Inflation Coming

One of the sites we regularly follow is the National Inflation Association. We aren't saying that everything they print is true...but we are saying that some of articles appear to be loaded with common sense. Of course their mission is to prepare Americans so that they can survive the hyper-inflation that they are 100% certain is coming.

Now, with that being said, a few days ago we did a post on WHAT IF CHINA DUMPS OUR DEBT. The article asked a simple question of what would America do if China just walked away from their U.S. Treasuries and started cashing them in and refused to loan us any more cash?

Today I was reading an article at NIA and ran across this paragraph;

If the Federal Reserve continues down the path it is currently on, not only will China allow the yuan to rise to a free market determined level, which will send China's food inflation crisis back to the U.S., but China is likely to dump their U.S. treasury holdings that they are currently hoarding. China's foreign exchange reserves rose by $199 billion last quarter (its largest quarterly gain in 15 years and 78% higher than analyst estimates of $112 billion) to a record $2.85 trillion for total growth in 2010 of 18.7%. Most likely, about 2/3 of these reserves are in U.S. dollars. Americans have been deceived by the U.S. government and the mainstream media into believing the U.S. economy is recovering, because the U.S. has been enjoying the benefits of inflation without the consequences of rising prices. When the U.S. bond bubble begins to burst and these trillions of dollars being hoarded come home to roost, inflation will become the primary concern of all Americans.

See it here; http://inflation.us/obamamisinformingpublic.html

So what does this mean in layman's terms? Right now there are trillions of dollars sitting all over the world...because our currency has been more stable than most ever since WWII. If that changes, because of a loss of faith and confidence...those trillions of dollars will come back to America to be cashed in and exchanged for something deemed more secure. When that happens....you could see massive inflation.

Will it happen? Who knows. Could it happen? Yes it could.

I look at it as just one more trigger that could shoot over the first dominoe and start the whole thing falling.