Tuesday, November 16, 2010

Hyperinflation is Guaranteed!

Over the past two years I posted numerous articles warning of HYPERINFLATION and, even, TOTAL ECONOMIC COLLAPSE if we continue down the path of UNCONTROLLED SPENDING enacted by the Obama administration.  The resulting debt, I said, would destroy our economy.  I spent many sleepless nights over my concern for the economic survival of our country.  I hoped and prayed I was wrong.  Unfortunately, I have been watching helplessly as my most fearful scenario continued to develop.

In May, I discovered an organization called the National Inflation Association.  At that time it was relatively unknown.  Its mission was to prepare Americans for hyperinflation and help Americans to survive.  But it has been doing a superb job of raising a warning flag to the pending disaster for our economy and the actions required to save it. Since that time the NIA has gained national renown as its predictions have come to fruition.  In its latest article, the organization warns that "hyperinflation is guaranteed if the US stays on its current path".  The article goes into great detail explaining the mechanisms leading to this disaster.  And we're not talking 20 years down the road.  It's already started!

The American people intuitively have known that uncontrolled spending will lead to economic disaster.  That is why the Congress was cleaned out and replaced in the recent election.  That, however, is not enough!  Even the members of Congress who acknowledge the problem are afraid to enact the extreme steps and cutbacks in entitlements that are essential to preventing total economic failure.  We are so far over our heads in debt that to save our economy ALL AMERICANS WILL FEEL THE PAIN!

What we, the people, need to do, now, is contact our elected officials and ensure they know that we are aware of the crisis, that we are aware of the extreme and painful measures required to save our economy and, most importantly, that WE ARE NOT ONLY WILLING, BUT THAT WE DEMAND THEY TAKE THESE ACTIONS!

I include the latest National Inflation Association article, below, for your review.
Hyperinflation is Guaranteed if U.S. Stays on Current Path
by the National Inflation Association

The National Commission on Fiscal Responsibility and Reform released last week their 'CoChairs' Proposal' on how the U.S. can achieve $100.2 billion in domestic savings and $100.1 billion in defense savings in fiscal year 2015, for total discretionary spending savings of $200.3 billion. Combined with other steps designed to boost tax revenues, the commission's plan, if implemented, is expected to reduce the projected 2015 U.S. budget deficit by $400 billion to $372 billion. NIA believes it is very unlikely that our representatives in Washington will have the political backbone and courage to implement any of the commission's proposed spending cuts. The truth is, the U.S. is on a path towards exploding budget deficits in the years ahead, that could cause an outbreak of hyperinflation by the end of calendar year 2015.

Many people are asking us when exactly we expect our food price projections to be reached. We can pretty much guarantee you that all of our food price projections will be seen this decade. There is a very good chance of our projections being reached by the end of calendar year 2015 and a slight chance that they will be reached as soon as the 2012 elections. NIA's food price projections are very conservative. They are based on the current purchasing power of the U.S. dollar and do not factor in the likelihood of an outbreak of hyperinflation.

NIA believes that if the U.S. stays on its current path, we are guaranteed to see hyperinflation this decade. The only way it will be possible to prevent hyperinflation is if the U.S. government dramatically cuts spending across the board immediately and if the Federal Reserve raises interest rates from near zero percent (where they have been for nearly two years) to a level that is higher than the real rate of price inflation. Considering that the Federal Reserve still claims to fear deflation and just announced massive quantitative easing, we see very little chance of any major interest rate hikes taking place during the next six months.

Although the commission's proposal includes many large spending cuts including freezing federal salaries for three years (saving $15.1 billion), cutting the federal workforce by 10% (saving $13.2 billion), and eliminating 250,000 non-defense service and staff augmentee contractors (saving $18.4 billion); even if their proposal was implemented it would be too little too late. The commission's proposal calls for its cuts to be gradually implemented beginning in early 2012 and it includes absolutely no meaningful cuts to social security. The only proposed major changes to social security are raising the retirement age to 68 in year 2050 and 69 in year 2075. There is absolutely no chance of the U.S. dollar surviving past the year 2020 unless much more drastic spending cuts than the commission has proposed are implemented within the next twelve months.

The commission says that if we fail to implement their proposed spending cuts, we will likely see interest payments on our national debt reach $1 trillion by 2020. The reality is, NIA believes interest payments on our national debt are likely to reach $1 trillion in 2015. It is currently projected that our interest payments in 2015 will be $586 billion. However, this number is based on a projected 4.1% interest rate on our 91-day treasury bills and 5.3% interest rate on our 10-year treasury bills.

