Continue reading ‘Hyperinflation: Dollar Devaluation Measured By Big Mac Index’ »]]> The Economist’s Big Mac Index is widely respected as a measure of currency valuation. Typically it is used to compare across countries. But it can also be used across time. Here, we take a look at how a 2012 dollar compares with a 1986 dollar.

In 1986 you could buy a Big Mac with $1.60. Today it takes $4.20. The 2012 dollar has the same buying power as 38 cents from 1986. That works out to a roughly 5% average inflation rate over the past 26 years. And inflation does appear to be accelerating.

Read more about the Big Mac Index on Wikipedia and the recent blog post by Peter Schiff about Big Macs and inflation.

Continue reading ‘Florida: Concealed Carry in School Parking Lots’ »]]> On my new Palm Beach DUI website, please see new post on Concealed Carry in Florida School Parking Lots.

[L]icensed parents can legally carry a concealed weapon in the car during the pickup and drop-off. It is not legal, however, to carry a concealed weapon into a school building and not even … outside the vehicle …. If you … might get out of the vehicle you should … store your firearm [securely] before you get out of the car.

Continue reading ‘Operation Gladio’ »]]> Some find conspiracy theories ridiculous. While they are extreme and hard to believe, that doesn’t mean they’re all false. Consider the story of Operation Gladio.

Some excerpts from the Wikipedia entry:

After World War II, the UK and the US decided to create “stay-behind” paramilitary organizations, with the official aim of countering a possible Soviet invasion through sabotage and guerrilla warfare behind enemy lines. Arms caches were hidden, escape routes prepared, and loyal members recruited: i.e., mainly hardline anticommunists, including many ex-Nazis or former fascists, whether in Italy or in other European countries.

It gets more disturbing:

The electoral support for the Italian Communist Party and other leftists was growing to more than 1/3 of the italian popular vote so that the establishment of a communist regime in Italy seemed possible even without a Soviet invasion, as it had been the case in Eastern Europe. The revolutionary elites … feared only a right-wing reaction, which never really materialized. Fearing such supposed menace, the institutionalized revolutionary forces of the Italian Communist Party turned to demonize any possible reaction: they started referencing to all terrorist deeds, even those clearly originated by the extreme left wing, as part of the ‘Strategy of Tension’ … with Gladio eager to be involved.

And more

[L]inks to terrorism have been either confirmed or claimed in the nine countries, Italy, Ireland, Turkey, Germany, France, Spain, Portugal, Belgium, and Sweden, demanding further investigation.

In short, major western governments including the US creating secret armies that engaged in terrorist acts in multiple countries, with the purpose of manipulating public opinion.

This is a wild conspiracy theory. It’s also well established that it actually happened. Once you get a full grasp on this story, you have a pretty good sense that it hasn’t ended.

So when you see a wild conspiracy theory about a big event, whether it’s 9/11 or the Boston Marathon, don’t dismiss it quite so quickly.

Continue reading ‘Hyperinflation, Competitive Devaluation and Consumer Caution’ »]]> This weekend’s headlines were not good and provide more hints of impending global hyperinflation which raises concerns about economic growth. The big front-page story in the Wall Street Journal was about consumers cutting back on spending. Also on the front page, but with a smaller headline, concerns fears of competitive currency devaluations by Japan and China.

Competitive devaluation is really the bigger story.

The Obama administration … warn[ed] Japan not to hold down the value of its currency to gain a competitive advantage in world markets ….
In its semiannual report on global exchange rates, the U.S. Treasury on Friday also criticized China for resuming “large-scale” market interventions to hold down the value of its currency ….

The hypocrisy regarding “currency manipulation” is glaring:

Amid sluggish global growth, governments face the temptation to lower the value of their currencies to juice exports. Those pressures are aggravated as central banks in the U.S., Europe and Japan seek to spur their economies by pushing cash into the system — policies that have the effect of weakening their currencies.

The US has been aggressively weakening the dollar for nearly five years now. It is absurd for the US to complain when other countries do the same, but this is just one more example of the US government ignoring the Golden Rule. Even worse than the administration, faux Republicans like Mitt Romney seek to call China a “currency manipulator,” as if that term doesn’t apply to our own country.

The deeper problem is that this back-and-forth of competitive devaluation pushes us further toward global hyperinflation. We’re printing money. The EU is printing money, as is the UK. As noted in the article and previously on this blog, Japan is doing it and so is China. Even the staid Swiss are on the bandwagon. The stated reason for currency devaluation is to help a country’s manufacturers remain competitive on the world market. But as countries race to devalue, that can increase the risk of accelerating inflation becoming a worldwide problem.

The consumer story feeds into this as well.

Americans in recent weeks have cut spending on everything from dining out to electronics to cars …. Cash-register sales in March fell by 0.4%, with weakness evident in many discretionary categories.

The story goes on to mention the impact of the payroll tax hike – Who would have imagined taking an extra 2% out of employee paychecks would lead them to cut spending? – and flatness in the mortgage business. Efforts to reinflate the mortgage bubble are failing.

Political insiders on both sides of the aisle are hoping and praying that economic growth will come back and save them from their deficit-spending binges. That dog won’t hunt. Governments will continue their relentless spending increases and there is no hope that revenue will catch up. The only way out for the elites is by printing money. They are oblivious to the risk of hyperinflation, or they just don’t care.