Francis Schutte

The 1929 DJIA and the 2000 Nasdaq

Honestly, I think one must compare the present situation with the Weimar revolution in Germany and not with the 1920-30 situation. In those days, we did NOT have Fiat paper money like we had today. Hence the stock market continued to come down. According to our theory of "communicating financial vessels", the money has to go somewhere...and in those days the amount of money was limited because it was linked to GOLD. Today 'they' can create unlimited amounts of money..which end up seeping in the Stock markets. The Zimbabwe effect is kicking in! Having said this, we expect markets to go up only in 'Nominal Terms'.

Analysts Forget That Markets Always Climb a Wall of Worry

Deflation ALWAYS comes after Hyperinflation. There is no such thing as negative inflation, desinflation and stagflation. These terms only live in the minds of Politicians and talking heads. Hyperinflation is a monetary happening and has nothing to do with a potential recovery.


On Jul 27 05:25 AM aldous wrote:

> Hyper -Inflation??? Get real, deflation has not yet run its course
> and when it finally does, stagflation will be the end result. The
> US and Europe are on the canvas for the next 5 years. Recovery indeed!!
> If You live long enough you get to see just about everything.

Analysts Forget That Markets Always Climb a Wall of Worry

Well..exactly the same scenario will unfold as we had in Zimbabwe. People did not bother about high interest rates and bad earnings. They went into the stock market just to be out of fiat paper money: nothing less, nothing more!


On Jul 26 10:37 PM untrusting investor wrote:

> Sounds like wishful thinking to the nth degree. What's gonna happen
> when the Fed/Treasury and the bond markets are forced to drastically
> increase interest rates in order generate the massive debt issuance
> required. Looks like a replay of the 1970's to many of us.

U.S. Markets Extend Uptrend

What will be the heading the day the Dow hits 30,000 and higher?..overextended?

Why Marc Faber Is Wrong About the CPI

Monetary inflation always results in price inflation. The more monetary inflation, the more price inflation. Not 'all' prices go up. Prices of High Order Capital Goods (real estate) come down and those of Low Order Consumer Goods go up (Food and energy).
Whether interest rates are zero or 25% has nothing to do with the level of inflation.

U.S. Markets Soar on Consumer Confidence Data

The 'only' reason why stock markets soar, is because of the communicating financial vessels. Nothing more nothing less. All the rest is static. It exists because each day people want to explain why markets go up or down. By doing so, the emit moe static.
If you are a fund manager sitting on huge liquidities you know you have at a certain point no alternate but to invest these. As the Bond markets are sliding down, there are little alternates left.

Is the U.S. Ready to Shop Again?

I really don't understand how Consumers (which are overindebted) will be able to consume again. There is however one important factor which can push people to spent money again. And it is hyprinflation. At that point, people understand inflation is here to stay and they buy Goods to get rid of their worthless paper money.

Why Our Credit Crunch Mirrors the Weimar Hyperinflation from 1919-1923

Excellent article! You don't need to be an economist to see and understand what is happening and what to expect. Having said this, I suspect that Bernanke, Trichet and some politicians duly understand the situation and know what the result will be of their policies. [Keynes was employed by the british government and well paid to write a study justifying what government did in those days]. Today, politicians and their buddies (bankers) don't care about society and people. They only care about themselves. It is all about power and greed. And..this will go on until 'we the people stop it"!. History proofs it over and over again....

What Effect Will Hyperinflation Have?

Very interesting article. Correct is that what is about to happen will resemble to the Weimar revolution rather than to the Great Depression. One major difference is that at the time of the Great depression, the Dollar was backed by Gold but the German Mark not.
As far as the Dollar being a reserve currency, this will only make the drama bigger and ensure the hyperinflation is seen all over the Western World.

Amazing is that many readers (like BS) seem to have forgotten everything one was teached at school! We all had History...

Ever since the beginning of society, GOLD has been the ONLY REAL money on earth. Over and over again Politicans together with bankers have tried to convince the people FIAT PAPER MONEY was better and Gold was and is nothing more than a barbaric relic..Each time, REALITY have shown that this was a lie. This time won't be different.

I won't say History will repeat in exactly the same way as it did in the past. It never does. History is the same all over again...only each time it is a bit different.

The Reykjavik Scenario (or How Interest Rates Can't Control Monetary Inflation)

The action of volcker on the Money supply should also be commented.

The Reykjavik Scenario (or How Interest Rates Can't Control Monetary Inflation)

NOT true: But if the Iceland authorities now put rates high enough, they will kill the inflation stone cold dead. It won't!

Monetary inflation is the result of the creation of Fiat Money out of thin air. Monetary inflation ALWAYS results into a price inflation whatever the level of interest rates is...
History shows this over and over again: Weimar, Zimbabwe, the Civil war in the USA, the american independence,...Please make your home work and get a good history book.

The Reykjavik Scenario (or How Interest Rates Can't Control Monetary Inflation)

The latest figures of M1, M2 and M3 show an Increase rather than a decrease. There is NO massive decrease of M3. Authorities are in NO position to decrease the Money supply. On the contrary, they are now using the Deflation propaganda to continue to increase the total Money supply...

The Reykjavik Scenario (or How Interest Rates Can't Control Monetary Inflation)

At this time, in the USA the Velocity of money is falling. This is a normal phenomenon as people start to stop spending in expectation of falling prices. The day Velocity picks up again it will because people will realize Inflation is here to stay and will get worse. This action will lead us into hyperinflation.

Time To Sell This Bear Market Bounce?

It has been a while since I have seen so much negative sentiment about Gold and Gold shares. Think that many will be in for a huge surprise as we near the end of this year.

Oil, Gold and the Holy Dow

A different but similar situation existed in the 1920's-30's when Coal/Steam was exchanged for Oil/petrol engines. In those days, the problem currencies were the pound sterling and the Reichsmark (Weimar). It unfortunately lead to the Great Depression and WW II. Unfortunately, few people remember those days and history is not the strongest part of people living today.