame on the growing global and emerging market economies, and their strong demand for oil. He said that America’s demand for oil is going down, which NIA believes is actually due to the U.S. dollar losing its purchasing power and Americans seeing their standard of living decline. Bernanke said there is nothing that he can do about rising oil and gas prices “without derailing growth entirely”. The truth is, Bernanke already derailed growth entirely when he derailed the free market. It is impossible to see real economic growth when a government and central bank is interfering in every aspect of the economy and impeding the free market in every possible way. All nominal GDP growth in the U.S., along with growth in retail sales, is solely due to inflation. Even when the government adjusts GDP and retail sales growth to the rate of inflation, it is based off of the consumer price index, which NIA believes is currently understating price inflation by approximately 4%.
Although Bernanke denies he has the ability to reduce gas prices, he claims he can prevent “gas prices from passing into other prices and wages throughout the economy and creating a broader inflation which will be much more difficult to extinguish.” Bernanke obviously doesn’t want Americans to see higher wages because he believes it could lead to broader inflation, but NIA believes rising wages would be a good thing. Inflation hurts Americans most when the rate of inflation is far outpacing wage increases. The fact is, the U.S. is already experiencing broad inflation even without wage increases.
Bernanke’s brand new favorite word as of late seems to be “transitory”, which he used about a dozen times during his press conference. Despite what Bernanke says, NIA strongly believes that rising food and gas prices are not transitory. Bernanke likes the word “transitory” because he can use it to try and pretend that rising food and gas prices are only just a temporary phenomenon and that their current high levels aren’t here to stay. Many Americans can remember the day 40 years ago when a can of Coca-Cola cost a dime and a Hershey chocolate bar cost a nickel, with a gallon of gas back then costing only thirty-five cents. Have rising food and gas prices over the past four decades been transitory?
NIA first predicted two years ago in its documentary ‘Hyperinflation Nation’, that rising food and gas prices would soon become the primary concern of all American citizens as a result of the Fed’s dangerous and destructive monetary policies. Bernanke back then claimed that inflation would not be a problem and said that the U.S. risked deflation. If Bernanke has been so wrong about the inflation that Americans are faced with today, NIA doesn’t see how anybody can possibly believe that Bernanke will be right and that current high food and gas prices aren’t here to stay. In our opinion, the food and gas price inflation that Americans have experienced over the past 40 years, is likely to occur all over again during the next 4 years. NIA believes that 4 years from now, Americans will look back at the good old days of having cheap $4 a gallon gas.
The last thing the U.S. government wants is for the American public to realize that Bernanke is responsible for rising food and gas prices. If the public demanded to end the Federal Reserve, the government will no longer be able to spend recklessly knowing that the Fed will be there to monetize their deficit spending. In an attempt to make up excuses for rising gas prices and deflect attention away from the Fed, Congress has been pressuring the U.S. Attorney General to investigate the matter. Attorney General Eric Holder just announced the formation of the Oil & Gas Price Fraud Working Group. The stated purpose of this working group is to monitor the oil and gas markets for potential violations of criminal or civil laws to safeguard against unlawful consumer harm.
NIA considers this to be complete insanity. Any government interference in the oil markets will only drive oil prices up even higher. Oil prices are rising solely do to supply and demand. Demand is going through the roof because the Federal Reserve is creating a lot of inflation, and inflation always gravitates to the goods that Americans need the most to live and survive. Oil supplies are falling because President Obama has ordered U.S. troops to occupy Libya. In the past we at least made up excuses to invade countries like Iraq over oil by claiming they had weapons of mass destruction. Today, the U.S. government doesn’t even bother. Obama campaigned as an anti-war President, saying he would bring our troops home from the middle-east. Instead, he has increased our middle-east troop levels, and the sheep who voted for him are showing absolutely no signs of outrage.
It is important to spread the word about NIA to as many people as possible, as quickly as possible, if you want America to survive hyperinflation. Please tell everybody you know to become members of NIA for free immediately at:http://inflation.us
Advertisements

>Why Not Abolish The Fed?

