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Part 2 of the John Williams Interview: Hyperinflation Ahead

Wednesday, March 2, 2011, 11:57 PM

The second part of Chris' interview with John Williams, noted guru on government statics, is reserved below for you, our enrolled members.

If you've not yet listened to Part 1, click here to do so.

Part 2 of the interview delves deeply into the specific risks our economy faces and why John concludes high inflation is the sad but certain outcome. And why he has substantially moved up his date for the onset of hyperinflation given the Fed's recent actions.

Among other details, John provides his outlook on the expected signs hyperinflation is manifesting itself and what individuals can do to protect themselves against it.
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Blame the Victim

Monday, February 28, 2011, 7:29 PM

If we were to view Bernanke and the Fed Governors through a psycho-criminologist lens, they might best be described as an abuser that blames the victim.

How else to explain their recent proclamations that if any inflation is to be found in the world, the fault largely rests with the emerging markets' failure to control demand?

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Going, going, gone.

Tuesday, February 22, 2011, 11:21 PM

Well, that was quick. As you may have noticed, things are rapidly progressing from the outside in as the turmoil in the Middle East has now taken down two oil rich countries.

Dictator Loses Grip in Desert

On the ground in the eastern chunk of this oil-rich desert nation, the signs of rebellion are plain to see in the armories of a military base near Baida: Weapons crates lay busted open and empty. Rifles are missing from their racks. Left behind are helmets and gas masks and cleaning kits—things that can't shoot.

For four days, rebels newly armed with anti-aircraft guns and Kalashnikovs battled forces loyal to Libyan strongman Col. Moammar Gadhafi and commanded by one of his sons. After days of firefights, feints and an ambush on unarmed local sheiks, the regime forces surrendered their hold on the vital local airport Tuesday morning—placing nearly all of eastern Libya outside Col. Gadhafi's control.

The battle for Baida airport is one example of how quickly the tide across Libya has turned against Col. Gadhafi. A brutal crackdown by pro-Gadhafi forces across the country has left at least 300 dead over six days, civil-rights groups say.

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Silver Shortage Looming?

Tuesday, February 15, 2011, 1:22 PM

The silver market continues to send urgent signals that supplies are very tight, an often bullish condition sometimes associated with rapid price rises.

For those not up on the lingo of the futures market, there are two ways to describe the prices of commodities in the future as compared to today. One describes a condition where commodities cost more in the future than they do today, and it is rather non-intuitively termed contango. If a commodity is "in contango," it is priced higher for delivery in future months than it is for delivery today. Oil is an easy example, as it is nearly always in contango, and for perfectly intuitive reasons: There are carrying costs associated with storing oil (such as interest, storage fees and insurance) and those costs assure that future oil is almost always more expensive than present oil.

The other term describes the situation where the future price is less than today's price, a rare condition for practically every commodity, and it is called backwardation. A commodity that is "in backwardation" is priced lower for delivery in future months than it is for delivery today.

Silver is in backwardation and has been for a while now.

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Guide to Navigating the Coming Crisis

Wednesday, February 9, 2011, 3:50 PM

Guide to Navigating the Coming Crisis

Wednesday, February 9, 2011

Executive Summary

  • Here we provide a detailed summary of the complete analytical framework that has delivered double digit investment gains (2004-2010)
  • Why this 'recovery' is false
  • Why the Fed is stuck between a rock and hard place
  • Why the US Treasury market is vulnerable
  • Asia is the most likely trigger

Part I

If you have not yet read Part I, available free to all readers, please click here to read it first.

Part II - Guide to Navigating the Coming Crisis

Illuminating the future is our job, and we take it seriously.

The unfolding Egyptian situation provides a perfect analogy for what I see coming to the developed world. During times of massive change, it is most important to have a clear-eyed view, few limiting beliefs, and a reliable framework to help you decode rapidly emerging events.

What we do here at Martenson Central is deliver both up-to-the-minute information-scouting services and a framework through which those events and information can be interpreted. 

Knowing what is likely to happen and having a solid framework for understanding those events provides emotional relief, removes uncertainty, and allows for crisper and more effective decisionmaking that can make you safer and even wealthier. These benefits are not speculation on our part; they are directly drawn from comments and feedback we've received from our members over the past several years.

The Crash Course is the foundation of that framework, which illuminates the main predicament as an inherent conflict between the currently evolved types of economic and monetary systems and looming resource scarcity, especially of oil.


Wikileaks: US Officials Concerned Saudi Arabia Has Less Oil Than Claimed

Wednesday, February 9, 2011, 9:06 AM

There has been another Wikileaks release, exposing the US diplomatic channels as being aware of the possibility of Saudi overstatement of reserves and the possibility that future Saudi 'swing production' may be far more limited than believed.

Here's how the Guardian UK put it:

The US fears that Saudi Arabia, the world's largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show.

The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom's crude oil reserves may have been overstated by as much as 300bn barrels – nearly 40%.


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Playing With Fire

Friday, February 4, 2011, 6:33 PM

There were rolling blackouts and natural gas delivery failures in the southwest, long bonds broke to new multi-month lows (that is, yields are rising), and Bernanke claimed that the Fed's policies have nothing to do with global commodity price increases.

Those may sound like entirely unrelated events, but I see them as intimately connected. Here's how: » Read more


Bernanke: "Yes, We Have No Inflation"

Thursday, February 3, 2011, 6:23 PM

In the recent article on the party in stocks, this was one of my concluding paragraphs:

The bottom line is that by the time the Fed becomes institutionally aware that inflation is raging across the globe - and I often wonder when they'll finally awake to the threat - it will be too late. Inflation will have the momentum, and it will take a vast overreaction on the part of the Fed to restrain it. They'll have to drain enormous amounts of liquidity and tolerate vastly higher interest rates to be able to do that, and I doubt they have the courage for such bold action. I think they will hesitate, equivocate, and ultimately be late.

Perhaps sensitive to the growing awareness of inflation across the world and the Fed's role in fostering it, Bernanke took the opportunity today, while at the National Press Club, to minimize any such concerns. This is really quite a disturbing mindset on display:

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Information Scouting Report: Vol 1 (2-2-11)

Wednesday, February 2, 2011, 6:45 PM

We received a lot of great feedback from the content survey, and one idea that popped back into our field of view was for me to provide additional commentary on the wide range of articles that I run across when I do my daily scouting.

Here are the most interesting articles I've run across the past few days and why they caught my eye:

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"Let Them Eat Cake"

Friday, January 28, 2011, 10:19 AM

There are great moments in history, critical turning points that seemingly hang upon a single phrase. In response to news that the peasants had no bread, Marie Antoinette allegedly said "Qu'ils mangent de la brioche." (A brioche is a luxury bread enriched with eggs and butter).

At the time of the French Revolution in the late 1700's, the staple food of the peasants was bread, which absorbed 50% of their income, in contrast to fuel, which consumed only 5%. The obliviousness and selfishness of the ruling class sparked the violence that led to its downfall.

Fast forward to today, where food and fuel consume up to 50% of the income of people in developing nations, such as Tunisia and Egypt, as well as China and India. In an increasing number of these places, violence is breaking out, as the modern-day peasants grow increasingly restive at the burden of merely trying to stay fed.

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