The US is going into hyperinflation
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The US is going into hyperinflation
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Re: The US is going into hyperinflation
#2[deleted]
Re: The US is going into hyperinflation
#3[deleted]
Re: The US is going into hyperinflation
#4This guy does not seem like the greatest of prognosticators. He is extremely (wrongly) bullish about metals.
Avino Silver & Gold Mines Providing Investors An Opportunity To Enter At A 50% Discount (https://seekingalpha.com/article/4207912-avino-silver-gold-m...) -- ASM fell from 0.62 at the time to a low of 0.30 just before the pandemic
https://seekingalpha.com/article/4241519-stock-market-recove... https://seekingalpha.com/article/4215321-6-reasons-why-2019-... -- SPY +31% for 2019
Re: The US is going into hyperinflation
#5This is debatable. The end of our monetary path is probably not great. But with every major currency doing some form of QE, the ultimate outcome is uncertain. The current velocity of money seems to point to deflation in the near term. If inflation picks up, the Fed has a number of tools at their disposal. I distrust anyone who speaks confidently of the future in this arena.
Re: The US is going into hyperinflation
#6Hyperinflation usually occurs for one of two reasons:
1. Supply-side shocks such as disruptions in oil production, food production, etc. that cause shortages, leading to massive spikes in price. This happened in the 1970s during the oil crisis and led to stagflation. Zimbabwe had a crisis in food production, leading to hyperinflation.
2. Lots of foreign-denominated debt. Latin American countries experience hyperinflation because their debt is usually in USD rather than their domestic currency. Printing money to service foreign debt leads to hyperinflation. Weimar Germany had this problem when attempting to pay back the foreign-denominated debt reparations.
It's very rare to see demand-induced hyperinflation. That occurs when countries print way beyond the capacity of their economy to handle. If the US was at full capacity utilization and full employment, then an increase in the money supply beyond that would lead to inflation. But currently, the US is nowhere near full employment or full capacity utilization, so the threat of high inflation/hyperinflation is - to put it bluntly - nonsense.
You could make the argument that the stock market is overvalued because of current policy, but that is not hyperinflation.
Re: The US is going into hyperinflation
#7I'm not fully convinced about a hyper inflation along the lines of Weimar Republic or Venezuela or even Argentina levels inflation for that matter.
However, I understand that this is only and only because of US dollar being the global reserve. The real outcome of this is that all countries that handled covid better and are back on track economically, now are richer, because the US dollar is poorer. They can either choose to provide more liquidity in their system, thus raising their GDP or just stay rich with higher currency values.
Either way, Americans are poorer. And maybe deservedly so given the mismanagers that have been running the country.
Re: The US is going into hyperinflation
#8The US has been hiding it's inflation for a while now. If you compare the quality of products vs the price of europe compared to the US, it's not even close.
Re: The US is going into hyperinflation
#9I'm not fully convinced about a hyper inflation along the lines of Weimar Republic or Venezuela or even Argentina levels inflation for that matter. However, I understand that this is only and only because of US dollar being the global reserve. The real outcome of this is that all countries that handled covid better and are back on track economically, now are richer, because the US dollar is poorer. They can either ch…
> However, I understand that this is only and only because of US dollar being the global reserve.
No, historically it's because the US dollar supply is actively managed with moderate inflation as a key goal. Now, the range of other policy options enabled consistent with that, yes, has benefited from the US dollar being a global reserve currency.
The Fed has recently made announcements that seem to indicate that it is weakening focus on the price side of it's mandate to do more on the employment side (to, in effect, compensate for Congress’ failure to marshal fiscal polict to deal with that.) If there is unusual inflation, that active choice of monetary policy priorities—not debt or deficits—will be the proximate cause.
But even in that scenario, hyperinflation is unlikely unless the Fed completely abandons the price level side of it's mandate in setting monetary policy.
Re: The US is going into hyperinflation
#10Inflation is good for debtors. Hyperinflation here is a total exaggeration.