Hyperinflation and Unemployment Two Signs of Serious Trouble

Hyperinflation and Unemployment Two Signs of Serious Trouble

...when it comes, it probably won’t be led by a gradual, orderly increase in consumer prices. We’re still in a de-leveraging cycle – with plenty of spare capacity and little excess purchasing power. Which means, normal demand will not push up prices.

Take the labor market, for example. There are millions of idle hands available… Labor is a big part of business costs. Until unemployment goes down and employees have some bargaining power, there shouldn’t be any inflation coming from that front.

This will be a different kind of inflation…much more violent and dangerous. Prices will shoot up suddenly, quickly – as people lose confidence in the dollar. It will not be gradual, but shocking…turbulent…unexpected. Gold will hit $1,500…then, $2,000 just a few weeks later.

This hyperinflation, along with high, long-term unemployment rates, will set the stage for serious trouble.



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[link to dailyreckoning.com]