"I'm afraid that we have lost him" is getting to be a pretty regular phrase in the TV news world lately, I'm afraid. And Peter Schiff isn't the only knowledgeable expert that has suffered the same fate recently either. My guess is that the powers that be are hiding some of the truth about our economy and that they don't like it when someone gets a little too close to the truth. Peter blamed the Federal Reserve for their over-easing of credit in 2001-2002, and most likely was heading in the direction of discussing the problems associated with vastly expanding the money supply from 2003 to today. When our government quit reporting the growth of M3, who would have guessed that abuse in money-supply growth was ripe to follow? While there have been others who have publicly questioned the out-of-control growth of our money supply and its effect on inflation, Peter Schiff is well-followed. This wasn't the first time that a well-followed economic commentator was cut-off right when they were getting to the juicy details about the increase in the money supply and its economic effect when unsupported by growth.
Has anyone noticed that silver is up over 33% in value since November? In fact, it is already up around 4% today, even though the Euro has continued its slide against our Dollar, while the British Pound has staved-off further collapse for now. And today 4th quarter GDP growth was -4%, which is as bad as the 1982 Recession, and a full 8% away from a healthy GDP growth rate. Caterpillar today announced 21,100 layoffs to go with the worst month for loss of employment in 26 years. So far in January nearly 2 million people have lost their jobs here in the US which won't help consumer spending and GDP growth numbers any time soon. Without GDP growth to balance our rapid growth in our money supply, estimated by some lately at 8% to 10% growth per month, it is a certainty that our currency will devalue and inflation will surge. Without the free credit that drove our GDP growth during the middle part of the Bush Presidency, we will have hell to pay, either through rampant inflation as the money supply devalues, or through a rapid hike in interest rates in an attempt to stave-off currency devaluation, which will also quickly reign-in any growth.
Stay tuned, because the next quarterly reports could be devastating with millions of lost jobs and mass homelessness caused in part by the revision of the bankruptcy laws under President Bush. Years ago you could file bankruptcy and keep your house. Not so anymore, unless you meet a stringent set of conditions including an income level well below the average for your community. Just in our little local weekly newspaper last Wednesday, there were five full pages of foreclosure notices, to go with 4 pages in the last paper, and an average of 3 pages since last Summer. An estimated $2 trillion of retirement account valuation was wiped-out just in October and November here, and as yet there has been no estimate that I have heard in loss of home equity valuation nationwide since last Summer, but I am sure that it is in the multi-$trillions. With all of these equity losses and credit restrictions there just isn't any venture capital to grow with.
So look for consumer prices to continue to move higher while several other major retailers fail and incomes stagnate or even drop, while home values and stock prices continue to fall, as more and more people are laid-off, lose their houses, and are forced to cash-out severely value-depleted retirement accounts for current living expenses. If you haven't done so already, I would start looking at precious metals and other futures as a hedge against inflation. And watch for more economic experts to get cut-off when they try to reveal the truth about the growth of our money supply.
How much is yearly debt service on $13 Trillion and how will that number continue to affect us in an era of considerable loss of GDP? Our new President expects yearly deficits of $1 trillion of more to continue for some time. Wait until property taxes exceed your mortgage payments and a loaf of bread runs hundreds of Dollars.
Maybe now would be a good time to buy a good wheelbarrow and consider downsizing in real estate assets.
Go silver!!! $50 per ounce by December, 2010!!! (Which would be less than a 400% increase in value).
"We stay here, we die here. We've got to keep moving". Trucker Mark