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Hyperflation Via a Currency Crisis is Dead Ahead

This week’s podcast interview introduces a new monetary measurement developed by Alasdair Macleod: the ‘Fiat Quantity of Money’, or FMQ.

Alasdair explains how FMQ is derived, as well as what it can tell us about the true levels of fiat money supply. In the case of the dollar, it reveals that levels are far above what is commonly appreciated — so far, in fact, that a currency crisis could arrive sooner than even many dollar bears expect.

7 Comments on "Hyperflation Via a Currency Crisis is Dead Ahead"

  1. BillT on Mon, 28th Oct 2013 2:17 am 

    Correct. It could be caused by a phone call from China.

  2. Arthur on Mon, 28th Oct 2013 9:02 am 

    I have never understood why super inflation has not happened years ago as a result of all that money printing. Probably always underestimated the effect of the dollar being a reserve currency so inflation could be exported to and shared with the rest of the world. But as Bill says, one phone call from China to US financial authorities, passing the message that no new US debt will be bought, could trigger a run out of the dollar. And like a game of musical chairs, the last holder of the dollars will be the loser: first and foremost the average American citizen, who has no choice but to pay in dollar.

  3. Kurt on Mon, 28th Oct 2013 4:08 pm 

    Let me guess – he concludes that you should buy gold.

  4. steveo on Mon, 28th Oct 2013 4:44 pm 

    “They were tried, and if found guilty, there right hands were off and the testicles beneath”

    A perfect punishment for the perpetrators of the coming financial collapse, from the Fed chairmen (past and present) on down, including all three branches of government.

  5. J-Gav on Mon, 28th Oct 2013 11:33 pm 

    Not sure it’s ‘dead ahead’ (don’t know exactly what that means) but it’s certainly a possibility ‘down the road’ (and I admit I don’t know exactly what that means either …)

    I say this in answer to both Bill and Arthur: I don’t believe that Chinese banks’ loan structures have any more cred than America’s. Further, they have not yet developed sufficient internal or regional demand for them to do without the West for the time being (yes, I’m aware they’re working on it).

    Still, at this point in time, making that “phone call” would practically be tantamount to economic suicide and social disruption on a grand scale.

  6. BillT on Tue, 29th Oct 2013 1:37 am 

    J-Gav, if you were China, and you had to decide whether to go to war or take a financial hit, what would YOU do? That is the corner the US is backing China into. And China is not as dependent on the dollar or the US as you may think. A large portion of their trade is now in their own currency, bypassing the dollar. how long do you think the US can let that happen? After all, most of the countries now doing that are also nuclear countries.

  7. Arthur on Tue, 29th Oct 2013 7:19 am 

    J-Gav, it does not make sense for the Chinese to keep delivering goods for IOYs if they realize these do not represent real values. Any bartender will react the same. Some credit, yes, but not ad infinitum.

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