Why is no one talking about Hyper Inflation?

bc the MSM are a bunch od libs who protect biden

Hardloper wrote:

Inflation yes but I wouldn't call it hyperinflation. We can still easily control it it will just be painful.

I think we are at borderline Hyperinflation now. Remember we changed the way CPI was measured in the 90s. If we measured the same way we did in the 70s and 80s it would be at least 8% now if not more.

Also we cannot control despite what the FED says. Or at least we don't have the will. To stop hyperinflation Volcker had to invert the yield curve so short term rates rose to 20%. We have a basic math issue that about $8 trillion of the national debt is in T bills, rolls over somewhere between every 2 weeks to a year. We pay about .1% on this debt. If rates went to a basic inflation-fighting rate of 10% the US government would be paying $800 billion a year to service just the short term debt. We are already running massive deficits so the obvious result is we would need to monetize the debt becasue there is no way the government will raise taxes and cut spending enough to cover the debt service. There is also the issue of 20% of fortune 500 companies being zombie companies at current interest rate levels. For comparison in 1990 about 2% of fortune 500 companies were zombies with real rates. To fight hyperinflation the US government would have to take extreme measures by either totally crushing the economy or a massive devaluation of the currency to relieve the debt in the economy. The current political climate is to pretend we don't have a crisis on our hands and keep the charade up as long as possible. We are going to have hyperinflation in the next two years and the longer we continue to kick the can down the road on this, the worse it will be.

If we have learned anything from Fed policy over the past few decades, it is that inflation hawks over react and kill jobs and stop wage growth. Greenspan tanked the economy in the late 1990s by pushing up interest rates too quickly in response to rising inflation.

Inflation is generally good for consumers in the long run. Your mortgage payments get cheaper every year there is inflation. Deflation, by contrast, can be a disaster for consumers as their debt payments get more expensive every year as wages stagnate and fall. So, as long as there aren't huge spikes, inflation is good for consumers.

Inflation is bad for investors because it forces them to pay higher wages and makes their investments less valuable. That is why Greenspan was willing to tank the economy by raising rates. His only concern was protecting investors.

As for the constant hyper inflation fears (virtually non-stop since 2008), Stephanie Kelton and other MMT proponents have pretty much put to rest the notion that enlarging the money supply necessarily causes out of control inflation.

Wow. This is just a spectacularly wrong claim. According to the CPI, there was 3% inflation over the spectacularly disruptive period of March 2020 to March 2021. A dollar as of March 2020 is worth $1.03 in March 2021. You can actually go back 40 years and only see the 1981 dollar worth present day $3.04. Inflation has been under control for a long, long time, under 2% for much of that period. Even under Ford-Carter, where inflation was up because Nixon broke down the old currency standard and OPEC increased oil prices markedly (and for a while there was low double digit inflation), there was never anything even approaching hyperinflation. I was in Bolivia in 1986 when it cost $1.3 million pesos to see a movie and there were $2 million pesos to the dollar. They had hyperinflation. We have never had hyperinflation in the history of our country.

Ok, I'll comment on this. I've never commented on here because I don't like to get bashed, but I feel strongly about this topic. I don't talk about this much because most people don't want to hear it. I can't even talk to my wife about it. The CPI is not the true inflation rate. The true inflation is around 15%. You don't see much inflation in most things like Netflix, chicken McNuggets, food, gas, rent, etc. However, if you look at the price of assets, it's going up a lot. I have a few rental houses and have stopped buying because the prices of houses have gone up so much, but the rents haven't gone up, so I can no longer get a good return on my investment. Stocks have gone up a lot as well, but if you aren't getting more than 15% return on your investment, then you aren't even staying ahead of inflation. Bitcoin has been averaging 200% per year for the last 10 years and is the apex asset. It is probably the highest returning asset in the history of the world. Bitcoin has a 1 trillion dollar market cap and made it to 1 trillion faster than Amazon, Apple, and Microsoft. The dollar just keeps losing buying power. MicroStrategy gets it. Last year they bought 2 billion in bitcoin. In the 3.5 years before that, they made 78 million in profit. Since they bought bitcoin, they are up around 3.6 billion. In case you didn't know, you don't have to buy a whole bitcoin. You can buy a partial bitcoin and it is divisible to 8 decimal places. I'm not an expert and these are only my opinions for entertainment purposes only.

I would like to add a few more things. Is it hyperinflation? It depends on your definition. If you compare it the hyperinflation of Germany from 1918 to 1923, or Argentina, or Venezuela, or Zimbabwe, it doesn't seem that bad. However, it seems to be getting a lot worse this past year. According to the M1 money chart at https://fred.stlouisfed.org/series/M1 we had about 4 trillion in M1 money before the "pandemic" and now it's over 18 trillion and the increase in dollars seems to be going into assets like houses, stocks, and crypto assets.

This has to be the worst economic BS I've seen on this board. First of all it is investors and the rich who like inflation because they do not buy stuff with their money, they borrow money to buy assets. So inflation drives up the value of the asset and reduces the impact of the loan relative to asset value. This is a well known basic economic concept.

The idea that the consumer likes inflation is beyond absurd. Inflation reduces the value of money and your purchasing power. Every dollar a person saves becomes less and less valuable due to inflation. Inflation is much more impactful on the poor and middle class than the rich.

MMT is total garbage. It is not modern, it has been tried many times throughout history and has been disastrous every time. Academics are just retrying failed economic policy and the result will surely be the safe. Something like 99% of FIAT currencies have had their value destroyed by irresponsible central banks and most of the remaining 1% will meet their end in the next century. The US GDP rose much faster when we had real money which was based on a gold standard.

