TFMR Podcast #12 - John Williams of


Boy oh boy, do I ever have a timely treat for you today. Back on Thursday, I was able to visit with John Williams of Shadow Government Statistics. In light of today's heavily-manipulated BLSBS report, I'd say this podcast is rather timely.

As most of you know, my college degree is in Econ so getting a chance to visit with John was a real pleasure. I mention at the end of the podcast that I could have gone on speaking with him for another hour or two but, in respect of his time, I had to cut us off after just 30 minutes. Please take the time to listen to the entire thirty minutes, though. The information that John provides, particularly near the end of the podcast as he discusses the CPI and the coming "hyperinlationary depression", is extremely important.

I'd also like to pass along a hearty and sincere endorsement of John's work and his website. He provides plenty of information free of charge but if you want to go in-depth, you should seriously consider purchasing a subscription. The site can be found here:

I'm confident you'll enjoy this podcast and I hope to have a follow-up conversation with John sometime soon. TF


Feb 5, 2012 - 8:47am

@Big L

This is what happened in Weimar Germany

And this is what happened in Zimbabwe

However it happens it aint gonna be pretty


SmiddywessonBig L
Feb 5, 2012 - 8:46am


"Is is possible to calculate how much $ value is lost in hyperinflation?"

Yes, the currency can go to zero. But even if it doesn't, what is coming will be denominated in gold and silver, not in dollars, and it won't happen overnight so you can't get a quick read on how much "value" is erased. This is likely to be a long drawn out process (kicking the can) followed by a cataclysmic event, and trailed by another long drawn out process . So at what point does one compute the lost "value" in the dollar? We may not get the announced "devaluation by x%" we expected when the can kicking began, we may just march down to zero.

A person could argue that no real money is lost in hyperinflation, it just moves wealth around and erases the illusion of money wherever it finds it. For example: If trader A buys a call, and trader B holds a put, they both believe they hold something of value, but that only is true if the system that backs up that trade continues to exist. No goods and services are destroyed by hyperinflation, it just destroys all the outstanding promises and illusions of wealth through destruction of the currency and counter party risk. One very good example was the housing collapse. Many people went from being "wealthy" to being insolvent because the illusion of a nest egg wrapped up in their home evaporated. Nothing about the house changed, just the promise that it was worth more than the mortgage. That was just a storm, hyperinflation will be a hurricane.

Hyperinflation doesn't just remove the illusions of value, and erase wealth by inhibiting the ability to pay up, it also moves wealth, things of real value, between participants in the economy. Many will be left with no means of caring for themselves and their family. They will sell their goods at bargain basement prices when wealth is denominated in something else. In many cases in the past, that next thing was another unbacked fiat currency. Forced to sell their goods to survive, people move into the new currency only to see that one destroyed too. Rinse and repeat. Eventually, a currency backed by precious metals steps up to establish a viable monetary system.

There are winners and losers during hyperinflation. The winners are holders of what the future considers money. Holding things of value isn't enough because many of those holders will be forced by circumstance to trade those things for real money in order to survive. We've all heard that rising gold prices mean the currency falls in value, and vis versa, well that goes for everything else too. Most of society has no PMs at all, so to trade for gold or silver, the value of their cherished stuff will fall precipitously.

So, the Cliff Notes version of that rambling answer is some forms of money, i.e. things which fall into the categories of illusions like the worth of your home, or promises to pay like cash or accounts, can evaporate overnight. Other forms of money like your possessions can disappear a little at a time as you hoc them for what you need. In any event, they will fall in value relative to the sole survivors of such events, gold and silver. Some types of money, promises and illusion disappear, but goods and services don't, and in a hyperinflation they flow into the pockets of those with gold and silver. A good portion of When Money Dies dealt with the behavior of the winners, who lived it up in shocking displays of wealth while others suffered.

So what about the dollar? A currency can be driven to effectively zero very quickly. In Weimar Germany, it took about a year, say Oct. 1922 to Oct. 1923. One would hope that the authorities would step in first and devalue all currencies relative to gold prior to this happening, but who can say? Our debt levels are tremendous and can't be paid. I've publicly stated I thought they would step in and devalue all fiat relative to the SDR, tie the SDR to gold, ramp gold prices, and print like crazy before the end of March and I'm not going to flip flop, but recently I have suspected that TPTB might not have as much control as I thought. The end of When Money Dies talks about a tipping point after which there is no political will to do anything but ride the economy down into ruin. If that's the case on a national level, then why should an international level be any different? Shouldn't it be MORE difficult to orchestrate a soft landing in the form of a devaluation on an international basis? I am losing faith in our masters. At some point the debt accumulated to kick the can makes a devaluation impossible, because the currency you need to devalue is already worthless. Hopefully, we haven't already reached that point. If so, the dollar WILL go to zero.

