John Williams of Shadowstats on potential hyperinflation

 

We've met John Williams in these pages many times before, albeit indirectly.  He runs Shadowstats, which calculates official economic statistics according to traditional norms rather than the politically-correctified mumbo-jumbo so beloved of bureaucrats and their political masters.  He's long pointed out that the official inflation rate grossly undercalculates the actual rise in prices "on the street".

In a recent interview with USAWatchdog, he looked at current economic developments with his usual incisive analysis.  Bold, underlined text is my emphasis.

Economist John Williams, founder of ShadowStats.com, says the Federal Reserve has painted itself into such a tight corner with the economy it really has only two choices.  Williams says it comes down to “Inflation or Implosion.” What would happen to the financial system if the Fed stopped printing massive amounts of money for stimulus and debt service?  Williams explains, “You could see financial implosion by preventing liquidity being put into the system.  The system needs liquidity (freshly created dollars) to function. Without that liquidity, you would see more of an economic implosion than you have already seen.  In fact, I will contend that the headline pandemic numbers have actually been a lot worse than they have been reporting.  It also means we are not recovering quite as quickly.  The Fed needs to keep the banking system afloat.  They want to keep the economy afloat.  All that requires a tremendous influx of liquidity in these difficult times.”

So, is the choice inflation or implosion?  Williams says, “That’s the choice, and I think we are going to have a combination of both of them.  I think we are eventually headed into a hyperinflationary economic collapse.  It’s not that we haven’t been in an economic collapse already, we are coming back some now. . . . The Fed has been creating money at a pace that has never been seen before.  You are basically up 75% (in money creation) year over year.  This is unprecedented.  Normally, it might be up 1% or 2% year over year.  The exploding money supply will lead to inflation.  I am not saying we are going to get to 75% inflation—yet, but you are getting up to the 4% or 5% range, and you are soon going to be seeing 10% range year over year. . . . The Fed has lost control of inflation.”

And remember, when the Fed has to admit the official inflation rate is 10%, John Williams says, “When they have to admit the inflation rate is 10%, my number is going to be up to around 15% or higher.  My number rides on top of their number.”

Right now, the Shadowstat.com inflation rate is above 11%.

. . .

When will the worst inflation be hitting America?  Williams predicts, “I am looking down the road, and in early 2022, I am looking for something close to a hyperinflationary circumstance and effectively a collapsed economy.”

There's more at the link, plus the full interview on video.  Recommended.

My views align closely with those of Mr. Williams.  We're on an ever-steepening inflationary curve, and accelerating fast.  I'm not looking forward to the next few years.

One practical precaution Miss D. and I are taking is to expand our "deep pantry".  We've long tried to keep extra food on hand in case of emergency, but we haven't had the space or the funds to do so on a large scale.  We still don't . . . but we can read the signs of the times as well as anyone.  We've accordingly bought a chest freezer, which we've parked in the garage, to have more frozen food on hand in case of need.  We've also expanded our canned food storage to a certain extent, and we're making sure to keep it topped up, replacing cans as we consume them.  There may be times ahead when we can't afford to buy all the food we need;  so, if that happens, we want something upon which to fall back.  I know others, wise to the signs of the times, who are doing the same thing for the same reason.

Peter