Hyper-hyperinflation possible?

[Madison320]

I'm wondering if we could get not just hyperinflation but hyper hyperinflation (ok I made that up) for two reasons. One is that the entire world holds dollars so if those dollars all came flooding back home it would be worse than if it was just a local event like Zimbabwe for example. Also since most transactions are electronic, it wouldn't take much time to unload all those dollars. I wonder if the combination of these two factors could cause the dollar to collapse faster than anyone thought possible. Maybe in a few weeks? Days?

[cbc58]

I have a hard time wrapping my mind around the probable process of dollars flooding home and what happens. I sat next to an older gentleman at dinner last night who said he had attended a talk by a well known financial analyst who said that it is not so much the money coming back, but if or when it makes it into the system. The velocity of money is very low, but if that takes off we're toast.

The Fed is buying pretty much everything now as I understand it so they must have a plan... People who hold dollars don't want it to collapse so it's in their best interest not to exit too fast... i.e. China.

I was also going to ask what happens to the stock market after the fiscal cliff gets settled??? short relief rally and then plunge?

[bxm042]

Good point. It could happen... very.. fast. Minutes?

[FindLiberty]

This ObamaNation intends to battle The Creature From Jekyll Island by continuing to throw fiat money at it 'till it chokes its self to death.

IMO, that won't work. It's insane to think more of the same will somehow produce a different result. But they seem be able to hide, postpone or prevent hyper-inflation.

They lie and deny, but inflation is still creeping up as the value of the USD declines. At some point we may start to see super-duper hyper-denial regarding inflation/deflation. Maybe they will throw us some big entertaining distractions too. Like a world war... yea, that has "worked out swell" in the past.

Wait, just how are all those dollars supposed to come floodin' back home? Like China's gonna' refuse payment but still manage to ship over huge boatloads of clothes and new shoes all stuffed with our hundred dollar bills or something?

I think that's unlikely. I can't see how they can dump our money back at our feet. On the other hand, they might refuse to take it.

I don't think the hyper-hyper thing will happen. IMO it will play out more like this:

The problems hit home when people (countries) a start switching to and/or demanding some other form of money if the USD is perceived as worthless.

To make matters worse, there are not enough non-gov (not fiat funded) productive jobs. Gov workers can receive raises and then pay higher taxes for a very long time if powered by propaganda and the fed's fiat money printing press.

They will toss around even more fiat dollars so that the great unwashed masses can still buy food (in an attempt to keep peace on the streets). Some people will begin to shrug, others will start to barter and eventually the gov/non-gov class distinction will get uglier.

Combined that with higher taxes and soon the tyrants will notice more and more useless eaters standing in the streets and identify them as the problem that needs to be eliminated. Think Greece. Then imagine where this leads... A very dark place indeed unless people can regain control of their government. There will be new Ponzi schemes and complex but flawed "new deals". Hopefully there is a workable solution. Maybe we need to reboot with the US Constitution and the first 10 amendments or so as the "kernel" algorithm for the federal government. The states would have to follow. Sound money would be required. The pain involved is so great that unimaginable to do anything like this, and instead just keep kicking the can down the road. Maybe they will add something to the water supply to help the masses forget to give a damn.

GEG's 'Creature From Jekyll Island' book does spell a similar scenario out (like the OP questions), but hyper-speed is debatable given all the pseudo "controls" in place.

...entire world holds dollars so if those dollars all came flooding back home...

You can bet that "our" US Military would be ordered to shoot off their hands and arms first, so they won't be throwing anything back ...at least not right away anyhow.

I think this slow motion fall of the US Empire will take decades to resolve, and maybe never achieve hyper-inflation or finally hit bottom at all. Or, maybe it only takes 24 hours to all melt down to nothing left standing above ground level, starting this Friday.

[cubical]

Define hyperinflation...

but yes it will happen imo.

[gerryb1]

It won't happen.

Who has cash?

It's all locked up in 401k, pension, etc. -- managed accounts. Where will the increase in velocity come from?

People are too dumb to understand the system, so it will be a slow decline like we have seen. There may be other events like 2008, but they will be papered over like always.

[heavenlyboy34]

If TPTB don't allow the debt to be liquidated, hyper-inflation is inevitable. I'm pretty sure even Keynesians agree with this. They just generally think that if they inflate enough, it will work out in the end. Aggregate games and various obfuscation tricks they employ make it look a lot nicer than it is.

[heavenlyboy34]

It won't happen.

Who has cash?

It's all locked up in 401k, pension, etc. -- managed accounts. Where will the increase in velocity come from?

People are too dumb to understand the system, so it will be a slow decline like we have seen. There may be other events like 2008, but they will be papered over like always.

QE infinity. ETA: pension fund raids are not going to go over well, but if things get bad enough and the propaganda machine works well, it's not entirely impossible. (not likely, but possible IMO)

[cubical]

It won't happen.

Who has cash?

It's all locked up in 401k, pension, etc. -- managed accounts. Where will the increase in velocity come from?

People are too dumb to understand the system, so it will be a slow decline like we have seen. There may be other events like 2008, but they will be papered over like always.

Who needs cash to bid up assets?

[Tod]

Define hyperinflation...

but yes it will happen imo.

Some people define it as >50%/month.

http://en.wikipedia.org/wiki/Hyperinflation