When you read all of the talk about the bottom of the real estate market and the signs of recovery in the economy being close at hand, it’s a lie – it’s all about the fact that the FED is about to let the dollar collapse, thereby creating the appearance of a recovery in prices.

To quote directly from Mr. Bernanke, chairman of the Fed:

"U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation."

Buffet was quoted on May 2, 2009

Buffet warned that efforts such as the Treasury’s $700 billion Troubled Asset Relief Program and the $787 billion fiscal stimulus plan passed this year by Congress will have to be paid for, one way or another. The biggest losers in a surge of inflation, Buffet added, would include holders of bonds and other fixed-income assets.

"I haven’t had my taxes raised," said Buffett, who has run Berkshire for more than four decades. "My guess is the ultimate price will be paid by a shrinkage of the value of the dollar."

Greenspan was Quoted on June 26, 2009
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Inflation is a special concern over the next decade given the pending avalanche of government debt about to be unloaded on world financial markets. The need to finance very large fiscal deficits during the coming years could lead to political pressure on central banks to print money to buy much of the newly issued debt.

The US is faced with the choice of either paring back its budget deficits and monetary base as soon as the current risks of deflation dissipate, or setting the stage for a potential upsurge in inflation.

Check out these charts and behold the future (particularly the dollar index and gold charts).

HYPERINFLATION NATION:

Part 1

Part 2

Part 3

Argentina’s Economic Collapse (12-part awesome documentary):

June 29, 2009:
CNBC: "This Market Continues To Be Propped Up By Government Intervention And Manipulation"

My thoughts:

When home prices "appear" to stabilize and the stock market "appears" to rise in value in US dollar terms, remember that it’s only because the dollar is becoming worth-less, and it therefore takes more of them to buy virtually everything, as witnessed at the grocery store. When inflation turns into hyperinflation, homes may yet sell for millions of dollars (though still declining in REAL VALUE), while groceries will sell for hundreds of dollars, if not thousands, or tens-of-thousands, assuming stores remain in business.