Are We in Danger of Hyperinflation??

[Logophile]

Came across a disturbing article from last May:

US is `printing' money to help save the economy from the COVID-19 crisis, but some wonder how far it can go

The Federal Reserve is creating dollars from scratch at an unprecedented rate, one of many tools to rescue the economy amid the coronavirus pandemic.

www.usatoday.com

US is `printing' money to help save the economy from the COVID-19 crisis, but some wonder how far it can go
The Federal Reserve is creating dollars from scratch at an unprecedented rate, one of many tools to rescue the economy amid the coronavirus pandemic.

What is Hyperinflation?
In economics, hyperinflation is used to describe situations where the prices of goods and services rise uncontrollably over a defined time period. In other words, hyperinflation is extremely rapid inflation.
Generally, inflation is termed hyperinflation when the rate of inflation grows at more than 50% a month. American economics professor Phillip Cagan first studied the economic concept in his book, “The Monetary Dynamics of Hyperinflation.”

Causes of Hyperinflation
Hyperinflation commonly occurs when there is a significant rise in money supply that is not supported by economic growth. Simply put, it is caused by dramatically increasing the amount of money in an economy.

The increase in money supply is often caused by the government printing and infusing more money into the domestic economy. rise.https://corporatefinanceinstitute.com/resources/knowledge/economics/hyperinflation/

I don't know why it never occurred to me that the US was printing money at a record rate to stem the impact of Covid. This is a situation that may haunt us. I'm curious if anybody has any thoughts, as I'm not savvy on the subject. Thanks!!

 

[vegas giants]

Came across a disturbing article from last May:

US is `printing' money to help save the economy from the COVID-19 crisis, but some wonder how far it can go

The Federal Reserve is creating dollars from scratch at an unprecedented rate, one of many tools to rescue the economy amid the coronavirus pandemic.

www.usatoday.com

US is `printing' money to help save the economy from the COVID-19 crisis, but some wonder how far it can go
The Federal Reserve is creating dollars from scratch at an unprecedented rate, one of many tools to rescue the economy amid the coronavirus pandemic.

What is Hyperinflation?
In economics, hyperinflation is used to describe situations where the prices of goods and services rise uncontrollably over a defined time period. In other words, hyperinflation is extremely rapid inflation.
Generally, inflation is termed hyperinflation when the rate of inflation grows at more than 50% a month. American economics professor Phillip Cagan first studied the economic concept in his book, “The Monetary Dynamics of Hyperinflation.”

Causes of Hyperinflation
Hyperinflation commonly occurs when there is a significant rise in money supply that is not supported by economic growth. Simply put, it is caused by dramatically increasing the amount of money in an economy.

The increase in money supply is often caused by the government printing and infusing more money into the domestic economy. rise.https://corporatefinanceinstitute.com/resources/knowledge/economics/hyperinflation/

I don't know why it never occurred to me that the US was printing money at a record rate to stem the impact of Covid. This is a situation that may haunt us. I'm curious if anybody has any thoughts, as I'm not savvy on the subject. Thanks!!

Unlikely. Interest rates are so low the fed has lots of power to raise rates and reduce inflation

 

[MamboDervish]

Came across a disturbing article from last May:

US is `printing' money to help save the economy from the COVID-19 crisis, but some wonder how far it can go

The Federal Reserve is creating dollars from scratch at an unprecedented rate, one of many tools to rescue the economy amid the coronavirus pandemic.

www.usatoday.com

US is `printing' money to help save the economy from the COVID-19 crisis, but some wonder how far it can go
The Federal Reserve is creating dollars from scratch at an unprecedented rate, one of many tools to rescue the economy amid the coronavirus pandemic.

What is Hyperinflation?
In economics, hyperinflation is used to describe situations where the prices of goods and services rise uncontrollably over a defined time period. In other words, hyperinflation is extremely rapid inflation.
Generally, inflation is termed hyperinflation when the rate of inflation grows at more than 50% a month. American economics professor Phillip Cagan first studied the economic concept in his book, “The Monetary Dynamics of Hyperinflation.”

Causes of Hyperinflation
Hyperinflation commonly occurs when there is a significant rise in money supply that is not supported by economic growth. Simply put, it is caused by dramatically increasing the amount of money in an economy.

