Bail-Ins, Bonds Bursting and Hyperinflation… Three MEGAS
Jun 14, 2013
“The implicit assumption behind that siren call must be that the inflation rate can be manipulated to reach economic objectives. Up today, maybe a little more tomorrow and then pulled back on command. Good luck with that. All experience demonstrates that inflation, when fairly and deliberately started, is hard to control and reverse.”
Paul Volcker, Former Fed Chairman, June, 2013
Indeed! The St. Louis Fed’s adjusted Monetary base shot up from $800 Billion in 2009 to $3.2 Trillion in June 2013.
A Wise Deepcaster Subscriber correctly noted regarding:
“…The St. Louis Federal Reserve Bank estimate of the total Quantity of US dollars in circulation and in banks as reserves…
“This number appears to me to be similar to the old M3, which the Fed stopped publishing in 2005. John Williams at www.shadowstats.com continues to estimate M3.
“The huge and sudden increase of money supply [M] – far in excess of goods and services being produced – in monetary inflation. If the public should catch on to this potential for devaluing the value of their dollars, they will start to spend very fast, while the money is still worth something.
“When the velocity of money changing hands [V] increases, we will see sudden price inflation. M x V = PRICES.”
And as Shadowstats correctly notes, Real Inflation in the USA is Already a Threshold Hyperinflationary 8.7%. Witness MEGA #1.
And if you are in a deeply indebted Country in the Developed or Developing World, there is now a probability that your Bank Deposits will be confiscated. First Cyprus. Now Japan. Tomorrow (Your Country?) Witness MEGA #2
“Japan to adopt ‘bail-ins’ force bank losses on investors if needed, Nikkei says Tue, Jun 11, 2013 2:19 PM EDT
“Japan’s Financial Services Agency will enact new rules that will force failed bank losses on investors, if needed, via a mechanism known as a ‘bail-in’ according to Nikkei. Mitsubishi UFJ (MTU), Mizuho Financial (MFG) and Sumitomo Mitsui (SMFG) are among those proposing amendments to allow them to issue the types of preferred shares or subordinated bonds that would be used in such cases, the report noted.”