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Thread: Is hyperinflation coming?

  1. #1

    Question Is hyperinflation coming?


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  3. #2
    Well if it is , let me know when it arrives.

  4. #3
    Hyperinflation isn't possible until the velocity of money increases. I really don't think that's even possible until this Covid19 business no longer restricts economic activity.

    https://fred.stlouisfed.org/series/M2V

    P.S. I didn't watch the video - sorry.

  5. #4
    Quote Originally Posted by Bern View Post
    Hyperinflation isn't possible until the velocity of money increases. I really don't think that's even possible until this Covid19 business no longer restricts economic activity.

    https://fred.stlouisfed.org/series/M2V

    P.S. I didn't watch the video - sorry.
    The video pretty much says the same thing.
    __________________________________________________ ________________
    "A politician will do almost anything to keep their job, even become a patriot" - Hearst

  6. #5
    I never watch videos . I agree with bern. We might be at the opposite . Doesnt always make sense but appears so .

  7. #6
    I watched about 1/2 the video. Talks about hyperinflation from the monetarist's perspective. Not sure one needs to see "velocity" increase with unlocking economy. Continued lockdowns will strangle supply and simple supply/demand can spike prices at that point. The local 7-11 is already complaining about delivery trucks not showing up. YMMV.
    “Democracy is the theory that the common people know what they want and deserve to get it good and hard.”

    H.L. Mencken

  8. #7
    "The invisible hyperinflation monster (it's real)"

    https://www.econlib.org/archives/201...visible_h.html


    There is already enough base money to trigger hyperinflation.

    Why do I think this would happen so rapidly? Consider the case where the market thought there was only a 3% chance that my theory was correct. In that case the expected price level in 2017 would not be 1000% higher, but rather a mere 30% higher than this year’s price level. But even 30% expected inflation is really high! It’s so high that banks would not want to hold onto non-interest-bearing reserves that were rapidly losing purchasing power. As the banks got rid of this “hot potato” the price level would begin soaring, just as I predicted. In other words, there’s no stable equilibrium between 1% inflation and more than 1000% inflation. Anything in between would imply the public is willing to hold implausibly large cash balances (as a share of GDP), despite relatively high expected inflation.Thus QE is only compatible with very low inflation if the public believes there is only an infinitesimal chance that the QE is permanent. Because the actual QE has not resulted in high inflation, we know that the public has a very high level of confidence that the QE is not permanent (or that if permanent, interest will be paid on the excess reserves.)

    So there really is an invisible inflation monster, lurking around the corner. The reason we never see it is because the Fed is sensible enough to not walk around the corner. They have the good sense not to print zero interest money to pay off the debt, and make the money supply increase permanent. You may not see the invisible hyperinflation monster but trust me; the monster is there. If the Fed did what some people recommend we’d see his ugly face almost immediately. And it would not be a pretty sight.
    As long as you don't have buffoons at the Fed it won't be a problem. I think Powell is sensible. But if you had MMT's dictating policy, you could have 30% inflation in a very short time frame.


    From Google
    MMT doesn't advocate “monetizing” deficits rather than issuing bonds. MMT's point is that it doesn't matter. The debt can always be paid by creating money. We should worry about fighting climate change and injustice, not about the national deb

  9. #8
    Quote Originally Posted by Bern View Post
    Hyperinflation isn't possible until the velocity of money increases. I really don't think that's even possible until this Covid19 business no longer restricts economic activity.

    https://fred.stlouisfed.org/series/M2V

    P.S. I didn't watch the video - sorry.
    Velocity isn't an independent variable and has no causal power. It's just GDP divided by money supply and it's been trending down simply because the money supply has been growing faster than GDP. What the velocity chart shows is that we're on a path to stagflation, with more and more money being printed to support more and more unproductive activity.



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  11. #9
    Rapid inflation is already happening if you pay attention. Real estate and securities, the places the newly created money goes first are exploding. Food prices also have increased quite a bit this year.

  12. #10
    I dont think its coming, I think it is HERE.
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  13. #11
    There hasn't been more consumer price inflation as measured by CPI because much of the money previously created didn't end up chasing consumer goods and services (rather securities) and because much of the money went overseas to satisfy the international demand for dollars. Both of those trends are likely to change as the US implements increasingly large and increasingly permanent "stimulus" programs: MMT, UBI, whatever they call it. More of that money will be spent on consumer goods and services, and this will gradually undermine the dollar as a world currency.

  14. #12
    Before Obama took office bacon was 1.99 a lb , now its 4.99 for 12 ounces so regular inflation is bad enough . No need to hurry along the hyper inflation. Rev is right . these dollars have not entered the economy . They went to overseas govts and into the stock , bond and treasury markets.

  15. #13
    * necro bump *

    A little over two years later and we have high inflation, but it's not looking like it's going to take root for hyperinflation - at least not with the Fed's current QT commitment

  16. #14
    Hyperinflation is more a psychological phenomenon than a monetary phenomenon

  17. #15

  18. #16
    Quote Originally Posted by jon4liberty View Post
    Hyperinflation is more a psychological phenomenon than a monetary phenomenon
    The root cause is always monetary but I think psychology can kick high inflation into hyperinflation.

    If it was just psychological every country would be fabulously wealthy, everyone could stay home and let the govt send them checks. They would just need to have happy thoughts or keep the printing secret.



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  20. #17
    Quote Originally Posted by Bern View Post
    * necro bump *

    A little over two years later and we have high inflation, but it's not looking like it's going to take root for hyperinflation - at least not with the Fed's current QT commitment
    Yeah, if they stay committed.

    Let's see how committed they are when the banks start failing or we get 20% unemployment or the government has to default on its debt.

  21. #18
    Quote Originally Posted by Madison320 View Post
    The root cause is always monetary but I think psychology can kick high inflation into hyperinflation.

    If it was just psychological every country would be fabulously wealthy, everyone could stay home and let the govt send them checks. They would just need to have happy thoughts or keep the printing secret.
    I should of went into more detail but I was highlighting your paragraph. Understanding that obviously the money supply will have needed to increase as well. It isn't solely a monetary phenomenon.



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