>

How the Fed Is Wrecking the U.S. Dollar

Currencies / US DollarMar 21, 2011 – 06:49 AM

Currencies
Best Financial Markets Analysis ArticleTestimony before the US House of Representatives, Committee on Financial Services, Subcommittee on Monetary Policy, March 17, 2011
The old argument has recently come back into vogue that moderate inflation is desirable to prevent the far greater evil of deflation. What used to be roundly condemned as “creeping inflation” in the 1950s by Fed officials and mainstream economists alike is today given the scientific-sounding name “inflation-targeting” and hailed as the proper goal of monetary policy.1 In the past decade, this view has been promoted by many mainstream economists, most notably former Fed Chairman Greenspan and current Fed chairman Bernanke. But this view is based on a fundamental confusion. It conflates deflation and depression, which are two very different phenomena. Falling prices are, under most circumstances, absolutely benign and the natural outcome of a prosperous and growing economy. The fear of falling prices is thus a phobia – I call it a “deflation-phobia” – which has no rational basis in economic theory or history.
Let me explain. As technology advances and saving increases in a progressing economy, entrepreneurs and business firms are given the means and the incentive to invest in new methods of production, which in turn enables them to lower their costs and expand their profit margins. For a given good, the natural result is an increase in the supply of the good and more intense competition among its suppliers. Assuming no change in the money supply and continuing technological innovation, this competitive process will drive the unit production costs and price of the good ever downward. Consumers will benefit from the falling price because their real wages will continually increase as each dollar of income commands an increasing quantity of the good in exchange.
This is not merely abstract theoretical speculation; it is precisely the process that occurred in the past four decades with respect to the products of the consumer electronics and high-tech industries. Thus, for example, a mainframe computer sold for $4.7 million in 1970, while today one can purchase a PC that is 20 times faster for less than $1,000. The first hand calculator was introduced in 1971 and was priced at $240 (which is roughly $1,400 in terms of today’s inflated dollar). By 1980, similar hand calculators were selling for $10 despite the fact that the 1970s was the most inflationary peacetime decade in U.S. history. The first HDTV was introduced in 1990 and sold for $36,000. When HDTVs began to be sold widely in the United States in 2003 their prices ranged between $3,000 and $5,000. Today you can purchase one of much higher quality for as little as $500. In the medical field, the price of Lasik eye surgery dropped from $4,000 per eye in 1998, when it was first approved by the FDA, to as little as $300 per eye today.
Now, no one – not even a Keynesian economist – would claim that the spectacular price deflation in these industries has been a bad thing for the U.S. economy. Indeed the falling prices reflect a greater abundance of goods which enhances the welfare of American consumers. Nor has price deflation in these industries diminished profits, production, and employment. In fact, the growth of these industries has been just as spectacular as the decline in the prices of their products. But if deflation is a benign development for both consumers and businesses in individual markets and industries then why should we fear a fall in the general price level, which of course is nothing but an average of the prices of individual goods? The answer given by theory and history is that a falling price level is the natural outcome of a dynamic market economy operating with a sound money like gold.
Under a gold standard, prices naturally tend to decline as ongoing technological advance and investment in more and better capital goods rapidly improve labor productivity and increase the supplies of consumer goods, while the money supply grows very gradually. For instance, throughout the nineteenth century and up until World War I, the heyday of the classical gold standard, a mild deflationary trend prevailed in the U.S. As a result, an American consumer in the year 1913 needed only $0.79 to purchase the same basket of goods that required $1.00 to purchase in 1800. In other words, due to the gentle fall in prices during the nineteenth century, a dollar purchased 27 percent more in terms of goods in 1913 than it did in 1800. Contrast this with the current day consumer who must pay over $22 for what a consumer in 1913 (the year before the Fed began operating) paid $1.00 for.
