Hyperinflation and Gold’s parabolic rise
Written October 27th, 2013 by Egon von Greyerz
There is a ridiculous amount of time spent on what the Fed will do or won’t do or analysing the latest economic figures. Very few people use their own brain to figure out the obvious. And the obvious is that debt which has been growing exponentially in the last 40 years, started its parabolic phase in 2006 when Bernanke became chairman of the Fed. So we don’t have to ask what central banks will do. Because it is guaranteed that they will soon start unlimited money printing to complete the debt parabola.
That means we are now starting the hyperinflationary phase in the USA and many other countries. And this will all start in 2014. What will be the trigger? The answer is simple – the fall of the US dollar.
Hyperinflation is a currency event.
It does not arise as a result of increase in demand but as the inevitable consequence of a collapsing currency. When a country for an extended period lives above its means and prints money which it can never pay back, the rest of the world will punish the country and its currency. It took the US over 200 years to reach a debt of US$8 trillion. Since Bernanke became chairman of the Fed in 2006, US debt has more than doubled to $17 trillion. That is an incredible ‘achievement’ and the beginning of the parabolic rise of US debt not by tens of trillions but by 100 of trillions of dollars. This is no different to the Weimar Republic or Zimbabwe and a completely natural consequence of what is happening now.
The Euro which is a rubbish currency is up 8% against the dollar since July and over 65% since 2000. So even against another weak currency, the dollar is losing ground rapidly. And in real terms which of course is gold, the dollar has lost 98% since the creation of the Fed in 1913.
Jim Sinclair’s Commentary
Feels like we are back in business.
Jim Sinclair’s Commentary
Here is a very simple plan. Do not pay the retirees and therefore narrow the retirement budget.
Bank of Ireland Reaches Accord to Narrow Pension Deficit
By Joe Brennan – Oct 23, 2013 9:19 AM ET
Bank of Ireland Plc said its pension deficit will narrow by an initial 400 million euros ($550 million) under a plan to cut employee retirement benefits, in an accord that eases the way for the nation’s largest lender to repay part of its state bailout.
The deal, supported by the bank’s biggest labor union, centers on how future pay increases are treated for pension purposes, the Dublin-based bank said in a statement today. Should workers back the changes, the bank will then inject an additional 400 million euros into the pension plan over time, according to a person with knowledge of the matter, who asked not to be named as the proposal isn’t public.
Narrowing the bank’s 1 billion-euro pension deficit would lower the capital it needs to raise to refinance 1.8 billion euros of state-owned preferred shares. Bank of Ireland (BKIR) Chief Executive Officer Richie Boucher is weighing options, including a share sale, to repay the government by the end of March. If the shares are not redeemed by then, the amount owed rises 25 percent.
“Dealing with the pension deficit is crucial from a capital perspective,” said Emer Lang, an analyst at Dublin-based securities firm Davy, pointing to incoming banking rules that will deduct pension deficits from regulatory capital from 2019.
If Obamacare fails, taxpayers get to bail out the insurers
By DAVID FREDDOSO | OCTOBER 26, 2013 AT 8:54 AM
All the money for reinsurance and risk adjustment comes from insurers, but the risk corridor is…
Obamacare’s federal website is a mess, creating massive obstacles to enrollment in the law’s health insurance exchange plans. Those taking President Obama’s advice to apply by phone or by mail will fare little better, as their information must still be fed through the same glitchy computer system that is holding up everyone else.
The website isn’t the only problem, as things are only slightly better in the states that run their own websites. In Kentucky, less than 20 percent of the newly insured (or 4,832) have actually purchased plans – the rest will enter the taxpayer-funded Medicaid program.
In Maryland, exchange enrollment (3,186 as of Oct. 25) is a tiny fraction of new Medicaid enrollment (more than 80,000). Worse, the Free State’s exchange lost steam in week three, selling about 33 percent fewer plans than it had in week two.
On Oct. 23, someone discovered a possible reason for Washington State’s extraordinary enrollment rate up to that point. A computer error caused applicants to be told (wrongly) that they would pay little or nothing for their new coverage. The state must now go back and give thousands of enrollees the bad news – and convince them to re-enroll.
As of Oct. 25, exchange-plan enrollments across the country were well short of goals, threatening the whole program’s viability. The signs of the predicted train-wreck are there – but if the devastating collision occurs, what then?