National Inflation Association

National Inflation Association: "In NIA's latest economic documentary 'Meltup', we said that the simple act of the U.S. government eliminating its $7.25 per hour minimum wage and implementing a new $7.25 per hour maximum wage for government employees, would go a long way in helping rebalance America's unstable economy. NIA is very pleased that California Governor Arnold Schwarzenegger appears to have watched Meltup. Schwarzenegger last week announced plans to cut pay for over 200,000 state employees down to the minimum wage of $7.25 per hour due to a budget impasse.

Although most expect these salaries to rise back up after California passes a new budget, NIA believes the only way California will be able to survive without a bailout from the Federal Government, is if these wage cuts are made permanent. In fact, if the U.S. government wants to have any hope of preventing and/or delaying hyperinflation from occurring by the year 2015, we believe the Federal Government will need to implement similar wage cuts on a nationwide basis within the next 24 to 36 months.

Both the U.S. dollar and Euro experienced a decline in their share of the world's foreign-exchange reserves during the first quarter of 2010. Meanwhile, central banks reported a 19% increase in the 'other currencies' category, which includes currencies like the Canadian dollar and Australian dollar. While many European countries are now making the right choice of implementing tough austerity cuts to counteract weakening demand for Euros, there have been no calls for major austerity cuts in the United States. Before long, NIA expects short-term confidence in the Euro to be restored, which could turn the U.S. dollar short-term bounce into a huge crash, exactly like NIA predicted in its top 10 predictions for 2010.