On Jan. 5, economic analyst John Williams of ShadowStats spoke with Greg Hunter in a recent interview regarding events for 2014, and the coming financial crisis forecast for this year. During the 30 minute interview, Williams confidently predicted that this will be the year that hyperinflation begins to occur in America, primarily due to a dollar panic event sparked when foreign holders of dollar assets begin to dump them back to the U.S. and the Fed monetizes trillions of dollars in an attempt to absorb those assets.
Greg Hunter: And what about the dollar panic? You think at some point this year that there is going to be a dollar panic? You don't know when, but you think people will be panicking out of the dollar?
John Williams: I would say that is the proximal trigger of starting the much higher inflation, and moving us into the early stages of hyperinflation.
GH: And you are calling for a dollar panic in 2014?
JW: Yes. I can't tell you if it's going to be next week... it could be. I would expect it in the early part of the year as opposed to the latter part of the year.
What we have working through the system here, are all the problems from 2008. They generally have no been resolved... they were plastered over and pushed into the future. Along with all the issues in the global markets about wanting to hold the dollar... it's a confluence of factors, almost a perfect storm. - USA Watchdog
Walter J. "John" Williams was born in 1949, and received an A.B. in Economics, cum laude, from Dartmouth College in 1971. He was awarded a M.B.A. from Dartmouth's Amos Tuck School of Business Administration in 1972 where he was named an Edward Tuck Scholar. During his career as a consulting economist, John has worked with individuals as well as Fortune 500 companies. His long standing website, ShadowStats.com, uses pre-Clinton era methodologies to determine true economic indicators based on the same methodologies used in the U.S. during the Great Depression, World War II, and the decades following.
John Williams is not the only economic forecaster to believe that 2014 will see a major financial crisis that will threaten the dollar, and perhaps usher in a new global currency structure. Dr. Jim Willie, an statistician from Carnegie Mellon, forecast that 2014 would see a global currency reset, and the introduction of a new gold-backed trade currency that would remove the dollar as the reserve currency in international trade.
2013 was the year of preparation for many industrialized nations, including 23 which have created new Swap Lines outside the dollar, to begin a transition into a new financial structure and away from U.S. hegemony. Beginning in September of 2012, when China and Russia forged a new alliance where nations around the world could buy or sell oil in currencies other than the dollar, new trade pacts in the Far East and amongst the BRICs nations have sprung up which allow for a bypassing of the dollar in direct trade for over 40% of the global population. These new alliances create an environment ready for an instantaneous transition to a new global economy and currency, and a 'de-Americanized' world.
In August of last year, China and Japan dumped $42 billion in dollar assets onto the market, and the financial upheaval from that small amount was enough to cause former Fed Chairman Ben Bernanke to end rumors of a September taper, and instead shock the world by continuing QE at $85 billion per month. The $42 billion sold by both China and Japan was the most dollar assets they had dumped in many years, and represent only a small percentage of the several trillion each nation currently holds in Treasuries and other assets. Should each nation, especially as their own economies begin to recede in economic growth, choose to sell much greater amounts of Treasuries in a short amount of time, it will trigger the dollar panic event John Williams predicts for 2014 and cause the Fed to increase QE to much higher levels, thus creating the hyper-inflationary event he ultimately sees for America this year.