Hyperinflation Watch, September 6, 2021 - Part 2

Part 2:

Precious Metals Market Drivers – MEDIUM. At some point, the COMEX and other markets must crack. Stress in these manipulated markets has been high for over half a year – however, it may yet take more time for the dam to burst. Just a few manufacturers securing working inventory could force the COMEX into an untenable position in silver. In gold, countries around the world are securing large amounts within their own borders.

Economic Crash – MEDIUM. We are at unprecedented highs in the market. In an ordinary market, this would be a sign of a coming crash. However, in a central-bank driven market, this is more likely a sign of excessive M1 (money supply), which is why the Fed has eliminated M1 measurement reporting now – it would be too embarrassing. This is a pre-hyperinflationary indicator. If a crash were to happen, the Fed would immediately respond with expansionary credit and “reflate” the popped bubble. After all – they’ve been doing it for decades now. HOWEVER, the recent Evergrande crash could easily upset the China bubble, which if left unchecked could disturb the US bubble until more printing occurs.

Money Printing – LOW. Fed printing will not stop, but while ultimately it is the root cause of the entire coming mess, it will not be the flashpoint. However – inflation will rise in accordance with the money supply, so the more they print, the faster it happens. Watch this space to get an idea of inflation rates in real time.

Fiscal Budget Event / Spending Bills – LOW. Separate from the Fed’s actions, the government’s plans to create trillions more stimulus and pass the budgets currently will likely be a non-event. Every year, a budget crisis appears imminent in the August to September time frame, but a resolution is eventually found – in our view, this is just politicians making drama for cameras for re-election.

Bank Runs – LOW. Rumors of mass withdrawals are spreading, but at this time, we think the risk of a run is low. However – this can instantly be changed should the government try to do a bank holiday and forestall a run.