Crazy Economic Times Lie Ahead

A student of mine pointed out Arthur Laffer's June 11th article in the Wall Street Journal which includes the paragraph: SEE HERE
With the crisis, the ill-conceived government reactions, and the ensuing economic downturn, the unfunded liabilities of federal programs -- such as Social Security, civil-service and military pensions, the Pension Benefit Guarantee Corporation, Medicare and Medicaid -- are over the $100 trillion mark. With U.S. GDP and federal tax receipts at about $14 trillion and $2.4 trillion respectively, such a debt all but guarantees higher interest rates, massive tax increases, and partial default on government promises.

I added up some of the unfunded liabilities I knew about a few days ago and came up with around 56 trillion dollars. Laffer's figure of "over the $100 trillion mark" is downright scary. Laffer is being conservative when he only sees the potential for double digit inflation. The Fed's unwarranted and huge increase in the money supply ("The percentage increase in the monetary base is the largest increase in the past 50 years by a factor of 10 ..." ) certainly provides the fuel for a huge inflation. We can't say how quickly it will develop but develop it most certainly will. The question is how to protect your assets? This kind of inflation simply beggars those on fixed incomes and stresses most assets to the breaking point.