Gold, Silver & Hyperinflation As We Head Into 2014

"No one, except those steeped in Austrian economic theory, fear the consequences of too much money creation, which means that money creation will continue until it is obvious to all that excessive money creation causes still more problems.

Until then, we can expect massive money creation from all central banks, perhaps not all at the same time and perhaps not at the rate that economists outside the central banks want, but it will come, sometimes in spurts, sometimes in massive quantities.

Still, when central banks announce money creation programs, there are economists, columnists and academicians who say it's not enough, regardless of the amount announced.  Paul Krugman, famed New York Times columnist and recipient of the 2008 Nobel Memorial Prize in Economic Sciences, is the most prominent economist who has called for money creation in amounts way beyond what have been created.  At one point in the midst of the World Financial Crisis bailout, Krugman called for the creation of $10 trillion.  Such is the belief that money creation is the answer to financial and economic woes.

Worse, though, is the silence about the dangers of too much money creation.  No one in the mainstream ever registers any opposition.  The word hyperinflation is never used.

Getting specific about money creation, European Central Bank president Mario Draghi recently declared that an interest rate increase in the European Union was “off the agenda.”  Further, rate setters on the governing council in Frankfort, where the real power lines in the EU, declared their “... resolve to keep monetary policy ultra loose far into the future.”  There is even talk of charging banks in the EU a levy for holding “excess reserves” with the ECB.  The reasoning behind “negative interest” to ECB member banks would be to stimulate bank lending, which further increases the money supply.

In Japan, the Bank of Japan and the government are working hand in hand to achieve two percent inflation, with the BoJ doing the printing and the government doing the spending.  Presently, the price inflation rate in Japan is running at 1.61%, which means that still more money creation lies in Japan's future.

In the UK, the Bank of England is keeping interest rates at historic low levels, despite calls outside the BoE for tighter monetary policy.  Bloomberg editorial board member Marc Champion says that a tighter monetary policy would be an act of “madness.”  No fear of too much money creation by Mr. Champion, who notes that in the UK ".  “... real wages have been falling, inflation is decelerating and the country's economy is still smaller than it was in 2008.”  The U.K.’s third quarter growth was only 0.8 percent.  No wonder Keynesians are calling for loose monetary policies..."

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