What Hyperinflation reads like; "Venezuelan shoppers amass outside seized stores" "Venezuela Stock Market Up 454% for the Year"

"As soon as Dorisbell Pena received a text message informing her that President Nicolas Maduro seized control of a nationwide chain of appliance stores Friday, she rushed to the nearest outlet in the hopes of finding what's become one of the scarcest items of all these days in Venezuela: a bargain.

A 34-year-old teacher, Pena has watched as the price of a new stove she needs has doubled in recent weeks to 40,000 bolivars even as her 2,500 bolivar-a-month salary stays the same.

"I've got to take advantage of this opportunity today because tomorrow the prices keep going up," Pena said while huddled among friends on the concrete sidewalk outside the Tiendas Daka store in the eastern Caracas neighborhood of Bello Monte.

She's not alone. At 1:30 a.m., shoppers were still arriving to join the hundreds who began amassing in the afternoon after price inspectors said they found evidence of "usury" and Maduro ordered the chain's "occupation." In a televised address Friday night, the president vowed to reopen the stores Saturday and unload their stock of plasma televisions, washing machines and other seized merchandise at "fair prices."

..."I heard the owners of this store don't even live in Venezuela, they're in Miami," said Solano, a 49-year-old salesman of engine varnish...

"Leave nothing on the shelves, leave nothing in the warehouses," he said. ...he also ordered the military to shut down businesses found hoarding products or speculating on prices.

The Friday night frenzy, described by one bargain hunter as an "organized looting," cut across Venezuela's normally insurmountable political divide — a reflection of how near-record 54 percent inflation and shortages of basic goods such as milk and toilet paper are affecting all families in South America's biggest oil producer.

Come nightfall, National Guardsmen, some brandishing assault rifles, helped maintain order..."

http://news.yahoo.com/venezuelan-shoppers-amass-outside-seized-stores-134255341.html

"Venezuela Stock Market Up 24% For Week -- Up 454% for the Year

Athenian money…defined a pattern
which was to repeat in other empires which were to follow
dominance of trade
influx of gold to balance exports
public wealth
liberty
overconfidence
the discovery of loosely managed money
as a stimulating solution to stagnation in an economy near its zenith…
before finally the emptiness of the monetary promise was exposed
leading to rapid national collapse

 

Paul Tustain

The Venezuela Stock Market is now up 454% for the year to date in bolivar terms, though only 278% in official rate dollar terms because of a February devaluation, but still making it the best performing stock market in the world."

http://www.laht.com/article.asp?ArticleId=1145054&CategoryId=10717
.
.

What does Quantitative Easing mean?

When national debts have once been accumulated to a certain degree

[there has never been] a single instance

of their having been fairly and completely paid

The liberation of the public revenue...

has always been brought about by bankruptcy

though frequently by a pretended payment [through inflation]

Adam Smith

Moral philosopher and Father of Modern Economics

If Germany’s central bank suspended the right
to redeem gold backed Reichsmarks during World War I
and 170 Reichsmarks bought an ounce of gold in January 1919,
why did an ounce of gold cost 87,000,000,000,000 Reichsmarks
in November 1923?

Ponzi finance units must increase its outstanding debt

in order to meet its financial obligations

A transition occurs over the course of an expansion

as increasingly risky positions are validated by the booming economy

that renders the built in margins of error superfluous

encouraging adoption of riskier positions

Eventually, either financing costs rise

or income comes in below expectations

leading to defaults on payment commitments

"frequently by a pretended payment [through inflation]"

Hyman Minsky

 

The United States is doing the same thing, except we have the world's reserve currency at the moment.  When Venezuela's currency becomes worthless, the population will most likely adopt the US Dollar as a means of commerce, much like the black market does currently.

 

Next up may be Argentina, Vietnam or some other more centrally run nation who are functionally bankrupt as we are, but without the military firepower and financial infrastructure.  Having oil and other commodities priced in US dollars is key to maintaining a better position than Europe, Russia and China.

A Money Riddle; Vault Cash and Savings Deposits

http://research.stlouisfed.org/fred2/series/TLVAULT

If there’s about $62.325 Billion in Vault Cash, and 100 million savings account holders wanted $1,000 each at the same time from more than $7 trillion in savings deposits, where would the $100 billion come from? 

http://research.stlouisfed.org/fred2/series/WSAVNS

If there's really not more than $7 trillion "saved" in our nation's banking system, where's the money?

If there was about $50 billion in Vault Cash in 2010 along with about $4.5 trillion in savings, and Vault Cash only went up about $13 billion since while savings rose about $2.5 trillion...?

"...Fed Chairman. Mr. Bernanke...delivered two massive distortions:"

"This past Sunday on the CBS program "60 Minutes", ...Fed Chairman. Mr. Bernanke...delivered two massive distortions:
 
Lie #1 - The Fed isn't printing money. Bernanke stated: "The amount of currency in circulation is not changing...the money supply is not changing in any significant way. What we're doing is lowering interest rates by buying Treasury securities." Given that it is the Treasury Department's Bureau of Engraving and Printing, not the Fed, that actually prints paper money, his statement is technically correct while substantively false. However, Bernanke is buying bank assets with Fed credit. With such an arrangement, printing becomes unnecessary.
 
...His stated purpose is to boost bond prices and lower yields in order to stimulate borrowing and aggregate demand. So pushing up bond prices is an act of inflation. Bernanke similarly contradicts himself by saying that he isn't creating inflation, while at the same time claiming that his easing campaign is designed to boost asset prices to combat the phantom of deflation.
 
...the Fed is causing money supply to increase significantly. The compounded annual growth rate of M2 is over 7% in the last quarter. Apparently in the eyes of the Chairman, a 7% annualized increase in the broad money supply isn't considered significant.
 
Lie #2- Bernanke is "100 % confident" that, when necessary, the Fed can control inflation and reverse its accommodative monetary policy. He stated, "We've been very, very clear that we will not allow inflation to rise above 2 percent. We could raise interest rates in 15 minutes if we have to. So, there really is no problem with raising rates, tightening monetary policy, slowing the economy, reducing inflation, at the appropriate time."
 
...In claiming he is 100% confident in his ability to control inflation, Mr. Bernanke ignores the record that during his tenure he has misdiagnosed the economy.
 
...Bernanke was completely unaware that the Fed actions had created an economy that had become completely addicted to artificially-produced low interest rates and inflation.
 
Shortly after the collapse of the real estate market and the ensuing truncated deflationary-depression, Bernanke took interest rates to near zero percent.
 
...the U.S. economy has become more addicted to free money than at any other time in our history.
 
Commodity prices are soaring once again and the real estate market, banking sector, and the overall economy cling precariously on the arm of government induced bailouts and low interest rates.
 
...our government has massively increased its level of debt
 
Bernanke was accurate in saying that the economy is not expanding at a sustainable pace.
 
Of course, his prescription was the same as it always is; print more money in the misguided belief that inflation will lead to growth.
 
As such, he indicated that it's possible that the Fed may actually expand bond purchases beyond the $600 billion announced last month. (Remember that the $600 billion comes after the $1.7 trillion that has already been printed, which failed to produce anything much beyond a weaker dollar)."
 
Mike Pento