Financial Advisor Gives Excerpts from His New Book on Economic Consequences

Grand Rapids, MI -- (SBWire) --05/18/2011 --When financial advisor Dennis Tubbergen isn’t advising his own clients, mentoring other financial advisors or hosting his talk show The Everything Financial Radio Show, he can usually be found writing. Along with the writing tasks involved with his monthly newsletter Moving Markets™, Tubbergen has been devoting some time lately to writing his third book.

“I just finished a book with the title Economic Consequences,” states Tubbergen. “It deals with the possible consequences of bad economic policy.”

Tubbergen explained in an earlier excerpt from the book that in his opinion much of the world has reached its capacity for debt. And as Tubbergen notes, debt has its consequences. In the book Tubbergen shares insights from several experts who study the economy and the financial industry, including economist John Williams.

“Mr. Williams, whom I introduced in Chapter 4 of my book, believes that the policies of the Federal Reserve will lead to inflation, even hyperinflation.”

Tubbergen goes on to explain that on November 10, 2010 Williams released a commentary discussing the potential effects of the Federal Reserve’s quantitative easing program.

“In the commentary, Mr. Williams stated that it was his belief that the process of quantitative easing was a process that was going to be difficult to get away from,” cites Tubbergen.

“In fact, it is his opinion that the process will have to be accelerated as time passes due to the fact that the more the Federal Reserve prints money, devaluing the U.S. Dollar, the more likely that investors holding U.S. Government debt and U.S. Dollars will be to dump these U.S. Dollar-denominated assets for assets based in some other currency.”

This, according to Williams, is one of the conditions that must exist before the United States’ economy evolves “into an unthinkable hyperinflationary great depression.” According to Tubbergen, it is the view of Williams that the United States is fundamentally insolvent and the policymakers are likely to deal with the issue by printing money rather than make another choice.

“Williams is predicting the beginning of hyperinflation as early as 2011 and no later than 2014,” warns Tubbergen. “He adds that this type of inflation will be the worst possible kind, inflation that appears due to economic policy rather than consumer demand.”

In a special report that Williams issued in December of 2009, he stated that it was his view U.S. citizens would experience a hyperinflationary great depression, a collapse in the purchasing power of the U.S. Dollar, a collapse in the normal stream of U.S. commercial and economic activity, a collapse of the financial system as we know it, and a possible realignment of the U.S. political environment.

“Interestingly in this special report, Williams noted that the Greenspan Federal Reserve made a decision to borrow against future production to fuel the economic expansion that occurred over a 10-year time frame,” adds Tubbergen. “Actually, those words are my paraphrase of Mr. Williams.”

Williams is quoted as saying, “Recognizing that the U.S. economy was sagging under the weight of structural changes created by government trade, regulatory and social policies – policies that limited real consumer income growth – Mr. Greenspan played along with the political and banking systems. He made policy decisions to steal economic activity from the future, fueling economic growth of the last decade largely through debt expansion.”

“Mr. Williams draws a parallel between the banking crisis of 2008 and the banking system collapse of the early 1930s when bank depositors lost their assets,” claims Tubbergen. “This 1930s event intensified the Great Depression and began a period of deflation that lasted for years.”

Tubbergen goes on to explain that in 2008, in William’s view, a decision was made to avoid a deflationary depression and save the banking system at all costs by having the Federal Reserve print money.

“Mr. Williams states that it is his opinion that government will continue to spend until the financial markets rebel,” adds Tubbergen. “When that happens, Williams says the result will be inflation and continued debasement of the U.S. Dollar.”

Williams also notes that since the complete abandonment of the gold standard in 1971, making the U.S. Dollar a true fiat currency, that deflation has not existed. Instead, only persistent inflation has been seen. Williams also claims that hyperinflation will likely be the outcome of our failed economic policies and excess debt because the U.S. Dollar’s link to gold is gone. Williams adds that because there is no way to impose discipline on our policymakers, they will make the wrong choice and continue to print money, causing hyperinflation.

“Newsletter publisher and economic commentator Marc Faber agrees,” claims Tubbergen. “He stated during a CNBC interview that the United States is in danger of Zimbabwe-style hyper-inflation. If you aren’t familiar with what happened in Zimbabwe, the government there made the decision to continue to print money until the supply was huge and the demand was virtually non-existent.”

According to the Cato Institute, prices in Zimbabwe doubled every 24.7 hours from the beginning of the hyperinflationary cycle until the Zimbabwe Dollar was officially declared dead and it became legal to trade in U.S. Dollars.

“Faber stated in the CNBC interview that he thought it was possible for the United States to experience 200 percent annual inflation,” concludes Tubbergen. “Faber stated if he looks at government debt in the U.S., and debt in general, the only way they will not default physically on their debt is to inflate.”

Sobering, isn’t it?

To read more about Tubbergen’s opinions on the economy and to view more excerpts from his new book, go to his online blog at http://www.dennistubbergen.com.

Dennis Tubbergen has been in the financial industry for over 25 years and has his corporate offices in the USA Wealth Management Building in downtown Grand Rapids, Michigan. Tubbergen is CEO of USA Wealth Management, LLC and his weekly talk show The Everything Financial Radio Show is simulcast on two Michigan metro stations and also airs to over 600,000 financial advisors, with recent podcasts available athttp://www.everythingfinancialradio.com.

The opinions expressed herein are those of the writer and not necessarily those of USA Wealth Management, LLC. This update may contain forward-looking statements, including, but not limited to, statements as to future events that involve various risks and uncertainties. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual events or results to differ materially from those that were forecasted. Therefore, no forecast should be construed as a guarantee. Prior to making any investment decision, individuals should consult a professional to determine the risks, costs, benefits and fees associated with a particular investment. Information obtained from third party resources is believed to be reliable but the accuracy cannot be guaranteed.