Eric Janszen: We Are Witnessing The Death of the Dollar (interview by Chris Martenson)

[jakeXT]

Run time: 43:47 https://www.youtube.com/watch?v=BGdMPNwvVjk   Posted on YouTube: October 28, 2011 By YouTube Member: ChrisMartensondotcom Views on YouTube: 4998   Posted on DU: November 06, 2011 By DU Member: jakeXT Views on DU: 1396

 
What do you get when the producer of the world's reserve currency takes on too much debt? Nothing less than the end of the US Treasury-based monetary system.

So says Eric Jansen, economic and financial market analyst and proprietor of iTulip.com. In chronicalling the decline of the global economy over the past decade, Eric has formulated a framework called the "Ka-POOM" theory which endeavors to understand how the immense run-up in global debt will be resolved.

In short, it looks at the at the credit bubble that began in the early 1980's, started accelerating in 1995, and has now reached epic proportions. The amounts are so staggering at this stage that Eric believes it is too politically undesirable to let natural market adjustments clear them away - the magnitude of the deflationary pain this would create is simply unacceptable for politicians looking to get re-elected. The only other available option left is to service these debts via a dramatically devalued currency. Hence the key role the Fed is playing today.

[Kurmudgeon]

1. Wheelbarrows will be handy

[jakeXT]

2. We'll see what happens

Moderate inflation need not develop into a high inflation and then into a hyperinflation. At any point, any government can take steps to end an inflation; the question is, at what political cost? Depending on how far the inflation process has developed, and how much political trouble the government is in, ending inflation can be accomplished by a combination of two steps: one, pegging the currency to a nominal anchor, such as another more stable currency or to a fixed asset, such as land or gold, and, two, addressing the primary cause of all hyperinflations: fiscal mismanagement. In addition to the currency losing its nominal moorings and loss of fiscal discipline, the third root cause of hyperinflation is foreign debt, but this may be wiped out by the inflation itself even before hyperinflation sets in.
http://www.itulip.com/forums/showthread.php/4023-Is-hyperinflation-possible