Contrary to our contemporary deflation-phobes, the secular fall in prices under the classical gold standard did not impede economic growth in the U.S. In fact, deflation coincided with the spectacular transformation of the United States from an agrarian economy in 1800 to the greatest industrial power on earth by the eve of World War One. If we examine the data more closely, we find that the years from 1880 to 1896 included the decade of the most rapid growth in U.S. history. Yet, during this period, prices fell by almost 30 percent, or by 1.75 percent per year, while real income rose by about 85 percent, or roughly 5 percent per year. More generally, a 2004 study of 73 episodes of deflation from sixteen different countries dating back to 1820 indicates that only 8 of the 73 episodes of deflation involved recession or depression. It also indicates that 21 of the 29 depression episodes involved no deflation. The authors of this study, Andrew Atkeson and Patrick J. Kehoe conclude, “In a broader historical context, beyond the Great Depression, the notion that deflation and depression are linked virtually disappears.”  Even when the Great Depression is included in the data, they find that the link between falling prices and negative economic growth is economically insignificant.2
Ironically, while Chairman Bernanke just affirmed again a few days ago that the Fed will persist in its inflationary policy of quantitative easing to ward off the imaginary threat of falling prices, signs of inflation abound. The prices of consumer food staples have risen by 6 percent over the past year, with the prices of beef, bacon, butter and lamb rising by 10 percent or more. The U.N. index of grain export prices has risen by 70 percent in the past year and stands at its highest level in 21 years. Gasoline prices have surged 49 percent in the last six months. According to IMF statistics, commodity prices are up by 33 percent in the past year; metals prices by 40 percent; energy prices by 30 percent; crude oil prices by 31 percent; and commodity industrial inputs by 40 percent.3 As a result of skyrocketing prices of agricultural products such as corn, wheat, soybeans and other crops, the price of farmland in the U.S. has been soaring, particularly in the Midwest where land prices increased at double-digit rates last year and even regulators fear that a bubble is forming.
Just today, USA Today reported “that signs throughout Silicon Valley are starting to show eerie similarities to the dot-com bust.”4 Facebook is estimated to be worth $75 billion based on private trading from the SharesPost market, which would mean that it is more valuable than Disney. It is rumored to be in a bidding war with Google for Twitter, with the firms considering bids as high as $10 billion. Over the last year, there have been 48 tech IPOs, which is 28 percent of the total number of deals. Also the stock prices of tech IPOs have leaped 19 percent on the first day of trading.
Not only does Chairman Bernanke seem unfazed by these inflationary developments, but, what is more astounding, he appears to welcome the rapid increase in stock prices as evidence that QE2 is working to right the economy. When it became apparent that the Fed’s $600 billion buying program for treasury bonds had failed to reduce long-term interest rates as intended but caused them to rise instead, Mr. Bernanke desperately sought another sign that QE2 was working. While he denied that the Fed was responsible for rapidly rising commodity prices, he credited the Fed with re-igniting the stock market boom. Oddly, he seized on the Russell 2000 index of small cap stocks, which has increased 25 percent in the last six months, stating “A stronger economy helps smaller businesses.” In other words, despite the stagnant job creation and sluggish growth of real output, Mr. Bernanke has declared Fed policy a success on the basis of yet another financial asset bubble that threatens again to devastate the global economy. This would be farcical were it not so tragic. But what else can be expected from the leader of an institution whose very rationale is to manipulate interest rates and print money.
  1. Time Magazine Editorial, “Creeping Inflation: How to Keep It from Galloping, (Oct. 07, 1957).
  2. Andrew Atkeson and Patrick J. Kehoe, “Deflation and Depression: Is There an Empirical Link,” American Economic Review Papers and Proceedings 94 (May 2004): 99–103.
  3. Commodity data is from Index Mundi.
  4. Jon Swartz and Matt Krantz, Is a New Tech Bubble Starting to Grow, USA Today (March 17, 2011).
Joseph Salerno is academic vice president of the Mises Institute, professor of economics at Pace University, and editor of the Quarterly Journal of Austrian Economics. He has been interviewed in theAustrian Economics Newsletter and on Mises.org. Send him mail. See Joseph T. Salerno’s article archives. Comment on the blog.

