Mailbox - Weimar Republic

Outside of MOPE the so called recovery was a putrid reaction to all the funds injected. The US rescue plan was focused on Wall Street. The Chinese rescue program was focused on Chinese non financial business. One flopped while the other had an impact. China also unloaded on Goldman today at a spiritual level today calling a spade, a spade.

Our can not do without Shadow Stats by paid subscription speaks again.
- 5.9% M3 Annual Decline Deepest Since Early-1930s Banking Crisis
- Post-World War II Record Drop in Inflation-Adjusted M3 Signals Intensifying Business Contraction
- Renewed Recession Will Set Stage for U.S. Solvency Crisis and Severe Inflation Threat

Jim

The red highlighted text is criticial.

Renewed recession will set stage for U.S. solvency crisis and servere inflation threat.

It will be the solvency crisis that will lead to further, aggressive fiat devaluation. This is why the price of gold is rising rather than falling on the perception that the economy will slip into a double dip recession. Capital flows are heading into the safety of gold, and eventually into the fractional ownership of real assets (i.e. the stock market), because confidence in the exisiting fiat system is deteriorating.

The Weimar Republic model provides a glimpse of what is likely to come. Up gold, up stocks but much less than gold, and panic paper money and the debt it denominates.

Weimar Republic (1919-1933) Hyperinflation: German Stock Index and German Stock Index to Gold Ratio 1925-1935


Weimar Republic (1919-1933) Hyperinflation: German Stock Index and German Stock Index to Gold Ratio 1925-1935