Inflation Is Going To Increase Very Substantially As A Result Of Money Printing

Thu, 28 May 2009

Martin Hennecke, associate director at Tyche Group, explains why he thinks inflation will become a major problem and recommends precious metals and commodities to hedge against such inflation.

Two snippets from the interview:
"The banking crisis, the subprime crisis, hasn't been fixed at all, just simply transferred the problems from the banks to the books of the governments, especially in the Western countries. And now this is why the Federal Reserve has to raise, and the U.S. government has to raise such insane amounts of money --- 1.8 trillion dollars, is likely to be the deficit for this year. That's just the lower estimate, even Obama's government came out saying that [they] likely have to revise this due to the unemployment figures..."

"Inflation is going to increase very substantially as a result of all this money printing as they can't really raise all these funds that they need to raise for the bailouts and they will have to print substantial amounts of debt. Quantitative easing will get worse. As you have said, the Chinese are getting extremely nervous of this. We just had a projection from [the] Dallas Federal Reserve President, saying that the unfunded liabilities of the pension and healthcare in the U.S. is $99 trillion. So inflation is going to be a major issue going forward, so even for cautious investors, they need to invest just to protect their wealth. Gold definitely is one of the asset classes we like..."

Category:

News & Politics

Tags:

• stagflation
• inflation
• stagnation
• deflation
• depression
• recession
• economy
• financial
• GDP
• CPI
• PPI
• economics
• gold
• silver
• oil
• dollar
• money
• supply
• monetary
• base
• Federal
• Reserve

[unworldlything]

gold goes up, then what of silver?

[hyperstagflation]

Don't forget crude oil, guys.

Largo, why no ETFs or stocks? Gold/silver mines provide pretty good returns.

[ForTehNguyen]

get rid of your toilet paper for gold/silver

all the ingredients for inflation are there

[audiohi]

Invest in the Canadian and Australian dollar.

Canada because of oil, Australia because of gold.

Among other reasons.

My vote, gold 2,000 by end of year.

5,000 by 2011 maybe 2012.

[Gary1111001]

@zppz Gold/Silver are the original money, and only Real money(the world standard throughout civilization). It'll always be good. Fiat (paper money) is only an iou (promise that you'll get your gold back). Paper money comes and goes. If you have it when it goes... u don't get your gold back.

[motuv]

Just remember, gold is not a hedge on inflation, it is a hedge on volitility. Sometimes they come together.

[Choclu7]

cant wait to buy more stuff from the US when your currency goes to nuts

[chefshitpiece]

Chinesse people never swear...asshole...asshole! C\mon everyone, sing along!

[tothemax01]

@audiohi Fail.

[dojufitz]

Not really,

anyone who has held Silver and Gold thru a currency crisis has always been able to survive and prosper.....some have been able to increase their wealth alot.

All things go up but lose value against Gold and Silver - eg. Homes instead of costing 80oz of Gold can end costing 12oz - so you decide to buy say 5 homes instead of 1.

[pjblabla]

if us dollar collapses and gold goes to $20,000 then the $20,000 you will get by selling your gold will probably be worthless - won't it?

you are as likely to benefit from US dollar collapse by being in euros or any other currency - unless all FIAT currencies collapse - well if that happens then ammunition will be much better than gold

[ItsFazsha]

The USA is the greatest country in the world, and you will always be able to buy a six pack of Coke for 25 cents, just like Warren Buffett did in the 1930's. (What do you mean it's $4.99?)

[zppz]

Keep in mind that GLD/SLV are only a "promise to pay" - so you're not really holding anything