>NAI Says Hyperinflation Starts Now, or At End of 2011

>


12 Warning Signs of U.S. Hyperinflation
 
One of the most frequently asked questions we receive at the National Inflation Association (NIA) is what warning signs will there be when hyperinflation is imminent. In our opinion, the majority of the warning signs that hyperinflation is imminent are already here today, but most Americans are failing to properly recognize them. NIA believes that there is a serious risk of hyperinflation breaking out as soon as the second half of this calendar year and that hyperinflation is almost guaranteed to occur by the end of this decade.
 
In our estimation, the most likely time frame for a full-fledged outbreak of hyperinflation is between the years 2013 and 2015. Americans who wait until 2013 to prepare, will most likely see the majority of their purchasing power wiped out. It is essential that all Americans begin preparing for hyperinflation immediately.
 
Here are NIA’s top 12 warning signs that hyperinflation is about to occur:
 
1) The Federal Reserve is Buying 70% of U.S. Treasuries.The Federal Reserve has been buying 70% of all new U.S. treasury debt. Up until this year, the U.S. has been successful at exporting most of its inflation to the rest of the world, which is hoarding huge amounts of U.S. dollar reserves due to the U.S. dollar’s status as the world’s reserve currency. In recent months, foreign central bank purchases of U.S. treasuries have declined from 50% down to 30%, and Federal Reserve purchases have increased from 10% up to 70%. This means U.S. government deficit spending is now directly leading to U.S. inflation that will destroy the standard of living for all Americans.
 
2) The Private Sector Has Stopped Purchasing U.S. Treasuries. The U.S. private sector was previously a buyer of 30% of U.S. government bonds sold. Today, the U.S. private sector has stopped buying U.S. treasuries and is dumping government debt. The Pimco Total Return Fund was recently the single largest private sector owner of U.S. government bonds, but has just reduced its U.S. treasury holdings down to zero. Although during the financial panic of 2008, investors purchased government bonds as a safe haven, during all future panics we believe precious metals will be the new safe haven.
 
3) China Moving Away from U.S. Dollar as Reserve Currency. The U.S. dollar became the world’s reserve currency because it was backed by gold and the U.S. had the world’s largest manufacturing base. Today, the U.S. dollar is no longer backed by gold and China has the world’s largest manufacturing base. There is no reason for the world to continue to transact products and commodities in U.S. dollars, when most of everything the world consumes is now produced in China. China has been taking steps to position the yuan to be the world’s new reserve currency.
 
The People’s Bank of China stated earlier this month, in a story that went largely unreported by the mainstream media, that it would respond to overseas demand for the yuan to be used as a reserve currency and allow the yuan to flow back into China more easily. China hopes to allow all exporters and importers to settle their cross border transactions in yuan by the end of 2011, as part of their plan to increase the yuan’s international role. NIA believes if China really wants to become the world’s next superpower and see to it that the U.S. simultaneously becomes the world’s next Zimbabwe, all China needs to do is use their $1.15 trillion in U.S. dollar reserves to accumulate gold and use that gold to back the yuan.
 
4) Japan to Begin Dumping U.S. Treasuries. Japan is the second largest holder of U.S. treasury securities with $885.9 billion in U.S. dollar reserves. Although China has reduced their U.S. treasury holdings for three straight months, Japan has increased their U.S. treasury holdings seven months in a row. Japan is the country that has been the most consistent at buying our debt for the past year, but that is about the change. Japan is likely going to have to spend $300 billion over the next year to rebuild parts of their country that were destroyed by the recent earthquake, tsunami, and nuclear disaster, and NIA believes their U.S. dollar reserves will be the most likely source of this funding. This will come at the worst possible time for the U.S., which needs Japan to increase their purchases of U.S. treasuries in order to fund our record budget deficits.
 
5) The Fed Funds Rate Remains Near Zero. The Federal Reserve has held the Fed Funds Rate at 0.00-0.25% since December 16th, 2008, a period of over 27 months. This is unprecedented and NIA believes the world is now flooded with excess liquidity of U.S. dollars.
 
