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The elites warn of high inflation but refuse to get specific about what that means

Posted by John T. Reed on

“Does the Fed Have the Will to Fight Inflation?” is a WSJ op-ed today.
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The author, Jason de Sena Trennert, uses the phrase “financial repression.” First time in a long time I have seen that phrase. I have said that is one of the five bad laws that hyperinflated governments pass. The others are capital controls, price controls, rationing, and anti-hoarding laws.
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Financial repression means the government restricting to a low level how much interest can be paid on your money. We had it in 1975 and before. Banks were not allowed to pay interest on checking accounts. Banks could also only pay a low interest rate on savings accounts and savings and loan associations could pay 1% more. US savings bonds had below=market interest rates and federal employees and contractors were pressured to buy them.
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If the US dollar becomes hyperinflated, Americans will explode in a frenzy of spending, trying to get rid of all US dollars, trying to buy foreign currency, and so on. The five bad laws are required to prevent the American people from escaping the horrible effects of hyperinflation. If you fail to enact even one of them, that will become the one exit through which all holders of USD try to escape. .
Basically, hyperinflation is a monetarily “burning theater” from which you want to escape and the five bad laws are “locking all the exit doors” to keep you in.
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Why would the politicians do such a horrible thing? Because the alternative is to have the US government live within its means. That would require cutting federal spending by something in the neighborhood of 50%.
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Federal spending is social security, Medicare, federal pensions, federal salaries, federal unemployment, grants, student loans, buying military weapons and ammunition, operating the post office and Amtrak. Politicians will never to that. They tightly think you will blame them for that, but that you are dumb enough to believe the politicians when they blame the hyperinflation on suddenly greedy Exxon and Wal-Mart.
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Ultimately, the mater will be taken out of the hands of the American people and its politician “leaders.” Deadbeats and deadbeat nations have to pay cash and when the U.S. dollar is hyperinflated, US dollars are no longer cash.
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The op-ed answers its own question: no. The Fed does NOT have the will to fight inflation. High or hyperinflation is coming.
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The op-ed says NOTHING about what happens when the U.S. fiscal and monetary policies inevitably cause inflation, policies that President Obama said were not sustainable.
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This is on page 1 of my book How To Protect Your Life Savings From Hyperinflation & Depression, 2nd edition. I quote Herbert Stein’s (Ben’s father) Law: . “If something cannot go on forever, it will stop.”
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My book is about what happens when it stops and how to avoid being crushed by that. I am the only one I know of who answers that question. Trennert, as with everyone else in the WSJ and elsewhere, does not answer it. Like all the rest, he vaguely implies it is something very bad, but then stops talking about it. WSJ and all the others who refuse to talk about the consequences are more complicit with each passing day.
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See my book and my web article “The Day the Dollar Dies.”

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