Williams On Hyperinflation

Williams reverse-engineers the GDP, employment and inflation data for more accurate readings. He backs out manipulative changes to produce more valid figures. Take the 5.5% May unemployment rate for example. BLS calculates it on persons who looked for work in the last 30 days. Williams adds those who want to work but gave up in frustration plus people working part-time who want (but can't find) full-time jobs. Result: real unemployment of over 12%.

M3 (the broadest money supply measure) growth is so high that the Fed no longer reports it. Economists like Williams do because it's crucial to know, and the data he reveals are disturbing - record M3 growth at a near 18% annual pace. Hyperinflationary seeds are now sown. Dollar valuation is falling, and at some point may accelerate when investors flee it for safer havens. The Fed again will respond. More debt will be monetized. It will build over time. Things will get worse and then be exacerbated when the government is less able to meet its obligations. "Therein lies the ultimate basis for the pending hyperinflation," in Williams' judgment.




Things are so out of hand, Williams sees "no way of avoiding a financial Armageddon." We're nearly or already bankrupt; are creating money to cover our obligations; the more we print, the more we need; it's fiat currency unbacked by gold; and every new dollar created dilutes the value of all others in circulation. Double the money supply, and presto - every dollar is worth 50 cents. Double it again, and you get the point. We've been doing it for decades, especially since Nixon closed the gold window in 1971.

At some point, the music stops, the dollar collapses, it becomes worthless paper, and related dollar-demoninated paper assets go down with it. Williams quotes a law professor who experienced Weimar Germany's hyperinflation first hand. It was the worst by far ever recorded. "It was horrible. Horrible! Like lightening it struck. No one was prepared." Shelves in grocery stores emptied. "You could buy nothing with your paper money." At the trough in 1923, the mark plunged to an astonishing 4,200,000,000,000 to the dollar.