Bottom line:

Cash is going to be trash. The "safety of the US dollar" is going to go the way of the phrase "We have a strong dollar policy." There's nothing to stop a flight to PMs except propaganda. Negative interest rates, and unsustainable debt ensure this event.

Anything denominated in dollars, like bonds can go to zero.

Stocks won't go to zero (unless an individual company goes bankrupt) but remember what I said about illusions and promises, they can drop 90% or more. Ideas about "value" can disappear overnight.

PMs: If your kid needs braces, you need money, not a piano. Everything but PMs is going to shrink because nobody will have any money. As that happens, the price of gold and silver has to rise. Forcing the value of the entire world's wealth through the tiny garden hose of gold and silver is going to put an incredible amount of force behind rising PM prices.

Wow, that was a long one. Sorry.

Big L
Feb 5, 2012 - 7:04am

Is is possible to calculate

Is is possible to calculate how much $ value is lost in hyperinflation?

Is there a correlation between money supply and value? Or is it more complicated than that?

Where can we get info on what we're likely to experience as 'hyperinflation'? Is is possible to predict the future value of money in circumstances such as this? Will our money be worth half it's current value or 10% ? Or god forbid, less than 10% ?

How do we prepare for such an event? I'll go hang out in the prep forums.

Thanks Turd

Sadder, but wiser........

Big L

Big L
Feb 5, 2012 - 6:49am

Wow..... I knew it was bad. I

Wow..... I knew it was bad. I didn't know it was that bad.

I wish everyone in America had this info., it's an ugly truth, but at least with knowledge we can prepare as best we're able.

Thanks Turd,

Big L

Feb 5, 2012 - 3:39am

Another promising read

Paper Money Collapse by Detlev Schlichter.

I confess I bought this a few weeks ago but haven't gotten round to reading it yet.

A review here:

Author's website: (includes interview with Max Keiser from Dec. 2011)

Available here:

Apologies if this info has been posted here before.

Feb 5, 2012 - 2:47am


As Homer Simpson might say, "Silver, what can't it do?".

Mariposa said it already but I'll repeat it; I read all your posts and enjoy them. Really nice job parsing the IMF articles and thanks for posting that conclusion of When Money Dies. I'll pass that along to my list of family and friends but I fear it will affect their rocky exterior as much as any other wave I've sent their way.

Key Economic Events Week of 5/25

5/26 8:30 ET Chicago Fed
5/26 10:00 ET Consumer Confidence
5/27 2:00 ET Fed Beige Book
5/28 8:30 ET Q2 GDP 2nd guess
5/28 8:30 ET Durable Goods
5/29 8:30 ET Pers Inc and Cons Spend
5/29 8:30 ET Core Inflation
5/29 9:45 ET Chicago PMI

Moderator Jane
Feb 5, 2012 - 12:04am

re: Web Outage

For TMFR, it was not the "zero-day exploit" that was causing the problem. It was a combination of things, including people from Korean IP addresses trying to hack into the site, bots coming from China, other dubious visitors, and, at the same time, Google's bots devouring large chunks of resources all of a sudden. (OK, granted, maybe those Korean hackers were trying to exploit the "zero-day exploit," but they were unable to do so.)

Now, if you want to speculate on Google's apparently elevated interest in PM could...or it could just be that they put this particular site up to a higher search engine priority, due to the site's popularity. Regardless, their bot algorithms are inefficient resource-hogs.

Gold Five
Feb 4, 2012 - 11:22pm

Re: Web outage

There's no consipracy. There's a "zero-day exploit" in certain versions of PHP that's being used to take out sites all over the net this week. I'm busy updating my sites right now :-)

Feb 4, 2012 - 11:16pm

Web outage

Now is down? I smell a rat...

SmiddywessonMariposa de Oro
Feb 4, 2012 - 8:52pm

@Mariposa de Oro

Very kind words. Thank you very much.

This is the most difficult time in the history of man to try to understand the most difficult and complex topic in the history of man, the markets.

