Home Forums Hunting & Shooting Hunter's Campfire Hyperinflation?

Interest rates are too low for hyper inflation.

":Charge it."

I understand and it was isolated to those individual countries. The whole financial world is now joined at the hip, for better or worse.

But, in the period that I mentioned, 22% interest for 5 years on a Jumbo certificate of deposit (100k$) wasn’t exactly something to sneeze at.

The rate on the 30 year treasury was notable also.

Hyperinflation will happen when the Dollar no longer is the worlds currency, the debt gets larger then the ability of the US government to pay without excessive taxes, or foreign countries such as China cash in their T bills and want their money back. Probably any two of these things happening would immediately trigger it.

Trump had the economy booming and was beginning to pay down the debt and headed to a balanced budget by the mid-2020's. The Wuhan virus stopped this. Dems care more about their theoretical ideas of utopia to see the truth. This is from socialism to acceptance of all things even if weird like LBGTQ stuff. There will never be a utopian society where everyone is totally equal and have the same net worth. There will always be harder workers than others, smarter people than others, mentally impaired people, lazy people, and people filled with hate, people who have no moral compass, etc. America created the best society the world has ever seen, until the liberals for the last 20-30 years have been trying to destroy it.

Why to they think white people are superior, not because of IQ, but because of Christian principles and Capitalism, along with freedom and private ownership of property. It caused the western world to expand and spread colonies all over the world, and it resulted in the Industrial Revolution. Any other people, like the Asians, who copied it also prospered like Japan. Trying to tear down what is and was the greatest elevator to humans is stupid. Copy it, don't destroy it. Whites aren't the problem, their principles are the solution, not Marxism, Socialism, both of which have never worked anywhere.

Venezuela has oil, minerals, and tropical products as well as nice beaches, but socialism has killed them. Japan as no natural resources of any significant amount and rely on trade and private productivity to have the 3rd biggest economy in the world.

We have outsourced or factories and work, and have a reduced core of productivity to offset hyperinflation. When it hits it is going to be really bad.

Very well said.

You confuse terms. We did not experience hyperinflation. Annual inflation rate for the 1970s was 6.8%.

An example of hyperinflation is Zimbabwe in Nov 2008 when they experienced 100% inflation per DAY!

Yugoslavia in January 1994 when it was 64% per DAY.

Germany in Sept 1923 was 23% per DAY

Venezuela had 65% annual inflation in 2014.


The US has. not seen hyperinflation since the end of the Revoltionary war, or perhaps the post Civil War firmer confederate states

The topic of hyperinflation always reminds me of what I heard years ago about how when it really hits us hard you'll find it cheaper to have a roll of dollar bills next to the toilet in lieu of a roll of toilet paper.

Call it what you will but it was exactly hyperinflation here in the USA for those who had to have loans.

Exactly. I'm surprised Toot is ignorant enough to make a statement like that.

That happened not quite a year ago. Great TP shortage of '20

G23

More Hawk inanity.
As expected.

On the other hand, maybe it's not all that surprising.

Well if you just inflate wages for the lowest employees and you just keep printing, borrowing and giving away money, than prices will rise. Gas seems to rise about 10 cents every other day, but when they “officially” measure inflation they don’t count most things you need to buy. Bottom line is that we are heading for a crash landing.

The sky is falling,the sky is falling.

You occupy such a small world.

Lots of that for sure.

Think of inflation as an increase in water level.

Are your assets pile driven into the bottom, like cash?
Or are you floating in a boat, like a stock?


What does it all mean?
There is a trade off with risk and return:
a) If you stubbornly want no risk, your wealth will slowly be robbed by inflation.
b) If you are leveraged into high growth stocks, you can be wiped out by a pull back.

It is an IQ test how you navigate the path in between.

Good Morning BB.

As someone who does have an economic degree, and not from the University of Boston, let me try to address you concerns, along with some others expressed in this thread.

First, there is no Democrat plan to crash our economy. They are just to ignorant to understand their policy consequences.

