Deflation – decrease in the supply of money and credit relative to the amount of goods, services, and investments available. Usually results in prices falling as measured in the currency unit.

Inflation – increase in the supply of money and credit relative to the amount of goods, services, and investments available. Usually results in prices rising as measured in the currency unit.

Since 1913, the date the criminal Federal Reserve act was passed birthing the dictatorship of currency now enjoyed by the Federal Reserve crime syndicate, the value of the dollar has collapsed 95%. We have suffered a steady diet of inflation. One brief exception occurred during the 1929-1932 beginning of the Great Depression. Dollars bought more stuff during that time, by almost a factor of 10. Imagine buying a car tomorrow for $3000 that would have cost you $30,000 a week earlier. Sign me up for the $8000 Porsche Cayenne, and maybe throw in a Cayman as well!

While I foresee more inflation directly ahead, we could then get a shock of money supply collapse from credit defaults across the board. Combat this deflation factor, is the potential collapse in value of the U.S. dollar. Since all currencies are valued against each other, there is no firm measuring stick. It is all relative. Relatively – the dollar is dropping below long-time support at 78 and moving toward the danger line of 72 on the USDX. We could see fireworks in the commodity markets especially gold and silver if the dollar crosses below 72 for a few days.

My opinion is that we will have inflation first, followed by a snap reaction from the fed, precipitating credit defaults across many markets, then a wage of deflation. Very little will be left standing financially. Gold will be among the strongest instruments along with some Asian currencies.

Gird for stormy weather directly ahead.

The Fed’s primary purpose is profit for it’s owners. They profit in resources collected and funds stolen. That may have run it’s course, or maybe they do not want to let the dollar fall yet. Perhaps they have another plan ready to enact it. Or maybe they have all the resources they want. If they are willing to collapse the currency, then hyperinflation is in store. If they want to preserve their power, then deflation is our curse.

In either case, gold plays a role, as does agricultural investing. Then currency and bonds will be a backstop.