The bad money policies of the last 50 years have been destroying economic growth. The US GDP grew almost 5% a year on average pre-Federal Reserve. Even with the FED and government policies that caused the Great depression GDP growth from the early 1900's to the mid 60's was close to 4% average. Since LBJ really took us down the road of fiscal irresponsibility with the result of Nixon ending the gold standard GDP growth has averaged more like 3% but has been even worse in the past 20 years as our monetary policy gets worse and worse. The idea that this easy money policy and artificially low rates are good for the economy are not grounded in fact. This extra money has gone into pumping up asset price bubbles where in the past America invested in productive capital which is what allows the economy to grow. Borrowing money to pump up Tesla stock or Bitcoin does not improve quality of life or productivity, that is Greenspan's nonsensical "Wealth Effect". When a company invests in a new factory or R&D to make a better product that is what improves the economy and quality of life. But when rates are low the incentive is to throw the money as assets in hope of making a quick buck rather than a responsible investment in the future.

Thank you. Someone needed to set the record straight.

I can’t believe Roy tried to tell me that higher prices in the checkout line was good for me.

A year ago I paid $209.00 for gas....

Now it's over $3.00...

Thanks to idiot Joe Biden...

New Rolex prices have largely been stagnant. You can still get entry level at just under $6K. Only a couple hundred more than 10 years ago.

Lots of misconceptions in this thread:

Everyone's favorite twitter "leftist" has some good primers on why 1) the US hasn't had 10% inflation for years despite weirdos claiming it 2) Your price change anecdotes don't mean anything

https://www.bloomberg.com/opinion/articles/2021-01-05/as-the-stimulus-debate-rages-trust-government-inflation-numbers

https://noahpinion.substack.com/p/your-local-price-changes-arent-inflation

Try this for good, decentralized, inflation data:

http://www.thebillionpricesproject.com/datasets/

It's one thing to be concerned about inflation, but if anyone is somehow claiming that we're anywhere near hyperinflation, they're way off the mark. The official definition requires monthly inflation rate of 50%, which would be over 12,000% yearly inflation. Quite different from even the 8% or 15% that a couple posters here have seemingly pulled out of their butt.

There are also "indicators" that can be used to signal a hyperinflationary environment:

The general population prefers to keep its wealth in non-monetary assets or in a relatively stable foreign currency. Amounts of local currency held are immediately invested to maintain purchasing power

The general population regards monetary amounts not in terms of the local currency but in terms of a relatively stable foreign currency. Prices may be quoted in that currency;

Sales and purchases on credit take place at prices that compensate for the expected loss of purchasing power during the credit period, even if the period is short;

Interest rates, wages, and prices are linked to a price index; and

The cumulative inflation rate over three years approaches, or exceeds, 100%.

I don't know, maybe things are different in other parts of the country, but I don't really see any of these things being true right now for the general public.

its not hyper inflation yet, but it's bad.

commodities are +20% up across the board on average.

and printing trillions of dollars without decline in GDP.

that is the definition of inflation, total stuff/total currency.

grade 2 math is all you need to "analyze" this.

don't let the PHDs pile it higher and deeper on you.

you don't need a weather man to know which way the wind blows.

longjack wrote:

its not hyper inflation yet, but it's bad.

commodities are +20% up across the board on average.

and printing trillions of dollars without decline in GDP.

that is the definition of inflation, total stuff/total currency.

grade 2 math is all you need to "analyze" this.

don't let the PHDs pile it higher and deeper on you.

you don't need a weather man to know which way the wind blows.

show data for commodities being up 20% (since when?), please.

Local Public Radio had a piece on inflation , said the Dow dipped 1.5% om inflation concerns a how cost of everything building related going up can do bad things for home prices which builders must pass along,

BR549_FunRunner wrote:

Ok, I'll comment on this. I've never commented on here because I don't like to get bashed, but I feel strongly about this topic. I don't talk about this much because most people don't want to hear it. I can't even talk to my wife about it. The CPI is not the true inflation rate. The true inflation is around 15%.

You don't have to believe the CPI. There are other measurements out there (from the serious to the whimsical), but none of them disagree with the CPI by that much. Even the not-at-all-serious-but-maybe-it-is Big Mac index only has inflation at about 0.7% higher than the CPI. Which is a lot, but it's not "inflation is actually 15%" a lot. The BPP and CPI tracked each other fairly closely. I agree that the CPI isn't perfect, but off by TEN PERCENT?????

Inflation is, by definition, an increase in prices across the board. An increase in prices in certain areas is not inflation (although it may be a leading indicator of inflation). There is simply zero evidence for 15% inflation. At that rate, prices would be doubling every 5 years. It would be impossible to miss. There wouldn't be any argument about it. There couldn't be any argument about it.

(And if someone is tempted to cite ShadowStats, which seems to be a popular source for this kind of misinformation - their own stated inflation numbers simply don't match observed reality. Have prices on goods in general increased by a factor of four over the last 20 years? No? Okay then).

Free_the_thigh wrote:

runningwiththetrolls1212 wrote:

I got a 20% raise this year ... Everything is going up EXCEPT workers wages.

Ya this makes sense.

dang, you beat me to it. noice!

Donald Trump was president for most of the last year. Joe Biden's been president now for less than 4 months. So, how can you blame gas inflation on Biden? Gas prices at one point under Trump were over $2.90. I looked at the charts for the past year as well. What happened was that when the economy absolutely tanked last March-April with the shutdown, gas prices, which under Trump had been typically between $2.25 and $2.91, collapsed to around $1.80, then gradually picked up as things opened up. By January, they were over $2.33 again. Essentially, vaccinating a lot of people so that many more things are opening up has allowed gas prices to rise. But then gas prices also always rise between winter and summer every year.

The inflation rate is still low, yet you would expect volatility under these circumstances. There were times last year when certain products were entirely unavailable because of supply chain or factory problems due to COVID.