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Wall Street Journal is whispering ‘Fire’ in a crowded theater that IS on fire regarding inflation

Posted by John T. Reed on

I have mentioned before that the Wall Street Journal seems lately to be running a subtle campaign to QUIETLY warn against inflation. I think, like a lot of others knowledgeable enough to recognize the danger, The Journal wants to get on the record having warned readers about the risk of hyperinflation.

If and when we get hyperinflation, it will likely be worse than the Depression, still the most traumatic financial event in US history and one of the most traumatic financial political events in North American and European history. Arguably, the Depression led to the rise of Hitler and Mussolini and clearly led to the New Deal and put the US on our current road toward socialism and federal government bankruptcy.

In a depression (deflation), money [that any seller will take] is hard to come by. In hyperinflation (inflation), it is illegal to possess.
As a practical matter, what will happen is that you will have to barter for food and having disposed of three estates, I can tell you that we were able to get cash for guns and cars, and silver and gold coins and jewelry. NOTHING ELSE ACCUMULATED BY THE DECEASED IN QUESTION IN 70 OR MORE YEARS OF LIFE WAS OF INTEREST TO ANYONE WILLING TO PAY CASH FOR IT. 
So after you sell your guns and cars and gold and silver, you will starve. Not the poor people. YOU.
The main book I read about hyperinflation in Germany Austria was a diary by Anna Eisenmenger of Vienna. (Blockade—you can get it for free on the net. I think it is out of copyright.) She was a rich wife of a doctor who was head of the department at his hospital and lived in a townhouse in an expensive neighborhood.
The house served her well. But if I recall correctly, she was growing chickens and rabbits in the basement at the end to avoid starvation. And I think her daughter and sister did die of starvation in the house during the hyperinflation.

A supreme court decision famously said an exception to the First Amendment prohibition against abridgement of speech was you could not yell “Fire” in a crowded theater if there was no fire.

I accuse the Journal and other knowledgeable people of whispering “Fire” in a crowded theater that is on fire when it comes to the danger of runaway federal deficit spending destroying the value of all U.S. dollar-denominated assets worldwide.

True, today’s installment in this whispering campaign to get themselves on the record is on the front page, albeit below the fold.

But they never use the word “hyperinflation.” Notwithstanding our First Amendment, “hyperinflation” is now a banned word. If you dare speak it, you are cancelled as a tin-foil-hat-wearing, insane, racist.

Google the title “Inflation Risk: Little Now, But Some See Danger Ahead” to read it. The author is columnist Greg Ip. His columns are not usually on the front page. So, again, thanks for “escalating” this a little.

They quote Larry Summers as saying, “the risk of inflation expectations shifting dramatically to a disorderly fall in the dollar, is at its highest since the 1970s.”

That is called dancing around the word “hyperinflation” without saying it.

The highest annual inflation rate in the 1970s was 11.3% in 1979. It hit the peak of 13.5% in 1980. I lived through that as a Harvard MBA student from 1975-7 then I moved to California.

Is this article worth reading for the elucidation? Nah. It is MEGO. The fact that is a front page inflation warning on the WSJ is the basic idea.

The article says the Fed is “laser focused” on not letting inflation rise above 3%. Is that comforting? No. It is meaningless. Talk is cheap.

3% inflation is okay? President Nixon imposed unconstitutional wage and price controls on the nation in 1971 because of extremely high inflation. What was the average inflation rate for 1971? 4.4%.

Nixon’s job as a Navy officer in WW II was to work in the price control office. He knew better than to believe such controls works.

In 1971, my wife was detailed from the FDIC to the Nixon Wage and Price Commission. She was one of the people who decided which of the countless requests for exemption to grant.

The article ends with Fed Chair Jerome Powell saying, “Inflation dynamics do change over time, but they do not change on a dime.”

That’s a damned lie. . The first sentence in my book How to Protect Your Life Savings From Hyperinflation & Depression is “It could happen tomorrow.”

Here is a quote from the back cover of my book:

“It was horrible. Horrible! Like lightning it struck. No one was prepared. You cannot imagine the rapidity...” Friedrich Kessler, German hyperinflation survivor.

I have an article title “The Day the Dollar Dies” on the Web. It describes what the “not turning on a dime” will feel like in 2021. 

Readers of this wall who lived through hyperinflation in Eastern Europe when the Soviet Union collapsed or Latin American hyperinflation more recently commented that “The Day the Dollar Dies” was spot on.
How To Protect Your Life Savings From Hyperinflation & Depression 2nd edition

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