Bailouts cause Hyper-Inflation?
bailouts of the financial system will destroy the dollar,
euro and sterling because of hyperinflation, Martin Hennecke,
senior manager of private clients at Tyche told CNBC. But
Todd Everts, president & CEO of Wall Street Global,
of the banks is the first step down the road to hyperinflation,"
Hennecke said Monday. "Maybe we are not seeing the
Zimbabwe-style (hyperinflation), but inflation is a major
major risk and investors should look at this very carefully."
Poor's projected in 2005, well before the current crisis
hit, that all the major Western governments would be heading
towards default on their sovereign bonds, Hennecke said.
But the dollar's
value is set to decrease over time, argued Everts, after
hearing Hennecke's case.
consumer is not going to be able to drive the world economies
as we've seen in the last several generations," Everts
said, adding that a worsening trade deficit would help to
think we're going to get hyperinflation to the extent that
we've seen in falling economies like we saw several years
ago in Argentina, Brazil and what's happening right now
in Iceland," Everts said.
said the price of gold would continue to surge as investors
swapped out of cash.
that cash was not necessarily the safest place to invest:
"You can't just go to cash, What is cash? Cash is a
several trillion dollar money-market mutual-fund industry
in the US, which has seen several funds lose its one dollar
NAV (Net Asset Value)."