(from8/13/09)ECONOMIC COLLAPSE,THEN COMES DESTRUCTION BY FIRE(AMERICA THE GREAT)

GREETINGS,

WHY IS AMERICA FALLING?IS IT BECAUSE OF CORRUPTION?IS IT BECAUSE OF FRAUD?IS IT BECAUSE OF THEFT?IS IT BECAUSE OF HER DOUBLE CROSSING OF HER ALLIES AND ENEMIES?
WELL TO SOME TO SOME EXTENT THE ABOVE QUESTIONS ARE APART OF THE REASON OF HER FALLS.HER MAIN REASON FOR HER FALL OF THE BRINGING OF THE AMERICAN SO-CALLED NEGRO HERE IN THE WESTERN HEMISPHERE FOR EXPLOITATION,EXPERIMENTATION,AND THE MOCKING OF GOD’S ANNOINTED.ALSO FOR THE KILLING OF THE RED INDIAN.THESE TWO PEOPLE MUST BE REDEEMED.
SHE(AMERICA) HAS BROUGHT ALL OF HER TROUBLES UPON HERSELF.HER CITIZENS WERE THE BENEFACTOR OF 3 1/2 CENTURIES OF FREE LABOR WHICH ENRICHED THEM AND MADE HER THE MOST POWERFUL AND RICHEST NATION ON EARTH.YET THROUGH ALL OF HER TROUBLES SHE HAS YET TO ACKNOWLEDGE WHOLE HEARTEDLY THE SACRIFICE OF HER SLAVE.SHE HAS AS YET TO GIVE TRUE JUSTICE(A TRUE HISTORY OF HER EXPLOITS AGAINST THEM)AND FINANCIAL REPARATIONS WITH LAND(FREEDOM INDEED).ALL SHE PAYS IS LIP SERVICE WITH NO SUBSTANCE BEHIND THE WORDS.
JUSTICE FOR HER EX-SLAVES WOULD HAVE FORESTALLED THESE PLAGUES AND JUDGMENTS WHICH ARE NOW BRINGING AMERICA AND HER CITIZENS TO THEIR KNEES.SO AMERICA…”AS THOU HAS DONE,SO SHALL IT BE DONE UNTO THEE.”—————————–” A pessimist’s prediction: Hyperinflation
Does the Fed’s massive money printing mean inflation is about to soar? I’m not jumping on that bandwagon, but gold is still an attractive bet right now.

[Related content: stocks, investments, Federal Reserve, General Electric, Bill Fleckenstein]
By Bill Fleckenstein
MSN Money
Last week’s 26-year high in the price of sugar must have stuck in the craw of the deflationist camp, those who fear a bout of falling prices. And that’s as good a segue as any to the inflation-vs.-deflation debate.

I’ve spilled plenty of ink on this important topic (for example, read “What’s next: Inflation or deflation?”), and this week I’d like to turn to a friend of mine, Marc Faber, for his assessment.

How bad can inflation get?
Marc’s most recent Gloom, Boom & Doom Report contains an excellent discussion of inflation vs. deflation, and he makes the connection between the policies we’re pursuing — massive stimulus to create inflation, due to the fear of deflation — and the funding crisis that I have warned about that will arrive as the U.S. has trouble financing its increasing debt. (Read “Why creating jobs is so hard.”)

I decided to quote liberally from Marc’s report. But I encourage folks to read it in its entirety. (Here’s the Gloom, Boom & Doom Web site; a subscription is required.)

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What’s next: Inflation or deflation?

For newer readers who continue to ask me to elaborate on this subject, hopefully Marc’s commentary will bring them up to speed:

Deflation can be avoided through debt and money printing. This isn’t to say that I support such policies, or that I find deflation to be “bad” and inflation to be “good.” (Price stability is the most desirable condition.) But the point is that if a government is really determined to inflate its problems away, it can be done. Those people who believe in deflation have, however, some strong arguments. Their principal contention is that the economy is so weak (output gap) that the private sector’s contraction cannot be offset by government spending and money printing.

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In fact, the massive money printing and the rest of the stimulus are why gross domestic product has held up as well as it has. More from Marc:

The deflationist argues that, because we have a weak economy, we shall have deflation; an argument with which I would tend to agree in the very short term.

Video on MSN Money
Marc Faber on the risk of hyperinflation

The editor and publisher of the Gloom, Boom & Doom Report says there’s a good chance for hyperinflation in the US.

