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John Williams - Solvency Crisis
As we continue to grind through this depression we are now seeing the stimulative effects evaporate. This is setting the stage for another leg down in an already weak economy. As the census jobs are eliminated and the economy tumbles we will see even higher unemployment numbers.
June 7, 2010
These notes were from John Williams today:
- 5.9% M3 Annual Decline Deepest Since Early-1930s Banking Crisis
- Post-World War II Record Drop in Inflation-Adjusted M3 Signals Intensifying Business Contraction
- Renewed Recession Will Set Stage for U.S. Solvency Crisis and Severe Inflation Threat
We are getting ready for another leg down in this depression and John correctly points out this will indeed set the stage for a US funding crisis. The assumption is that Bernanke and the Fed will continue to print to attempt to offset the forces of deflation. We are already seeing inflationary pockets developing in terms of pricing of certain products.
The question becomes as the Fed continues to print, is that the setup for massive inflation? States will need to be bailed out and that will come with a huge price tag as the US continues to keep the phony economy rolling. Pension commitments are absurd and unsustainable and we cannot continue to grow the roll of government workers and those dependent on the government.
John has warned repeatedly of a coming inflationary holocaust. Make sure you are protected by owning hard assets such as gold and silver.
Eric King