Do I expect us to see real inflation. Yes.
Do I expect true hyperinflation to hit the U.S. No.

In reaction to Corona, the actions of the Treasury and Federal Reserve resulted in about a 25% increase in the overall supply of base money. In simple terms, there's 25% more dollars chasing the same goods and services, or GDP. For now Corona reduced our GDP, so that 25% figure actually understates the problem by around 6%.

Markets are not perfectly efficient, so during the early stages after newly created money's injected into an economy, inflation doesn't immediately take off. Instead it generally creates an artificial short term "boost" to the economy where the new money allow spending, and hence an increase in demand for certain products, and the beneficiaries of this "boost" enjoy it. However, there is no free lunch. This "free" money comes at the expense of the devaluation of all other assets. This is because in a fiat currency system, we can argue if money is really an asset or not. In general it's store of value, but that value is in relations to all products and services represented by all the money. So, add money to an economy with no corresponding increase in the good and services, and inflation will occur.

Although a 25% increase in the base money supply is unpleasant, it's not anywhere near the monetary increases experienced by Weimar German, or the Congo. Additionally the Weimar and Congo had the additional problem of the destruction of their economic resources, German through the impacts of WWI and payment of reparation's, and the Congo through the effects of Civil War, neither of which impacts us at present.

So, what's the "base case" scenario? It's my expectation (as of today, I may change my mind tomorrow) this increase in our money supply will result in reduction of buying power of the U.S. dollar in the range of 12% to 30% over the next 3 to 6 years. In other words, after a delayed start, inflation in the 3% to 6% range over several years. This is potentially bad for housing prices since they are inversely levered to interest rates. Houses are generally bought based on the payment amount, not the sales price. In the event that interest rates rise, and wages stay stagnant, this will put negative pressure on housing prices. Of course with the greenies in power, we can also expect supply constraints as evidenced by the current price trends in lumber.

Democrat policies will do our economy no favors. Every regulation has the effect of a tax and reduces productivity. For at least the next two years we can expect an increased regulation which will result in Obama like growth rates. In other words, expect real GDP to grow around 1 to 2 percent with the occasional quarter with a 3 percent rate.

Along the way, this injection of money will create bubbles, and along with these bubbles we will see opportunities on both the upside, and the down side. In addition to negatively impacting housing prices, raising interest rates are also bad for bond prices. All this money has to go someplace, and we've already seen this in rise of the stock market, and alternative "assets" such as bitcoin. By a good number of metrics the stock market is already over valued, but that certainly doesn't mean it can't go higher. Greenspan gave his "Irrational Exuberance" speech in 1995. In the following 5 years, the market quadrupled, partially due to the fed's injection of 2 trillion in capital after the failure of Long-term Capital Management in 1998, before the market topped during March of 2001 after peak tech earning.

So, we're looking at 1 to 2 percent growth, 3 to 6 percent inflation, 10 year notes will have to be higher than inflations, so, 4 to 7 percent, and 30 year mortgages back to 5 to 8 percent for good those with good credit. As of Q2, Federal debt was 135% of GDP, up for 107% two quarters earlier. If we are able to end the lock downs, and the Marxist payoff package passes, by year end debt to GDP should be around 125%, with another 5% to be added it the out years of the Marxist Payoff. Last year, the treasury paid a blended rate of about 2.2% on the debt for about $380 billion. If rates spike, and the yield curve inverts, that could put our Marxist leaders in the position of having to raise taxes, monetize the higher interest deficit, or both. Higher taxes typically result in reduced GDP, and Monetizing deficits results in inflation. Is anyone else here old enough to remember the 1970 when bad fiscal policy resulted in low and negative growth, bad monetary policy resulted inflation, and bad public policy resulted in shortages? Throw in some more 1960's style riots, and sure, we are in for some fun times, but not the total collapse of The Republic. After all, midterms are only 21 months away.

Understood..... hyperinflation would be like a tsunami though, many so called floating stocks will go under.

If you have hyper inflation, you can't stop it by lowering interest rates....