I believe that in fact we have passed the point of maximum downside pressure. But more from Marc:

A true deflationist will also argue that because of deflation, economic conditions will worsen and, therefore, long-term U.S. government bond yields will decline. . . . But what happens to fiscal deficits and monetary policies under a scenario of a further decline in economic activity and a further collapse in asset prices? The answer is very simple. Deficits will increase further and more money will be printed. And the longer weakness in the economy prevails under the deflationary scenario, the more fiscal deficits will pile up and the more easy monetary policies will be pursued.

What the Federal Reserve does
So, whereas near-term deflation is a distinct possibility, in the longer term inflation is more likely because of several factors. When the economy recovers (and the recovery is likely to be fragile), the Fed will be very reluctant to increase short-term rates. Another reason for the Fed’s reluctance in this respect will be the size of the government debt, given that higher interest rates would increase the interest burden. Therefore, I can’t imagine any scenario under which the Fed wouldn’t keep interest rates at an artificially low level, as it also did post-2001. That such a monetary policy, combined with the growing fiscal deficits discussed above, is more likely to lead to inflation rather than deflation should be clear. ————- A pessimist’s prediction: Hyperinflation
Continued from page 1

[Related content: stocks, investments, Federal Reserve, General Electric, Bill Fleckenstein]

Faber on the funding crisis
And here, in Marc’s words, is what the funding crisis could look like:

For the reasons I explained above, inflation will pick up. With or without Fed tightening, interest rates will shoot up because of a loss of confidence by foreign U.S. dollar debt holders and the dollar tanks. Government debt payments and health care expenditure will soar. Instead of contracting, fiscal deficits will increase and force the Fed to continue monetizing the debt at a time when it should be tightening. . . .

How bad can inflation get?
A vicious cycle of higher and higher inflation rates and a weaker and weaker dollar will follow amid economic weakness, because personal incomes will be squeezed by inflation. Eventually, hyperinflation will follow. So, in the debate about inflation and deflation, both camps could be right but at different times.

Marc is far more certain than I am that hyperinflation lies ahead. For me, it’s way too early to have to make that determination, and it’s not at all clear to me that that is our ultimate destination.

However, I am more certain than he is that the maximum deflationary pressures have passed. The policies of the Fed and other central banks are why I continue to advocate that folks own the currency with no central bank to screw it up: gold.

More from MSN Money
Recession has ended, but pain hasn’t
Why are company insiders selling?
The recovery puzzle’s missing piece
Why creating jobs is so hard
What’s next: Inflation or deflation?

GEe, who knew?
Lastly, in the slap-on-the-wrist department, General Electric (GE, news, msgs) announced Aug. 4 that it had agreed to pay a $50 million fine to settle an accounting fraud complaint brought by the Securities and Exchange Commission. That followed news of the day before that Bank of America (BAC, news, msgs) had agreed to pay $33 million to settle a similar charge, regarding false statements that it made on the Merrill Lynch deal.

Were these attempts to just sweep problems under the rug? Many of us have thought that GE has been monkeying with its numbers for a long time in an attempt to win at the game of beat the number.

The modest fines imposed by the SEC make it look as though GE and Bank of America had done nothing more than tell little white lies — which hardly instills confidence that the agency is serious about its role as enforcer of financial integrity.

Video on MSN Money
Marc Faber on the risk of hyperinflation

The editor and publisher of the Gloom, Boom & Doom Report says there’s a good chance for hyperinflation in the US.

Regretfully, this is what I’ve come to expect from the government. (If I were surprised, I’d be outraged.) What those in command do is rescue the “establishment” rather than punish them for wrongdoing. How else can you interpret giving GE the functional equivalent of a parking ticket in light of the fact that, according to Bloomberg:

What the Federal Reserve does
“The company broke accounting rules four times in 2002 and 2003 to increase earnings or avoid reporting negative financial results, the Securities and Exchange Commission said in a lawsuit in federal court in Connecticut today. ‘GE bent the accounting rules beyond the breaking point,’ SEC Enforcement Director Robert Khuzami said in a statement. ‘Overly aggressive accounting can distort a company’s true financial condition and mislead investors.'”

If this is what the paper tiger SEC decided to charge GE with, who knows what creativity really took place? I’m sure financial scoundrels everywhere are laughing all the way to the bank.

At the time of publication, Bill Fleckenstein owned gold bullion and gold futures.”

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