Are we on the road to hyperinflation? Perhaps.
We make every effort to keep our friends and clients current with well-researched and reliable information about the economy and the gold and silver markets. We avoid citing blind assertions and quoting sensationalistic price forecasts to protect both our clients and our own reputation.
The case for owning gold and silver is so persuasive on its historical merits right now that no overstatement is needed.
From time to time, we do share the outlook of people with substantial track records and demonstrable insight into the financial and monetary affairs that have us all concerned. For example, we repeatedly cited Jeremy Grantham’s warning about the superbubble that is now imploding for all to see.
Grantham fits the criteria we mentioned: a substantial track record and demonstrable insight. Grantham is the chairman and co-founder and chief investment strategist of Grantham, Mayo, & Van Otterloo. He has made a career of correctly identifying market bubbles, including the dot-com and housing bubbles.
We last cited Grantham in January, warning that the Federal Reserve had created bubbles in stocks, bonds, and housing all at the same time, hence a superbubble. “They will not be able to prevent, sooner or later, the asset prices coming back down, so we are playing with fire,” he said.
Now we must share Paul Singer’s warning about hyperinflation. Singer is the founder, president, and co-CEO of Elliott Management. Like Grantham, Singer is a billionaire with substantial accomplishments and compelling reasoning. Just as Grantham has a special focus on market bubbles, Singer is an investor in sovereign nations and their bonds. He, therefore, keeps a close eye on their debt and monetary matters. Singer is among the leading Wall Street figures we cited who went long gold as Fed money printing went stratospheric in 2020.
Singer’s hedge fund warns in scorching terms now that the “world is on the path to hyperinflation, which is the direct route to global societal collapse and civil or international strife. It is not baked, but that is the path that we are treading.”
Singer pulls no punches. Investors who have lived through prior crises like the brutal bear market of the stagflation 1970s, the dot-com crash, and the mortgage meltdown should not assume that they have seen everything, he says. The blame lies with central bankers who have been “dishonest” in fingering the pandemic and supply chain issues instead of their own unhinged monetary policies.
“The current situation contains so many frightening and seriously negative possibilities that it is difficult to avoid the conclusion that a seriously adverse unwind of the everything-bubble is ‘baked.’ The world’s major central banks and political leaders are all trapped in a vise of their own creation,” says Elliot’s letter to clients.
That letter also warned that extreme conditions in the current economic landscape have “made possible a set of outcomes that would be at or beyond the boundaries of the entire post-WWII period.”
This is an urgent argument for owning gold. Like Grantham’s warning about years of malinvestment that created the superbubble now so painfully popping, Singer’s warning is based on long-term monetary excesses that have already taken place. None of these policies, years in the making, are neutralized by a new election or by changing majorities in Washington. That is because the debts behind the monetary crisis are real; the money has been spent, and the debt does not go away. The money that has been printed, the trillions of fiat dollars, has already been printed. It must be reckoned with as well.
The only question is whether Singer’s warning is grounded in real numbers. It is.
World monetary growth is nothing short of explosive. David Stockman reports: “Compared to $4 trillion in 2002, the combined balance sheets of the world’s central banks now total in excess of $43 trillion.”
“There is nothing like this in recorded history.”
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The opinions, beliefs, and viewpoints expressed in this article do not necessarily reflect the opinions, beliefs, and viewpoints of Red Rock Secured LLC or the official policies of Red Rock Secured LLC. Red Rock Secured LLC is not a financial advisor, is not licensed to provide investment advice and neither provides investment nor financial advice. Red Rock is a product specialist that can help evaluate your precious metals purchase options.