The yield on 10-year U.S. treasuries has risen in recent weeks by 41 basis points to 2.94%, up from 2.53% on November 4th. NIA believes it is likely the 10-year yield will rise back above 4% in the first half of 2011. By 2015, we expect the 10-year yield to be substantially higher then 5.3%. During the 1970s, the last time we had an inflationary crisis like the one we are rapidly approaching, yields on the 10-year bond exploded. When each of the agricultural commodities in our food inflation report reached their real all time highs in the 1970s, the average 10-year bond yield at the time of their highs was 7.47%. With the Federal Reserve likely to be forced to raise the Fed Funds Rate to around this same level, based on our projected public debt in 2015 of $14 trillion, our interest payments will likely rise to $1.046 trillion or 29% of projected tax receipts, and this is a very conservative estimate.

The Federal Reserve's monetary base currently stands at $1.9851 trillion and is projected to rise to $2.5851 trillion by mid-2011 due to the Fed's upcoming $600 billion in quantitative easing. The U.S. M2 money supply rose over the past week by $22.4 billion to $8.7862 trillion. This represents a $1.1648 trillion annualized increase, which would equal 13.25% monetary inflation over the next year. The M2 multiplier, or M2 divided by the monetary base, currently stands at 4.426, compared to a long-term average of 10. Based on a projected monetary base of $2.5851 trillion and a long-term average M2 multiplier of 10, the M2 money supply has a chance of rising as much as 194% to $25.851 trillion over the next few years.

In the short-term, if the M2 multiplier remains at 4.426, it is likely the M2 money supply could rise to $11.4416 trillion next year, up 30.22% from its current level. With the UBS Bloomberg CMCI Food Index currently up 30.5% from its low in August, it appears as though the market has already factored the upcoming 30.22% increase in the M2 money supply into agricultural commodity prices. Even if food manufacturing companies and retailers agree to accept 2/3 of these rising costs in the form of lower profit margins, Americans will still see about a 10% rise in retail food prices come early 2011.

The upcoming food inflation crisis and eventual hyperinflation will come as a direct result of our representatives in Washington trying to prevent a much needed recession by propping up Real Estate prices through bailouts, stimulus plans, tax rebates, and other wasteful programs. The only thing that our elected representatives care about is remaining in power. They only see our current problems and not the problems that will arrive next as a result of their actions. Their goal is to make the average American as dependent on them as possible through massive price inflation, so that the average American is forced to rely on entitlement programs just to survive.
To view my previous articles on this subject, click on the link(s):

Monday, November 15, 2010

A Final Flight Home Done Right

Countless members of our military have made their final flight home after sacrificing their lives in the defense of their country, freedom and us. A friend just sent me an e-mail with a story written by an unknown airline captain from an unknown airline in his own words. In it he describes what happened when he was informed the remains of a fallen soldier were being transported in the cargo hold of his airplane. This is one instance where it was done right! My hat is off to the captain and his crew, the airline dispatcher and all members of this unknown airline at this unknown hub.

This story will leave you with appreciation as well as damp eyes. I include it, below, for your review.
A Final Flight Home

My lead flight attendant came to me and said, “We have H.R. on this flight.” (H.R. stands for human remains.)

“Are they military?” I asked.

"Yes", she said.

"Is there an escort?" I asked.

"Yes, I already assigned him a seat."

"Would you please tell him to come to the flight deck. You can board him early,” I said.

A short while later, a young army sergeant entered the flight deck. He was the image of the perfectly dressed soldier. He introduced himself and I asked him about his soldier. The escorts of these fallen soldiers talk about them as if they are still alive and still with us.

"My soldier is on his way back to Virginia," he said. He proceeded to answer my questions, but offered no words.

I asked him if there was anything I could do for him and he said no. I told him that he had the toughest job in the military and that I appreciated the work that he does for the families of our fallen soldiers. The first officer and I got up out of our seats to shake his hand. He left the flight deck to find his seat.

We completed our preflight checks, pushed back and performed an uneventful departure. About 30 minutes into our flight I received a call from the lead flight attendant in the cabin. "I just found out the family of the soldier we are carrying, is on board," she said. She then proceeded to tell me that the father, mother, wife and 2 year old daughter were escorting their son, husband, and father home. The family was upset because they were unable to see the container that the soldier was in before we left. We were on our way to a major hub at which the family was going to wait four hours for the connecting flight home to Virginia.

