Tuesday, July 27, 2010

Hyperinflation, "Gush Up" Economics, and "Conflict-Free" Gold

  • "Each big inflation – whether the early 1920s in Germany, or the Korean and Vietnam wars in the US – starts with a passive expansion of the quantity money," explains Ambrose Evans-Pritchard — The Death of Paper Money. "This sits inert for a surprisingly long time," he continues. "Asset prices may go up, but latent price inflation is disguised.... People’s willingness to hold money can change suddenly for a 'psychological and spontaneous reason,' causing a spike in the velocity of money. It can occur at lightning speed, over a few weeks. The shift invariably catches economists by surprise."

  • "This had nothing to do with the so-called 'Trickle Down' theory," says Gerald Celente: "This was 'Gush Up'" — Let Them Eat Losses. "In Bush/Obama economics, the richest and biggest that had lost billions through bad investments, or were in danger of going bust, had to be rescued." he explains. "If the Über-Rich weren’t saved, there would be nothing left to trickle down to the population below. By government decree, those taxpayers who had never felt any trickle to begin with, now had to finance the failed financiers.

  • Robert Wenzel reports on a bill that "contains a provision that requires companies buying gold and other minerals to submit an annual report outlining what they are doing to ensure their minerals are 'conflict-free'" — Dodd-Frank Bill Contains Provision that May Lead to Tracking of All Gold Coins. "The concept of conflict-free began with diamonds mined in a war zone and sold to finance an insurgency, invading army's war efforts, or a warlord's activity," he explains. "The idea being that the purchase of diamonds from such war zones should be illegal, ostensibly to stop the financing of the wars. It is believed by observers of the diamond industry, such as Edward J. Epstein, that DeBeers was behind the idea of conflict-free diamonds as a way to limit the supply of diamonds that come on the market. Nevertheless the concept took hold."

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