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Thread: Hyper-hyperinflation possible?

  1. #1

    Default Hyper-hyperinflation possible?

    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?



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  3. #2

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    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?

  4. #3
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    Good point. It could happen... very.. fast. Minutes?
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  5. #4

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    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.

  6. #5

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    Define hyperinflation...

    but yes it will happen imo.

  7. #6

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    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.

  8. #7

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    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.
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  9. #8

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    Quote Originally Posted by gerryb1 View Post
    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)
    Last edited by heavenlyboy34; 12-19-2012 at 08:08 PM.
    Quote Originally Posted by Ron Paul
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  10. #9

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    Quote Originally Posted by gerryb1 View Post
    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?

  11. #10

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    Quote Originally Posted by cubical View Post
    Define hyperinflation...

    but yes it will happen imo.
    Some people define it as >50%/month.

    http://en.wikipedia.org/wiki/Hyperinflation
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  12. #11

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    What percentage of the population has a year's supply of food stockpiled, would you guess?
    "Sorry, guys, the rebellion is off. We couldn't get a rebellion permit."
    "What is this, a home owner's association? Why the need to try and control other people's behavior?"



  13. #12

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    Quote Originally Posted by bxm042 View Post
    Good point. It could happen... very.. fast. Minutes?
    If China introduces a new reserve currency backed by gold all the currency we have sitting in vaults as other country's reserves would come flooding back.

    Since 90% of money is digital... yes... it could be minutes.

    It's thought that over half our currency exists outside the country... it would really be a matter of days for it all to come flooding back as nations drive to the Chinese Gold Yuan instead.

    At once our market would collapse. It's how China can destroy us without having to fire a single bullet. I think this is what they are planning on doing but they know they aren't ready. In 5-10 years they might be.

    Not to mention 85billion is being printed per month, indefinitely, to prop up our toxic economy. In 12 months that's another trillion bucks...

    I just don't think Americans have any idea how bad this is all going to be. I really do fear for us.
    Last edited by NoOneButPaul; 12-19-2012 at 08:48 PM.
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  14. #13

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    Quote Originally Posted by NoOneButPaul View Post
    If China introduces a new reserve currency backed by gold all the currency we have sitting in vaults as other country's reserves would come flooding back.

    Since 90% of money is digital... yes... it could be minutes.

    It's thought that over half our currency exists outside the country... it would really be a matter of days for it all to come flooding back as nations drive to the Chinese Gold Yuan instead.

    At once our market would collapse. It's how China can destroy us without having to fire a single bullet. I think this is what they are planning on doing but they know they aren't ready. In 5-10 years they might be.

    Not to mention 85billion is being printed per month, indefinitely, to prop up our toxic economy. In 12 months that's another trillion bucks...

    I just don't think Americans have any idea how bad this is all going to be. I really do fear for us.
    One thing to keep in mind is that for the money to come back, it has to be traded for something. They don't just send it back for nothing. (Well, they could; or they could just burn/delete it, but why would they?) So what would they be trading it for, and how long would those transactions take?

    I'm betting on a slowly continuing malaise that "they" manage reasonably well so that the sheeple continue to be fooled. Things gradually get worse, but not so fast that there's a revolution. Meanwhile I'm doing all I can to get self-sufficient and build up resilient communities that use alternatives like bitcoins and Shire Silver.

  15. #14

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    Quote Originally Posted by rhelwig View Post
    One thing to keep in mind is that for the money to come back, it has to be traded for something. They don't just send it back for nothing. (Well, they could; or they could just burn/delete it, but why would they?) So what would they be trading it for, and how long would those transactions take?
    Aren't there a lot of things people can buy easily, like stocks? One possibility is that the government will close the markets to prevent the flood of dollars from coming back. But I'm sure that will backfire somehow.

  16. #15

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    Quote Originally Posted by NoOneButPaul View Post
    If China introduces a new reserve currency backed by gold all the currency we have sitting in vaults as other country's reserves would come flooding back.

    Since 90% of money is digital... yes... it could be minutes.

    It's thought that over half our currency exists outside the country... it would really be a matter of days for it all to come flooding back as nations drive to the Chinese Gold Yuan instead.

    At once our market would collapse. It's how China can destroy us without having to fire a single bullet. I think this is what they are planning on doing but they know they aren't ready. In 5-10 years they might be.

    Not to mention 85billion is being printed per month, indefinitely, to prop up our toxic economy. In 12 months that's another trillion bucks...

    I just don't think Americans have any idea how bad this is all going to be. I really do fear for us.
    A friend of mine is a libertarian but he doesn't believe anything bad will happen to the dollar. He just retired and I'm guessing he has around a million in his 401K. Mostly in treasuries. He came thru the 2008 collapse unscathed because all he had was dollars. If the dollar collapses he's going to go from planning his next cruise to trying to find food. And there's going to be millions like him. What if a politician promises to confiscate gold and distribute it to people like my friend who got wiped out holding treasuries. The politician could say "Hey, it's not your fault you got wiped out. Why should people who were patriotically supporting the US get wiped out and others who were undermining the US by holding gold get rich? It's not fair." The scary thing is that even a principled person like my libertarian friend would probably vote for this politician because at that point it would be his best option.

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    So should I start buying chinese yuan or what?

  18. #17

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    Hyperinflation is defined as a complete loss of faith in the currency. The actual m/m inflation percentage is not particularly important to the definition, it's really more of a symptom of the loss of confidence than its cause. As you can't get any more than complete, there's no step past that to add another "hyper" to.
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    Quote Originally Posted by thoughtomator View Post
    Hyperinflation is defined as a complete loss of faith in the currency. The actual m/m inflation percentage is not particularly important to the definition, it's really more of a symptom of the loss of confidence than its cause. As you can't get any more than complete, there's no step past that to add another "hyper" to.
    Hyper-hyper, in the sense that the value of the dollar could be wiped out in an instant. Due to things such as financial computers that are designed to automate the response to situations such as this.

    The dollar could become glorified toilet paper with literally a press of a button.
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    Quote Originally Posted by Madison320 View Post
    Aren't there a lot of things people can buy easily, like stocks? One possibility is that the government will close the markets to prevent the flood of dollars from coming back. But I'm sure that will backfire somehow.
    For the most part, foreign governments don't hold physical dollars, or even digital dollars. When foreigners sell us stuff, the dollars we pay them with don't leave the country. The foreigners can invest those dollars in building manufacturing plants, buying US goods for export to their country, investing in US financial markets, or they buy US government bonds. The trade deficit historically has funded a large part of the federal budget deficit. Before foreigners can start buying things like stocks, the bond trade has to be unwound, either by letting them mature or by selling the bonds to a bigger idiot. Stocks can be bought in minutes, but getting out of a bond position that huge will take time.
    Last edited by enoch150; 12-20-2012 at 08:07 PM.

  21. #20

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    Quote Originally Posted by cubical View Post
    Define hyperinflation...
    Here is the "gold standard" of hyperinflation:



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  22. #21

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    >>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.

    gov = state and local?
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    Don't know if he has changed his mind since the Fed announced QE3 but Peter Schiff did say he did not think hyperinflation was likely (still expects inflation- but not hyperinflation). http://www.silverdoctors.com/peter-s...nflation-call/ Theoretically possible in any monetary system.
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