Lots of people are anxiously waiting for life to return to the way it was before the pandemic. Unfortunately, there has been so much structural damage to the economy that this is not likely to be happening any time soon.  In fact, America could be facing a hyperinflationary Great Depression.

That’s the opinion of John Williams, an economist widely known for his analyses of government economic statistics on the Shadowstats.com website. 

It should be noted that many of Williams’ views are alternative and in stark contrast to those of large Wall Street firms.  It should also be noted that Williams has both a BA and an MBA in Economics from Dartmouth.

Shadowstats is probably best known for its interpretation of statistics about inflation.  Back in the late 1990s, the government made major changes to the Consumer Price Index in order to limit cost of living adjustments to Social Security payments.  Williams believes that as a result of those changes, the Consumer Price Index does not accurately gauge the real rate of inflation. 

Williams is not the only one who has come to this conclusion.  Bill Gross, a Wall Street guru, has echoed this view and so have some senior economists at the US Bureau of Labor Statistics.  Probably many armchair analysts would agree with them.  While official statistics show that the rate of inflation has been at or near record lows for years, it’s common knowledge that the prices of new homes, college education, and health insurance, among other items, have been going through the roof.

Williams believes that the new vaccines about to be released will not be the magic bullets for the economy investors are hoping for.  “Put all the political turmoil aside for the moment,” he told USA Watchdog.  “The markets response (to the COVID-19 vaccines) is that they are going to turn the economy around.  My point is they are not going to get the economy back to normal any time soon.”

Economic Damage

Since the pandemic erupted earlier this year, tens of millions of people have lost their jobs and tens of thousands of businesses have closed – many permanently.  These problems continue to worsen as the virus continues to spread across the country. 

As a result, regardless of which candidate eventually is declared the winner of the 2020 Presidential election, there has been so much damage to the economy that the government will be forced to come up with another stimulus program.

Both President Trump and former Vice President Biden agree about the need for one to help individuals cope.  But businesses also need help to stay afloat.  And states and cities will have to make drastic cuts to their budgets unless the government bails them out. 

But Trump and Biden don’t agree about this.  “Where it gets really scary is if the Democrats take control of the House and the Senate as well as the White House,” says Williams.  “The stimulus then is going to be unbelievable.

“The more radical Democrats just want to print money and spend and not worry about the consequences. There is going to be more deficit spending no matter who gets into power; it’s just a matter of how radical this spending will be.  The more left we go, the more rapid will be the demise of the dollar.  Eventually, there will be hyperinflation in the United States.  There is no way we are escaping massive stimulus for at least the next year and into 2022.”

Ongoing weakness in the economy, growing government deficits, and huge new stimulus programs are exacerbating the government’s deficit problem.  “What I am looking at here is this evolving into a hyperinflationary Great Depression.” 

Despite the spending, Williams believes there is a way for people to preserve their dollar-based assets and that’s by “converting their dollars into physical gold and silver and just holding on to them,” he says.  “They will retain their value over time as opposed to paper dollars that will effectively become worthless. 

“You’ll be getting a lot of money from the government and they will keep giving you more and more but this is going to create an environment of rising inflation.  Hyperinflation is a form of default and will bring political disruption.  Gold is telling us that hyperinflation is straight ahead.  When the Fed finally gets the more than 2% inflation it wants, the real inflation rate will be 12% to 15%...Hyperinflation happens quickly.”

Williams is certainly not the only economist or Wall Street analyst who recommends shifting assets from paper (fiat) money to precious metals like gold and silver. Other analysts believe cryptocurrencies is the place to be. 

Take A Look At Bitcoin

Bitcoin is the best-known cryptocurrency; it’s also an example of how incredibly volatile and risky these vehicles are.  In 2010, the low was just a fraction of one cent. But by December 2017, it made an all-time high of nearly $19,800.  After that the trend reversed and the price crashed to $3,200 in December 2018. 

On November 25 of this year, Bitcoin was above $19,500 again, and just when it seemed like it would challenge the all-time high, it crashed to $16,300 overnight.   

Ethereum, another cryptocurrency, also took its purchasers on an incredibly wild roller coaster ride. In December 2015, Ethereum could be purchased for just $0.42 -- less than a half buck.  But in January 2018, it was nearly $1,433.  Fast forward to March 2020 and it was down to $104.  But on November 25 it was nearly $600. 

Cryptocurrencies obviously appeal to a lot of people, but just as evident is the fact that they are not suited to the faint of heart or for anyone who can’t afford very sudden and extreme losses in their portfolio.  Like gold and silver, cryptocurrencies have been getting increased attention on financial websites, and various well-known gurus have voiced very bullish opinions about them. 

Williams’s concern about a hyperinflationary depression should be considered carefully.  However, this is only one man’s opinion and not Torah m’Sinai.  Hopefully it will never materialize.  Nevertheless, the unexpected can and often does happen on Wall Street.  Anyone who doesn’t believe this should simply recall all of the events of 2020.


Sources: bloomberg.com; 
coinmarketcap.com; cointelegraph.com; 
shadowstats.com; tradingview.com; 

Gerald Harris is a financial and feature writer. Gerald can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it. 

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