ART CASHIN: The US And Weimar Germany
UBS’s Art Cashin is sounding alarms on hyperinflation (as in The US And Weimar Germany) again.
The worry is that all of the Fed-induced liquidity in the financial system will begin to churn, causing the price of goods to surge.
These are the ingredients of inflation are in place like dominos, said Cashin to Eric King of King World News. And once those dominos fall, it’ll happen very fast:
Listeners (and readers) will have to keep an eye on the velocity of money. Watch figures like, here in the United States, the M2 (figure), and see if it begins to grow through velocity, and get very cautious at that point. There are some potentially eerie parallels (today vs the Weimar Germany era). The United States trauma was unemployment and deflation (in the 30s), but in Germany in the 20s, it was money that ruined an entire society.
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There is a kind of delayed effect (from all of the money printing), and you want to watch very carefully. If that starts to accelerate, if you begin to see not just the first signs of inflation, but actual acceleration, it will come very fast. Then you have to think about, are you protected? Do you have your money in hard assets?
And it’s more imminent than you think:
I think you are certainly at a ‘flashing yellow alert.’ You have in place a variety of things that could begin to react somewhat domino-like. As I said, there are measures and items that the listeners (and readers) can look for themselves. Look at what is the growth in the money supply, M2? It comes out every week.
If it begins to grow rapidly, then the money that the Fed has created will be seen as moving through the system. That will create the high risk of accelerated inflation, and perhaps, God forbid, runaway inflation.
Cashin also had another scary thing to say:
Vladimir Lenin said that the best way to take over a country and subjugate the people is to debase the currency. So whether you do it by accident or purposely, it has a very deleterious (damaging) effect on the population and on the culture.â€
There are definitely parallels in regards to hyperinflation between the US and the Weimar Republic in Germany.
