By Gregory Mannarino, TradersChoice.net
Turn on the mainstream news and all the talk now is about the rising state of inflation. It’s an interesting situation, as, for years, the talk used to be “there is no inflation” – but that narrative has certainly changed in a big way.
This mainstream spin on this is: “The current spike in inflation is temporary.” Oh yes! There is inflation, but do not worry; it is just transitory.
Really? Transitory?
I have explained for years in interviews and in my blog, and, more recently, in several articles I have written for the Trends Journal, that rising inflation would become a problem. And, make no mistake about it, this is not by accident.
In my article last week, “THE FED’S DANGEROUS GAME,” I described how the Federal Reserve is using a kind of revolving door mechanism to create currency devaluation, which is massively inflationary. Through one door, the Fed is creating epic sums of debt out of thin air in the form of currency expansion. And through another door, the Fed is buying debt.
This mechanism, by design, is hyper-inflationary. Today, we are seeing the effect of this inflationary revolving door everywhere. People are getting nervous, henceforth, that is why Fed Chairman Jerome Powell and U.S. Treasury Secretary Janet Yellen are propagating the false narrative that the current state of inflation is transitory.
What you are not supposed to know is this: The current state of inflation is about to get much worse.
I would like to shed some light on the main forces that are working to assure that inflation will continue to rise.
For nearly a decade, the Federal Reserve has been on a currency creation/money-printing binge, unlike anything that has ever been seen in the history of the world. They have been able to get away with this because the economy is essentially dead and has been since the meltdown of 2008.
The dead economy has caused the velocity of money, which is the rate in which cash moves through an economy, to crater down to historic lows. By the velocity of money being at historic lows, all the extra cash created by the Fed cannot chase the existing amount of goods created, but this is changing.
There is essentially NO WAY for the Federal Reserve to prevent the epic sums of cash it has created from eventually chasing the same or existing amount of goods, which leads us back to the money velocity.
Once the money velocity begins to move higher, even fractionally, the specter of massive and even possibly hyper-inflation become very real possibilities.
The fact of the matter is this: We are currently in a currency crisis, and therefore the Fed, to prevent a complete lock-up of credit, MUST continue to create epic sums of cash out of thin air. If, for example, the Fed were to stop printing cash, in a nanosecond, we would have a global lockup of the entire financial system.
The prospect of inflation being “temporary” or transitory is a LIE. I foresee a full-blown financial crisis is on the horizon.
Here, again, this is no accident. The Federal Reserve is working to bring this about, so they can roll out a new currency system, which will be 100% digital, 100% fiat.