When the nuclear reactors in Japan began overheating two weeks ago after their cooling systems failed due to a lack of electricity, TEPCO was forced to open relief valves to release radioactive steam into the air in order to avoid an explosion. The U.S. stock market is currently acting as a relief valve for all of the excess liquidity of U.S. dollars. The U.S. economy for all intents and purposes should currently be in a massive and extremely steep recession, but because of the Fed’s money printing, stock prices are rising because people don’t know what else to do with their dollars.
 
NIA believes gold, and especially silver, are much better hedges against inflation than U.S. equities, which is why for the past couple of years we have been predicting large declines in both the Dow/Gold and Gold/Silver ratios. These two ratios have been in free fall exactly like NIA projected.
 
The Dow/Gold ratio is the single most important chart all investors need to closely follow, but way too few actually do. The Dow Jones Industrial Average (DJIA) itself is meaningless because it averages together the dollar based movements of 30 U.S. stocks. With just the DJIA, it is impossible to determine whether stocks are rising due to improving fundamentals and real growing investor demand, or if prices are rising simply because the money supply is expanding.
 
The Dow/Gold ratio illustrates the cyclical nature of the battle between paper assets like stocks and real hard assets like gold. The Dow/Gold ratio trends upward when an economy sees real economic growth and begins to trend downward when the growth phase ends and everybody becomes concerned about preserving wealth. With interest rates at 0%, the U.S. economy is on life support and wealth preservation is the focus of most investors. NIA believes the Dow/Gold ratio will decline to 1 before the hyperinflationary crisis is over and until the Dow/Gold ratio does decline to 1, investors should keep buying precious metals.
 
6) Year-Over-Year CPI Growth Has Increased 92% in Three Months. In November of 2010, the Bureau of Labor and Statistics (BLS)’s consumer price index (CPI) grew by 1.1% over November of 2009. In February of 2011, the BLS’s CPI grew by 2.11% over February of 2010, above the Fed’s informal inflation target of 1.5% to 2%. An increase in year-over-year CPI growth from 1.1% in November of last year to 2.11% in February of this year means that the CPI’s growth rate increased by approximately 92% over a period of just three months. Imagine if the year-over-year CPI growth rate continues to increase by 92% every three months. In 9 to 12 months from now we could be looking at a price inflation rate of over 15%. Even if the BLS manages to artificially hold the CPI down around 5% or 6%, NIA believes the real rate of price inflation will still rise into the double-digits within the next year.
 
7) Mainstream Media Denying Fed’s Target Passed. You would think that year-over-year CPI growth rising from 1.1% to 2.11% over a period of three months for an increase of 92% would generate a lot of media attention, especially considering that it has now surpassed the Fed’s informal inflation target of 1.5% to 2%. Instead of acknowledging that inflation is beginning to spiral out of control and encouraging Americans to prepare for hyperinflation like NIA has been doing for years, the media decided to conveniently change the way it defines the Fed’s informal target.
 
The media is now claiming that the Fed’s informal inflation target of 1.5% to 2% is based off of year-over-year changes in the BLS’s core-CPI figures. Core-CPI, as most of you already know, is a meaningless number that excludes food and energy prices. Its sole purpose is to be used to mislead the public in situations like this. We guarantee that if core-CPI had just surpassed 2% and the normal CPI was still below 2%, the media would be focusing on the normal CPI number, claiming that it remains below the Fed’s target and therefore inflation is low and not a problem.
 
The fact of the matter is, food and energy are the two most important things Americans need to live and survive. If the BLS was going to exclude something from the CPI, you would think they would exclude goods that Americans don’t consume on a daily basis. The BLS claims food and energy prices are excluded because they are most volatile. However, by excluding food and energy, core-CPI numbers are primarily driven by rents. Considering that we just came out of the largest Real Estate bubble in world history, there is a glut of homes available to rent on the market. NIA has been saying for years that being a landlord will be the worst business to be in during hyperinflation, because it will be impossible for landlords to increase rents at the same rate as overall price inflation. Food and energy prices will always increase at a much faster rate than rents.
 
