Rizal Philippines
January 20, 2015
Now that many stocks and Dow Jones is retreating (or free fall) many are thinking that US economy could collapse by Feb 19, 2016. This is being triggered by the 2008 collapse and the reforms have not been installed. The AIIB is challenging the US dollar and even the China malaise that is dragging the dollar and markets around the world down.
Shocking News from Agora Financial
From Business Insider - Hyper inflation - could it happen here?
I did not read this the moment this email marketing came into may inbox but because the headline was catchy, I tried to read this. The headline said that this hoax could be far worse (525 x) worse than the Enron meltdown. A retiree, a millionaire saw his $1.3 retirement nest egg just become $13,000 in a matter of week. Much worse, other stakeholders lost tons of money, and 20,000 became jobless.
A govt company which is 2x more leveraged (77x vs Enron 35x) could collapse anytime that will trigger hyper inflation and untold of poverty in USA. This refers to Federal Reserve Bank.
How did it happen? Well, in the Financial Crisis of 2008, the Federal Reserve Bank bought the assets of too big to fail banks. They bought the subprime assets of the bank that triggered the run. And then the QE (Quantitative Easing) - the Fed bought monthly hundred of billions of banks bonds and other debt instruments. The said venerable bank is no longer venerable. It could go bust anytime. This is what Paul Rand, a Presidential candidate comment on the FED:
If the Federal Reserve was a real bank, without extraordinary powers, it would be insolvent. The Fed has $4.5 trillion in liabilities and only $57 billion in equity. It is leveraged at 80:1, nearly three times greater than Lehman Brothers when it failed.”
The extraordinary power of the Fed is its ability to print money. The trouble is when it does it makes matter worse. Hyperinflation happen. It happens to 3rd world country like Zimbabwe.
where hyperinflation reached several digits. But it also happened in Germany in the 1900 when the money was used to start fire, or you had to bring money in wheel borrow in order to buy bread.
where hyperinflation reached several digits. But it also happened in Germany in the 1900 when the money was used to start fire, or you had to bring money in wheel borrow in order to buy bread.
What is the solution: invest in hard assets like gold, fuel, or goods that you will use. Bank assets will be useless later on when there is hyper inflation
