HYPERINFLATION SPECIAL REPORT (UPDATE 2010)

Economy and Financial System Face Eventual Great Collapse

Government and Fed Actions Have Narrowed Timing for
Hyperinflationary Great Depression to Next Five Years

High Risk of Ultimate Dollar Crisis Unfolding in Year Ahead

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Please Note: Given less than one month before the New Year and the possible breaking of the hyperinflation crisis in the year ahead, I have entitled this "Update 2010." The report is intended to replace the Hyperinflation Special Report of April 8, 2008, which was published post-Bear Stearns but pre-Lehman, pre-TARP, pre-recession recognition and pre-2008 election. Nonetheless, the outlook has changed little. In turn, the April 2008 report updated and expanded upon the three-part Hyperinflation Series that began with the December 2006 SGS Newsletter.

The new missive includes much of the text in the prior edition, with revisions and updates reflecting the still-unfolding economic and systemic solvency crises, and it expands upon some areas touched upon in the previous report. SGS Special Reports published subsequent to April 2008 have supplemented the hyperinflation story and are incorporated by reference in this update: Money Supply Special Report (August 3, 2008), Depression Special Report (August 1, 2009), Consumer Liquidity Special Report (September 14, 2009).

Overview

A Great Collapse. The U.S. economic and systemic solvency crises of the last two years are just precursors to a Great Collapse: a hyperinflationary great depression. Such will reflect a complete collapse in the purchasing power of the U.S. dollar, a collapse in the normal stream of U.S. commercial and economic activity, a collapse in the U.S. financial system as we know it, and a likely realignment of the U.S. political environment. The current U.S. financial markets, financial system and economy remain highly unstable and vulnerable to unexpected shocks. The Federal Reserve is dedicated to preventing deflation, to debasing the U.S. dollar. The results of those efforts are being seen in tentative selling pressures against the U.S. currency and in the rallying price of gold. (more)