The father of the soldier told the flight attendant that knowing his son was below him in the cargo compartment and being unable to see him was too much for the family and him to bear. He had asked the flight attendant if there was anything that could be done to allow them to see him upon our arrival. The family wanted to be outside by the cargo door to watch their soldier being taken off the airplane. I could hear the desperation in the flight attendant's voice when she asked me if there was anything I could do. "I’m on it," I said. I told her that I would get back to her.

Airborne communication with my company normally occurs in the form of e-mail like messages. I decided to bypass this system and contact my flight dispatcher directly on a secondary radio. There is a radio operator in the operations control center who connects you to the telephone of the dispatcher. I was in direct contact with the dispatcher. I explained the situation I had on board with the family and what it was the family wanted. He said he understood and that he would get back to me.

Two hours went by and I had not heard from the dispatcher. We were going to get busy soon and I needed to know what to tell the family. I sent a text message asking for an update. I saved the return message from the dispatcher and the following is the text:

"Captain, sorry it has taken so long to get back to you. There is policy on this now and I had to check on a few things. Upon your arrival a dedicated escort team will meet the aircraft. The team will escort the family to the ramp and plane side. A van will be used to load the remains with a secondary van for the family. The family will be taken to their departure area and escorted into the terminal where the remains can be seen on the ramp. It is a private area for the family only. When the connecting aircraft arrives, the family will be escorted onto the ramp and plane side to watch the remains being loaded for the final leg home. Captain, most of us here in flight control are veterans. Please pass our condolences on to the family. Thanks."

I sent a message back telling flight control thanks for a good job. I printed out the message and gave it to the lead flight attendant to pass on to the father. The lead flight attendant was very thankful and told me, "You have no idea how much this will mean to them."

Things started getting busy for the descent, approach and landing. After landing, we cleared the runway and taxied to the ramp area. The ramp is huge with 15 gates on either side of the alleyway. It is always a busy area with aircraft maneuvering every which way to enter and exit. When we entered the ramp and checked in with the ramp controller, we were told that all traffic was being held for us.

"There is a team in place to meet the aircraft," we were told. It looked like it was all coming together, then I realized that once we turned the seat belt sign off, everyone would stand up at once and delay the family from getting off the airplane. As we approached our gate, I asked the copilot to tell the ramp controller we were going to stop short of the gate to make an announcement to the passengers. He did that and the ramp controller said, "Take your time."

I stopped the aircraft and set the parking brake. I pushed the public address button and said, "Ladies and gentleman, this is your Captain speaking I have stopped short of our gate to make a special announcement. We have a passenger on board who deserves our honor and respect. His Name is Private XXXXXX, a soldier who recently lost his life. Private XXXXXX is under your feet in the cargo hold. Escorting him today is Army Sergeant XXXXXXX. Also, on board are his father, mother, wife, and daughter. Your entire flight crew is asking for all passengers to remain in their seats to allow the family to exit the aircraft first. Thank you."

We continued the turn to the gate, came to a stop and started our shutdown procedures. A couple of minutes later I opened the cockpit door. I found the two forward flight attendants crying, something you just do not see. I was told that after we came to a stop, every passenger on the aircraft stayed in his seat, waiting for the family to exit the aircraft.

When the family got up and gathered their things, a passenger slowly started to clap his hands. Moments later more passengers joined in and soon the entire aircraft was clapping. Words of ‘God bless you’, 'I’m sorry', 'Thank you', 'Be proud', and other kind words were uttered to the family as they made their way down the aisle and out of the airplane. They were escorted down to the ramp to finally be with their loved one.

Many of the passengers disembarking thanked me for the announcement I had made. They were just words, I told them, I could say them over and over again, but nothing I say will bring back that brave soldier.
[My thanks to Phil Hunter for forwarding this story]

Thursday, November 11, 2010

2010 Veterans Day Tribute

Today is November 11th.  Once again, it is time to remember and honor those who have served and who serve our nation today.  The freedom we enjoy today was, and still is, bought and paid with the blood, sweat and the lives of countless patriots that put the warmth and safety of their homes and families behind.  On this day, take a moment to thank our veterans who have served and those are in harm's way, today, defending our freedom and this great nation.