8) Record U.S. Budget Deficit in February of $222.5 Billion.The U.S. government just reported a record budget deficit for the month of February of $222.5 billion. February’s budget deficit was more than the entire fiscal year of 2007. In fact, February’s deficit on an annualized basis was $2.67 trillion. NIA believes this is just a preview of future annual budget deficits, and we will see annual budget deficits surpass $2.67 trillion within the next several years.
 
9) High Budget Deficit as Percentage of Expenditures. The projected U.S. budget deficit for fiscal year 2011 of $1.645 trillion is 43% of total projected government expenditures in 2011 of $3.819 trillion. That is almost exactly the same level of Brazil’s budget deficit as a percentage of expenditures right before they experienced hyperinflation in 1993 and it is higher than Bolivia’s budget deficit as a percentage of expenditures right before they experienced hyperinflation in 1985. The only way a country can survive with such a large deficit as a percentage of expenditures and not have hyperinflation, is if foreigners are lending enough money to pay for the bulk of their deficit spending. Hyperinflation broke out in Brazil and Bolivia when foreigners stopped lending and central banks began monetizing the bulk of their deficit spending, and that is exactly what is taking place today in the U.S.
 
10) Obama Lies About Foreign Policy. President Obama campaigned as an anti-war President who would get our troops out of Iraq. NIA believes that many Libertarian voters actually voted for Obama in 2008 over John McCain because they felt Obama was more likely to end our wars that are adding greatly to our budget deficits and making the U.S. a lot less safe as a result. Obama may have reduced troop levels in Iraq, but he increased troops levels in Afghanistan, and is now sending troops into Libya for no reason.
 
The U.S. is now beginning to occupy Libya, when Libya didn’t do anything to the U.S. and they are no threat to the U.S. Obama has increased our overall overseas troop levels since becoming President and the U.S. is now spending $1 trillion annually on military expenses, which includes the costs to maintain over 700 military bases in 135 countries around the world. There is no way that we can continue on with our overseas military presence without seeing hyperinflation.
 
11) Obama Changes Definition of Balanced Budget. In the White House’s budget projections for the next 10 years, they don’t project that the U.S. will ever come close to achieving a real balanced budget. In fact, after projecting declining budget deficits up until the year 2015 (NIA believes we are unlikely to see any major dip in our budget deficits due to rising interest payments on our national debt), the White House projects our budget deficits to begin increasing again up until the year 2021. Obama recently signed an executive order to create the “National Commission on Fiscal Responsibility and Reform”, with a mission to “propose recommendations designed to balance the budget, excluding interest payments on the debt, by 2015”. Obama is redefining a balanced budget to exclude interest payments on our national debt, because he knows interest payments are about to explode and it will be impossible to truly balance the budget.
 
12) U.S. Faces Largest Ever Interest Payment Increases.With U.S. inflation beginning to spiral out of control, NIA believes it is 100% guaranteed that we will soon see a large spike in long-term bond yields. Not only that, but within the next couple of years, NIA believes the Federal Reserve will be forced to raise the Fed Funds Rate in a last-ditch effort to prevent hyperinflation. When both short and long-term interest rates start to rise, so will the interest payments on our national debt. With the public portion of our national debt now exceeding $10 trillion, we could see interest payments on our debt reach $500 billion within the next year or two, and over $1 trillion somewhere around mid-decade. When interest payments reach $1 trillion, they will likely be around 30% to 40% of government tax receipts, up from interest payments being only 9% of tax receipts today. No country has ever seen interest payments on their debt reach 40% of tax receipts without hyperinflation occurring in the years to come.
 
It is important to spread the word about NIA to as many people as possible, as quickly as possible, if you want America to survive hyperinflation. Please tell everybody you know to become members of NIA for free immediately at: http://inflation.us