We're Screwed!

Free Your Inner Yankee Philip Maymin Best Price: $11.78 Buy New $11.84 (as of 12:00 EST - Details)

Do you believe everything the government tells you? Economist and statistician John Williams sure doesn’t. Williams, who has consulted for individuals and Fortune 500 companies, now uncovers the truth behind the U.S. government’s economic numbers on his Web site at ShadowStats.com. Williams says, over the last several decades, the feds have been infusing their data with optimistic biases to make the economy seem far rosier than it really is. His site reruns the numbers using the original methodology. What he found was not good.

Maymin: So we are technically bankrupt?

Williams: Yes, and when countries are in that state, what they usually do is rev up the printing presses and print the money they need to meet their obligations. And that creates inflation, hyperinflation, and makes the currency worthless.

Obama says America will go bankrupt if Congress doesn’t pass the health care bill.

How to Survive the End... James Wesley Rawles Best Price: $1.51 Buy New $6.95 (as of 07:10 EST - Details)

Well, it’s going to go bankrupt if they do pass the health care bill, too, but at least he’s thinking about it. He talks about it publicly, which is one thing prior administrations refused to do. Give him credit for that. But what he’s setting up with this health care system will just accelerate the process.

Where are we right now?

In terms of the GDP, we are about halfway to depression level. If you look at retail sales, industrial production, we are already well into depressionary. If you look at things such as the housing industry, the new orders for durable goods we are in Great Depression territory. If we have hyperinflation, which I see coming not too far down the road, that would be so disruptive to our system that it would result in the cessation of many levels of normal economic commerce, and that would throw us into a great depression, and one worse than was seen in the 1930s.

The Modern Survival Ma... Fernando "Ferfal" Aguirre Best Price: $11.24 Buy New $12.23 (as of 10:10 EST - Details) What kind of hyperinflation are we talking about?

I am talking something like you saw with the Weimar Republic of the 1930s. There the currency became worthless enough that people used it actually as toilet paper or wallpaper. You could go to a fine restaurant and have an expensive dinner and order an expensive bottle of wine. The next morning that empty bottle of wine is worth more as scrap glass than it had been the night before filled with expensive wine.

The End of Money and t... Thomas Greco Jr. Best Price: $3.20 Buy New $16.95 (as of 01:20 EST - Details)

We just saw an extreme example in Zimbabwe. … Probably the most extreme hyperinflation that anyone has ever seen. At the same time, you still had a functioning, albeit troubled, Zimbabwe economy. How could that be? They had a workable backup system of a black market in U.S. dollars. We don’t have a backup system of anything. Our system, with its heavy dependence on electronic currency, in a hyperinflation would not do well. It would probably cease to function very quickly. You could have disruptions in supply chains to food stores. The economy would devolve into something like a barter system until they came up with a replacement global currency.

What can we do to avoid hyperinflation? What if we just shut down the Fed or something like that?

We can’t. The actions have already been taken to put us in it. It’s beyond control. The government does put out financial statements usually in December using generally accepted accounting principles, where unfunded liabilities like Medicare and Social Security are included in the same way as corporations account for their employee pension liabilities. And in 2008, for example, the one-year deficit was $5.1 trillion dollars. And that’s instead of the $450 billion, plus or minus, that was officially reported.

Read the rest of the article

December 25, 2009