Here's a reason to stop and think about our current national issues

A friend of mine sent this to me. Her Daughter in Law, Samantha is very intelligent. I've heard her speak before an audience and she kept everybody spellbound.

The following is from our Daughter In Law, Samantha. Sure gives you reason to stop and think about our current national issues.

Below is a wholesale price index from Germany prior to and leading into the start of the Weimar republic. Given the inflation that we are currently seeing and the trajectory of events in the world I think we are about 7 to 12 months away from the start of hyperinflation. Based on the chart below here is the Sammy theory of Obamanomics and the plan to screw us all.

Lets assume that at the point of time of the 2008 election we are equivalent to Germany in 1914. The price index is one. This is the base line. To make the math easy I'll use a loaf of bread that costs $1.00. So the world is all hunky dorey and the seas will stop rising (cue the bad mock messiah music....)

In 2009 we began to see a little bit of inflation. Ok we the taxpaying consumers saw it but Bernake kept insisting that inflation was low or non - existant. So we are now at the Jan 1919 level of inflation in Germany and our loaf of bread is $2.60. Not really a big deal right??? Go about your business nothing to see folks.

Again the start of 2010 and the Fed insists that there is no inflation - fast forward to our chart and our loaf of bread is now $3.40. Still no inflation, right.....

Fast forward to the end of 2010 and the beginning of 2011. We've had some major crop failures world wide, we're burning corn for fuel and things from December to March have crept up. China is threatening to not purchase any more of our debt. The Japanese will probably be looking to sell our bonds to raise money to pay for the earthquake. Our internal policies are not exactly inspiring confidence here and abroad.
Retailers can no longer hold prices low due to the cost of materials and fuel. Walmart, JC Penney, McDonalds and many clothing and food retailers said that they expect prices to rise dramatically in the next few months - sometime between May to August. Expect a large increase in May - August 2010 of our little loaf of bread to yes $12.60. This will be a huge shock at once or retailers could do this in increments but the end result will be the same.

We will see small increases to $14.40 and even a slight dip - after all if demand drops prices drop somewhat even in hyperinflationary times. So if the time line holds (and I'm fairly certain it will because we are following the Weimar path to a Tee) by January of 2012 we will be at the Jan-July 1921 mark in the chart below.

Given the significance of 2012 (ELECTION) in January (or sooner) we will see another round of Quantitive Easing. This is basically just printing more money. And with the election, I can assure you that a HUGE pile will be printed to keep the party going. Surf's up dude!!!!!! So by Jan of 2012 (or possibly sooner) that loaf of bread will be $36.70.

From then on it is down hill rapidly - that loaf of bread in 6 more months will be $100.60. And one year from that July of 2013 that loaf of bread will be $2785!!!! In six more months a loaf of bread will cost more than most homes in America are currently selling for. Basically prices will double almost daily. By December 2013 prices will be insane.

Now the analogy with the loaf of bread is very oversimplified. Basically we are seeing increases in the last 4 months of roughly 10 - 12% across the board. You feel an increase of that much. And due to the cost of basic commodities rising, we will see a large jump (another 10 - 25% or maybe more jump). This is what the retailers of food and clothing are warning about now.

The straw that broke the camels back in Weimar Germany and will do the same in the United States is the loss of confidence of the investors. JP Morgan ironically enough lost faith in Germany and cut off funds, p
robably around the January 1922 mark in the chart.
Things deteriorated rapidly. What this essentially means for us now is very scary. The downgrading of our future to unstable by Standard and Poore, the threat of China not buying our debt, the "need" to raise the debt ceiling, and the end of QE2 all converge in June of this year. If this is our moment of loss of confidence, like Germany experienced with JP Morgan cutting off funding, we will plunge into hyperinflation. Because our government will have no choice but to print money like there's no tomorrow because there will be no tomorrow with no funding from abroad.

I have done a lot of research on this and I can't seem to find any nation that inflated their way to prosperity. The Mugabe School of Hyperinflation is a road to hell paved with stacks of worthless paper. As you can see from the chart, once a certain threshold is crossed - the jump from 14.4 ~14.3 to 36.7 things just shoot up. This is the exponential function at its finest. 2 becomes 4, 4 becomes 8, 8 becomes 16 and so on. It doesn't take long for the problem to spiral out of control.

Hope this all makes sense. Somehow I don't see how it can add up any other way. The link to one of many articles is below.

Now just rock me to sleep with this one!!!

Love Sam

German Wholesale Price Index

http://seekingalpha.com/article/96723-what-effect-will-hyperinflation-have