The Invisible Crash.

This is a term that has been applied by the Oxford Club Economists to describe what is happening today.

What is this "Silent Crash?"

The Obama regime's Economists talk about a "recovery" as they look at the scene. A lot of people see the crash coming, but few know that it is already happening. First, let's look at the adjusted bank reserves. This graph tells us that bank reserves increased by a factor of ten! That means that monetary inflation is rampant.

 

The regime's supporters are quick to point out that that prices have not changed much. In fact, they point to the DOW as proof that their policies created a recovery. That is deceptive. The US Dollar has lost over 90% of its purchasing power during the last 100 years and is headed for more Trouble.

 

The supporters of the Obama regime and the FED claim success in inflating the DOW 45% from 2009 to 2012. In terms of gold, however, the DOW is down 16%,and in terms of metals in general it is down 21%. In terms of cotton, the DOW dropped 16%,and 14% in terms of dairy and 46% in terms of oil.

We as yet do not see a general inflation in general prices and this is due to the "Time Lag Effect of Price Inflation." Businesses are reluctant to pass on the increases in commodities, but the day will come when they have no choice. Then prices will explode. And bonds and Treasuries will lose their value almost overnight. Stocks in general will lag inflation.

All this will be made worse if we fall off the fiscal cliff or there is a grand bargain to raise taxes and leave Obamacare in place.