Once again we see a display of ignorance towards all things Gold and inflation on Fast Money, which in reality equates to “Lose Money” if you follow their advice on precious metals.
Vic Sperandeo is a 40-year trading veteran who has traded for the likes of George Soros and Leon Cooperman. You can see the video clip here. Vic makes the point that few people fail to grasp. When a nation becomes over-indebted, unless it can grow its way out then hyperinflation results. It is important to note that it results from economic weakness (and deflation!) and not excess bank lending, etc. In the 1940s we were able to grow our way out. This time around, policy makers are banking on that recovery while we know it is unlikely without a major war.
Some panelist questioned if Ben Bernanke could do something because of “the tools in his arsenal.” I recognized this fellow because he was the same guy who, about a year ago displayed tremendous ignorance in saying that Gold wouldn’t do well because we don’t have wage inflation. Such stupidity is a testament to today’s Joe Wall St Trader who thinks the Fed controls and decides everything. Hey buddy, raising rates doesn’t mean jack chit if you are bankrupt and no one wants to lend to you. How did raising rates work out for Zimbabwe?
Now, I’m not saying we will have hyperinflation….severe inflation me thinks, but not of the German and Zimbabwe kind.