Monday’s RANT, “GERALD
CELENTE, PATRIOT,”I wrote of my recent experience renewing the
leases of my family’s cars, in both cases at prices roughly 10% lower
than the previous leases, signed in February 2008 and May 2009, respectively.
Based on discussions with the dealers – particularly mine, as it was
the same salesman as I dealt with three years ago – the reason
for such declines was principally the weak economy. Plus – as I noted
this weekend – “Government Motors” has ramped up production
so high, it is experiencing RECORD DEALER INVENTORIES, thus pressuring new
response to this commentary, David Schectman wrote
the following in his Tuesday
presents a valid viewpoint, but it is also possible that the fall in prices
he refers to is the result of deflation – at least that is a position
Richard Russell has hammered on for several years. Yes, it is possible to
have deflation of prices but inflation due to currency debasement. In fact,
Jim Sinclair preaches that the inflation we will shortly have to live with
will not be the “typical” demand-driven version, but rather
currency induced form of inflation, caused by the Fed’s QE-to-infinity
policy. That said, there is little to be excited
about in the economy, as witnessed in John Williams’ latest release.
brings me to the point of today’s RANT, “WANT VERSUS NEED.”
For as long as I can remember, the term “inflation” has been
butchered beyond recognition. Even amongst the PM “shadow world,”
few understand price inflation is the symptom, and MONEY PRINTING the cause.
After all, the definition of “inflation” is the rate of change
of the money supply, NOT the general price level of goods and services.
The fact the government lies about both the money supply and price levels is
beside the point, the key being that the latter MUST eventually rise in
response to growth of the former.
even in the extreme case of HYPERINFLATION, price level changes are difficult
to forecast. They are NEVER uniform, and in today’s corrupt,
centrally-planned world, are influenced as much by government manipulation
as supply and demand. However, the rule of thumb I have espoused for years
CANNOT, and WILL NOT be denied by intervention – i.e., items we NEED
will inflate the most, and items we WANT the least, in many cases actually deflating.
actually experience HYPERINFLATION, everything will rise in price.
However, only items we NEED will rise in real terms, with items we
WANT falling in by this measure, in many cases precipitously. Moreover
– as noted in my recent commentaries about Weimar Germany – even
the almighty stock market fell sharply in real terms. Actually, I
believe a small handful of resource equities rose dramatically, while
the great majority rose weakly at best, with the majority of companies
going BANKRUPT due to the horrific ramifications of hyperinflation.
larger than misnomers regarding the definition – and causes of –
“inflation,” is the public’s broad misunderstanding of what
we “NEED” and “WANT.” Much of this fallacious
thinking is due to government BRAINWASHING – such as the concept of
“The American Dream,” promoting home ownership, two cars, and a
college education for all. However, NONE of those “big three”
concepts are actually NEEDS, at least not in the manner prescribed by such
needs “shelter,” but home ownership is decidedly a
“WANT,” not a “NEED.” The great majority of the
world’s population does not own a home, instead RENTING to obtain
shelter. Plus, I might add, if you have a MORTGAGE, you don’t
“own” anything – the bank does! And I won’t
even go into the fact that 45% of ALL U.S. mortgages are
“underwater,” making it impossible to even brainwash YOURSELF
into believing you “own” anything.
automobiles: Yes, everyone NEEDS “transportation,” but in most
cases, transportation can be obtained via mass transit. And for those that do
require a car – which in America constitutes the majority – there
is no NEED to own a new car, as there are plenty of used cars
to choose from. It may be less prestigious – and fun – but
the fact remains, demand for used cars is much stronger than new
cars, as is demand for home rentals compared to purchases.
As for EDUCATION,
the “need” for a college degree might be the greatest of all
American fallacies. In my view, “college” was a PRIVILEGE
afforded by the strong U.S. dollar of the 1950s through the 1980s. America
was such a powerful nation – in all facets – with such a high
standard of living and low debt load, its citizens could afford to pass four
valuable years of their lives partying in college, paying big money for a
curriculum that typically consisted of at least 75% “filler,” and
for many 100%.
was much lower then – making college more affordable – while
citizens’ debt loads were much lower and real wages much higher, making
it easier to take on significant student loans. Moreover, U.S. EMPLOYMENT
experienced secular growth throughout this period, guaranteeing jobs for the
majority of college graduates, regardless of their skill level and/or
ALL of these trends have permanently reversed, making the
“benefits” of a college education difficult to discern, while the
“costs” for most have become prohibitive. In other words,
what people NEED is job training, intelligence, and motivation – plus a
little luck – but what they WANT is a college degree. And if what I
just said isn’t enough to strike a chord, I have NO DOUBT your views
will be forever changed after watching the NIA’s brilliant
2011 documentary, “College
conclude, be very wary of how you view the term “inflation,” and
don’t for a second believe it implies EVERYTHING will rise in
price, certainly not in real terms. The only assets you want to OWN
during periods of rising inflation are those that will increase in real terms,
of which only items people NEED will fit that description (PHYSICAL GOLD and
SILVER, FOOD, ENERGY, and other ITEMS OF REAL VALUE). However, items that you
WANT – but do not NEED – are GUARANTEED to lose value in real
terms, and likely in nominal terms as well.
YOURSELF, and do it NOW!