Hat tips to all you crazy misfits who refuse to accept the party line like the normally adjusted primate and keep on learning what's out there and digging into what's not. You are the true heroes of your age. There's no accolades or metals in it for you. You won't be popular. In fact, people will consider you eccentric at best. But to me, it's worth it. I want to know everything. I know I can't get there, but that's all I want. Money would be nice too, and slinky sex slaves, but let's save that for another forum.

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Key Economic Events Week of 5/25

5/26 8:30 ET Chicago Fed
5/26 10:00 ET Consumer Confidence
5/27 2:00 ET Fed Beige Book
5/28 8:30 ET Q2 GDP 2nd guess
5/28 8:30 ET Durable Goods
5/29 8:30 ET Pers Inc and Cons Spend
5/29 8:30 ET Core Inflation
5/29 9:45 ET Chicago PMI

Key Economic Events Week of 5/18

5/18 2:00 ET Goon Bostic speech
5/19 8:30 ET Housing starts
5/19 10:00 ET CGP and Mnuchin US Senate
5/20 10:00 ET Goon Bullard speech
5/20 2:00 ET April FOMC minutes
5/21 8:30 ET Philly Fed
5/21 9:45 ET Markit flash PMIs for May
5/21 10:00 ET Goon Williams speech
5/21 1:00 ET Goon Chlamydia speech
5/21 2:30 ET Chief Goon Powell speech

Key Economic Events Week of 5/11

5/11 12:00 ET Goon Bostic speech
5/11 12:30 ET Goon Evans speech
5/12 8:30 ET CPI
5/12 9:00 ET Goon Kashnkari speech
5/12 10:00 ET Goon Quarles speech
5/12 10:00 ET Goon Harker speech
5/12 5:00 ET Goon Mester speech
5/13 8:30 ET PPI
5/13 9:00 ET Chief Goon Powell speech
5/14 8:30 ET Initial jobless claims and import prices
5/14 1:00 ET Another Goon Kashnkari speech
5/14 6:00 ET Goon Kaplan speech
5/15 8:30 ET Retail Sales and Empire State index
5/15 9:15 ET Cap Ute and Ind Prod
5/15 10:00 ET Business Inventories

Key Economic Events Week of 5/4

5/4 10:00 ET Factory Orders
5/5 8:30 ET US Trade Deficit
5/5 9:45 ET Markit Service PMI
5/5 10:00 ET ISM Sevrice PMI
5/6 8:15 ET ADP jobs report
5/7 8:30 ET Productivity
5/8 8:30 ET BLSBS
5/8 10:00 ET Wholesale Inventories

Key Economic Events Week of 4/27

4/28 8:30 ET Advance trade in goods
4/28 9:00 ET Case-Shiller home prices
4/29 8:30 ET Q1 GDP first guess
4/29 2:00 ET FOMC Fedlines
4/29 2:30 ET CGP presser
4/30 8:30 ET Pers Inc and Cons Spend
4/30 9:45 ET Chicago PMI
5/1 9:45 ET Markit Manu PMI
5/1 10:00 ET ISM Manu PMI

Key Economic Events Week of 4/20

4/20 8:30 ET Chicago Fed
4/21 10:00 ET Existing home sales
4/23 8:30 ET Weekly jobless claims
4/23 9:45 ET Markit flash PMIs
4/24 8:30 ET Durable Goods

Key Economic Events Week of 4/6

4/8 2:00 ET March FOMC minutes
4/9 8:30 ET Producer Price Index
4/10 8:30 ET Consumer Price Index

Key Economic Events Week of 3/30

3/31 9:45 ET Chicago PMI
4/1 8:15 ET ADP Employment
4/1 9:45 ET Markit manu PMI
4/1 10:00 ET ISM manu PMI
4/2 10:00 ET Factory Orders
4/3 8:30 ET BLSBS
4/3 9:45 ET Market service PMI
4/3 10:00 ET ISM service PMI

Key Economic Events Week of 3/23

3/24 9:45 ET Markit flash PMIs
3/25 8:30 ET Durable Goods
3/26 8:30 ET Weekly jobless claims
3/27 8:30 ET Personal Inc and Spending

Key Economic Events Week of 3/9

(as if these actually matter)
3/11 8:30 ET CPI
3/12 8:30 ET weekly jobless claims
3/12 8:30 ET PPI
3/13 8:30 ET Import Price Index

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