Inflation: It Could Eat You For Lunch
- Washington's $6 trillion bailout…
- The Federal Reserve's decision to cut interest rates to essentially zero, and…
- The cranking up of the printing presses by the U.S. Treasury that had to find a way to pay for it all.
As the Treasury prints boatloads more money,the value of the U.S. dollar is going to go down and the price of most everything you can think of is going to go up!Inflation is likely to hit 10% by the end of 2010 and perhaps as high as 15% or even 25% by 2012! Its effect on the stock market and upon your life will be profound.Why are my figures so much higher than other well-known economists? Because they don't like to write about things that tie their stomachs in knots, and for which they have no solutions. I've got answers, so I'm not intimidated by the major inflationary factors that-even if they're only half as bad as my projections -- are about to wreck havoc with our economy.Here's why imminent inflation will be every bit as painful, if not worse than that of the 1970s:
- 1. We're now playing on a much bigger world stage. The two billion, increasingly-affluent people of India, China, and other Eastern and Middle Eastern nations are now competing with us for the commodities needed to support their middle-class lifestyle.2. We're squandering billions of our capital on a rapidly diminishing supply of increasingly-more-expensive fossil fuel … and the world is running out of cheap oil, as well as a dozen critical metals. And don't kid yourself, alternative energies are not going to replace fossil fuel soon enough to save us.3. Our balance of trade is out of control and about to catch up with us. The Chinese especially are tired of using their trade surplus to buy ever-bigger stacks of U.S. T-bonds. That game cannot go on forever. When the dollar gets weak enough, the Arabs and others will stop using it as the world's reserve currency. The Russians are already lobbying for a switch. That would put us on the outside of the world's economic system, looking in.4. Our very expensive standard of living makes it impossible for U.S. manufacturers to compete with many of our trading partners. I mean, who would ever have thought that General Motors, an American icon, would go belly up? It's not just the unions either. An overpaid bureaucracy, a legion of lawyers and millionaire CEOs have all been feasting at the consumer's expense.5. Americans are now way over their heads in debt. The equity in their homes has suddenly vanished. Tens of millions of home owners are watching the American dream turn into a nightmare. We've been saving less than 1% of our income and we have $11 Trillion in personal debt. Meanwhile, Indian families save a governmen-aided 28% a year and Chinese families, 42%. They might wind up owning the joint.6. Global warming-real or not-along with healthcare, will continue to consume every spare cent in the national budget.------------------------------------------------------------------------