Warning Signs of Inflation

Although many economists say the signs of inflation are already here, most Americans don't believe there is a serious risk of hyperinflation occurring by the end of this decade.

Many economists in the United States say that there are many warning signs that indicate widespread inflation is already here today, but that most Americans simply don't recognize them. Some believe there is a serious risk of hyperinflation occurring by the end of this decade, however even the most optimistic think there is a real possibility of a full-fledged outbreak of hyperinflation by the end of 2015. Unfortunately, inflation affect every sector of the economy and those that don't take the proper steps to prepare for it will likely see the majority of their savings and purchasing power wiped out as a result. In case you are among those that are still waiting for confirmation of the threat of rampant inflation here in the U.S., we have prepared a list of warning signs that inflation may be right around the corner.

Warning Signs of Inflation:

The Federal Reserve is buying U.S. treasuries
Foreign bank purchases of U.S. treasuries dropped from 50% down to 30%, and Federal Reserve purchases of U.S. treasuries have grown from 10% up to 70%, showing that U.S. government deficit spending is leading to inflation that has the potential to destroy our standard of living.

The Private Sector is not purchasing U.S. treasuries ñ 
The U.S. private sector has stopped buying U.S. treasuries and is getting rid of government debt as evidenced by the fact that the single largest private sector owner of U.S. government bonds has just reduced its U.S. treasury holdings down to zero.

China wants to stop using the U.S. Dollar as reserve currency
The U.S. dollar is no longer backed by the gold that made it the world's reserve currency and as the world's largest manufacturing base, China is now taking steps to set up the Chinese Yuan as the world's new reserve currency.

The Federal Reserve Funds rate is near zero
Because the Federal Reserve has held the Reserve Funds Rate at 0.00-0.25% since December of 2008, the world is now flooded with an excess of U.S. dollars.

Record deficit of $222.5 Billion
The U.S. government reported a record budget deficit of $222.5 billion this February with an annualized basis of $2.67 trillion and economists warn that future annual budget deficits will surpass $2.67 trillion within the next three years.

Largest bond interest payments
With the national debt now exceeding $10 trillion, we could see interest the payments reach over $1 trillion somewhere around mid-decade.

Interest payments of $1 trillion will equal 30% to 40% of government tax receipts, and no nation on earth has ever seen interest payments on their debt reach 40% of tax receipts without resulting in hyperinflation.

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