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John Williams continues:
“The earlier all-time high of $850.00 of January 21, 1980 would be $2,391 per troy ounce, based on November 2010 CPI-U-adjusted dollars, and would be $7,840 per troy ounce in terms of SGS-Alternate-CPI-adjusted dollars.
In like manner, the all-time high price for silver in January 1980 of $49.45 per troy ounce has not been hit since, including in terms of inflation-adjusted dollars. Based on November 2010 CPI-U inflation, the 1980 silver price peak would be $139 per troy ounce and would be $456 per troy ounce in terms of SGS-Alternate-CPI-adjusted dollars.
Real Money Supply M3: The signal of the still unfolding double-dip recession, based on annual contraction in the real (inflation-adjusted) broad money supply (M3), continues and is graphed (above). Based on today’s CPI-U report and the latest estimate on the November SGS-Ongoing M3 Estimate, that annual contraction in November 2010 was 4.0%, narrower than October’s 4.5% contraction, and May’s post-World War II record annual decline of 7.9%.
The signal for a downturn or an intensified downturn is generated when annual growth in real M3 first turns negative in a given cycle; the signal is not dependent on the depth of the downturn or its duration. The current downturn signal was generated in December 2009. The broad economy tends to follow in downturn or renewed deterioration roughly six to nine months after the signal, as has appeared to have started in recent months, with flat-to-down nonfarm payrolls, flattening industrial production, and renewed contraction in the already severely-constrained real estate market. New weakness in a number of series should become evident as annual numbers get locked-in and concurrent seasonally-adjusted series get fully published with updated as "revised" data. Such eventually will lead to recognition of a double-dip recession.
Broad Economic, Inflation, Systemic and Market Outlooks Have Not Changed. Reflected in monthly retail sales and PPI reporting, but not yet in CPI reporting, consumer inflation is on the rise. Mr. Bernanke’s efforts at debasing the U.S. dollar and stimulating inflation have met with some success, already, in terms of a weaker U.S. currency and related increases in dollar-denominated commodity prices, particularly oil.
Currency values and precious metals prices can be volatile, but the long-term weakness in the U.S. dollar and relative purchasing-power-preservation attributes of gold and silver, and the stronger currencies outside the dollar, remain in place. As with systemic risks in the United States, risks in other areas of the world — such as among the countries using the euro — likely will be addressed by the spending or creation of whatever money is needed (indications of any needed U.S. backing are in place) in order to prevent systemic failure. Keep in mind that the U.S. remains the proverbial elephant in the bathtub in terms of pending effective sovereign bankruptcies.
The various European crises remain an intermittent foil for the U.S. dollar, pulling market attention away from the unfolding solvency crisis in the United States and a likely move to massive selling against the U.S. currency. Accordingly, high risk of the early stages of a hyperinflation beginning to unfold by mid-2011 continues.
Rising inflation should become increasingly broad, reflecting an increasingly serious problem in the first-half of 2011.”
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John Williams - Massive Selling of US Currency Lies Ahead
John Williams today was dispatching information regarding gold, silver, M3, nearby massive selling of dollars and inflation. Here is a portion from his commentary, “Despite November 9th’s historic high gold price of $1,421.00 per troy ounce (London afternoon fix) and the multi-decade high silver price of $30.50 per troy ounce (London fix) on December 7th, gold and silver prices have yet to approach their historic high levels, adjusted for inflation.”
December 15, 2010
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