Investment Rarities Incorporated
History |  Q & A  |  Endorsements  |  Portfolios  | Flatware | Gold Coins  |  Silver Coins  |  Contact |  Home


Jim Cook



Every once in a while I switch the TV channel from Fox to CNBC to see what the liberals are saying.  After listening awhile I get a deep sense of hopelessness and foreboding for our country.  The most important thing for the left is giving money to people.  They are happy to see the growth of food stamps, disability payments, housing subsidies, free healthcare and all the other welfare benefits.  They utterly fail to see the damage it is doing to the recipients.  Whole cities that once flourished have deteriorated into rotting eyesores populated with shambling hulks of chemically dependent drones.  These people are no longer employable.  They have become incompetent and helpless and the liberals can’t see that it’s their doing.

..Read More »

The Best of Jim Cook Archive

Best of John Williams
February 23, 2011
archive print

By Gold Report

John Williams, economist and editor of Shadowstats, was interviewed recently by the Gold Report.  Here’s his interesting economic outlook for 2011.

“Eventually, the continued economic decline will be recognized officially, but people will be talking about the second leg of a double-dip before it gets an official recognition.  I don’t see any economic growth ahead.  In fact, I see a pretty bad further contraction.  For instance, as bad as it’s been, if you look at housing starts, the housing market never really had any bounce-up from the stimulus (except maybe a little bit in the home sales numbers tied to the expiration of tax credits), and it’s actually started to turn meaningfully to the downside again.  That’s bad for the banking system.  It’s not good news for anyone.

“The problem is we have a solvency crisis and an economic crisis that are ongoing simultaneously.  Short-term credit to consumers and business from banks is still declining, both month-to-month and year-to-year. That’s a sign of a banking system in trouble.  In the last five or six months, there may have been a bit of an uptick in M3, but it looks like that’s turning down again.  That’s another sign of an unhealthy banking system.

“Weaker-than-expected economic activity not only will intensify this systemic solvency crisis, but also has all sorts of other implications.  It will increase the federal budget deficit, with a lot more spending than people have been anticipating.  At the end of the year, for instance, we saw some of this in more bailouts for the unemployed.  Going forward, we easily could see some potential failures in a number of states and municipalities that are in serious trouble.  I suspect that the Fed and the Treasury will continue to create whatever money they have to spend to prevent a systemic collapse, but the process builds up inflation, and we’re already beginning to see that. . .

“The ultimate result here is the government printing money to meet its obligations.  The Fed is effectively funding the government’s borrowing.  But as the economy continues to weaken, as the deficit worsens, as the Treasury funding needs increase, quantitative easing and monetization of U.S. Treasuries will have to increase.  We’re going to see more and more foreign holders of dollars sell their dollars.  I think there’s high risk in the next year of panicked sell-off, a panicked dumping of USD-denominated paper assets.  All of that will cause the Fed to continue to flood the system with liquidity, to buy up unwanted Treasury debt and stimulate inflation.  As people increasingly don’t want to hold the currency because of the inflation, we’ll start to see higher inflation that quickly can evolve into hyperinflation. . .

“We could see hyperinflation breaking in the next year or two.  I put an outside date on it of 2014.  I’m talking about a hyperinflation in which the USD becomes virtually worthless, which means all kinds of unstable markets, unstable times politically over the long haul.”