Aftershock: Protect Yourself and Profit In The Next Global Financial Meltdown, Second Edition

Why Don’t More People See the Threat of Inflation? Because Inflation Is as Hard to See as the Housing Bubble Before It Popped

We believe the reason more people don’t see the threat of future inflation (which will bring down the dollar bubble) is because the threat of inflation before it begins is as invisible to most people as the threat of the rising housing bubble was before it popped. When home prices were going up, almost nobody saw the bubble and few people paid attention to us when we warned about it in our first book. Even most financial analysts and economists denied there was a housing bubble, or at least much of one. Rapidly rising home prices were considered no more than just “a little froth on the coasts,” as Alan Greenspan put it so mildly.

It is the same for the threat of future inflation. Few people see it. In fact there is still some debate over whether we might be heading for deflation, not inflation (see the sidebar titled “Inflation or Deflation?” later in this chapter). So, the authors see the massive money printing and the inflation it will cause as the hidden “housing bubble” of today. In fact, eerily, the timing of the coming inflation won’t be all that different from the popping of the housing bubble. Although the housing bubble started to pop in the summer of 2005, it really didn’t melt down until fall of 2008—about 3½ years later. That’s within the general timeframe that we see future inflation kicking in (see “Exactly When Will Inflation Begin?” later ...