The increase in money supply is often caused by the government printing and infusing more money into the domestic economy. rise.https://corporatefinanceinstitute.com/resources/knowledge/economics/hyperinflation/

I don't know why it never occurred to me that the US was printing money at a record rate to stem the impact of Covid. This is a situation that may haunt us. I'm curious if anybody has any thoughts, as I'm not savvy on the subject. Thanks!!

Hmm. Thought provoking.
After entire C-5 Galaxy transport planes filled with skids full of US dollar$ were shipped to Afghanistan to "nation build" that country via graft, it seems like printing money for Bush's off-the-books unfunded war had no effect whatsoever on creating inflation. Of course all of Hamid Karzai's 5th cousins probably keep their millions in Swiss bank accounts, so not that much of it is circulated.

Given the relative strength of the US$ in the world, it could stand to use a little devaluation. If the price of imports goes up a little, American made goods might do a little better.

Some mild inflation? Perhaps. Hyperinflation?? Unlikely.
But at least in this case, the newly printed money will be helping US citizens, instead of enriching Central Asia.

Billions Go Missing In Afghanistan - ANIMAL

In the past three years, over $3 billion in CASH was flown out of Kabul reports the Wall Street Journal. Officials don't know exactly who got what, but

animalnewyork.com

 

[danielpalos]

Came across a disturbing article from last May:

US is `printing' money to help save the economy from the COVID-19 crisis, but some wonder how far it can go

The Federal Reserve is creating dollars from scratch at an unprecedented rate, one of many tools to rescue the economy amid the coronavirus pandemic.

www.usatoday.com

US is `printing' money to help save the economy from the COVID-19 crisis, but some wonder how far it can go
The Federal Reserve is creating dollars from scratch at an unprecedented rate, one of many tools to rescue the economy amid the coronavirus pandemic.

What is Hyperinflation?
In economics, hyperinflation is used to describe situations where the prices of goods and services rise uncontrollably over a defined time period. In other words, hyperinflation is extremely rapid inflation.
Generally, inflation is termed hyperinflation when the rate of inflation grows at more than 50% a month. American economics professor Phillip Cagan first studied the economic concept in his book, “The Monetary Dynamics of Hyperinflation.”

Causes of Hyperinflation
Hyperinflation commonly occurs when there is a significant rise in money supply that is not supported by economic growth. Simply put, it is caused by dramatically increasing the amount of money in an economy.

The increase in money supply is often caused by the government printing and infusing more money into the domestic economy. rise.https://corporatefinanceinstitute.com/resources/knowledge/economics/hyperinflation/

I don't know why it never occurred to me that the US was printing money at a record rate to stem the impact of Covid. This is a situation that may haunt us. I'm curious if anybody has any thoughts, as I'm not savvy on the subject. Thanks!!

Right wingers only claim inflation happens when the Poor have too much money to spend not the Richest.

 

[Logophile]

Hmm. Thought provoking.
After entire C-5 Galaxy transport planes filled with skids full of US dollar$ were shipped to Afghanistan to "nation build" that country via graft, it seems like printing money for Bush's off-the-books unfunded war had no effect whatsoever on creating inflation. Of course all of Hamid Karzai's 5th cousins probably keep their millions in Swiss bank accounts, so not that much of it is circulated.

Given the relative strength of the US$ in the world, it could stand to use a little devaluation. If the price of imports goes up a little, American made goods might do a little better.

Some mild inflation? Perhaps. Hyperinflation?? Unlikely.
But at least in this case, the newly printed money will be helping US citizens, instead of enriching Central Asia.

To combat inflation, the feds raise interest rates. I've never quite understood why, but it seems to me, during the Carter Administration, interest rates soared to near twenty percent. This is all off the cuff, but my point is, with all the borrowing and printing - and the Biden Administration's interest in more economic help - would inflation become a serious problem for Biden's presidency?? Thanks!!

 

[Logophile]

Right wingers only claim inflation happens when the Poor have too much money to spend not the Richest.

Ducking the political barb, do you we will experience hyperinflation in the next few years?? Thanks!!

 

[code1211]

Came across a disturbing article from last May:

US is `printing' money to help save the economy from the COVID-19 crisis, but some wonder how far it can go

The Federal Reserve is creating dollars from scratch at an unprecedented rate, one of many tools to rescue the economy amid the coronavirus pandemic.

www.usatoday.com

US is `printing' money to help save the economy from the COVID-19 crisis, but some wonder how far it can go
The Federal Reserve is creating dollars from scratch at an unprecedented rate, one of many tools to rescue the economy amid the coronavirus pandemic.

What is Hyperinflation?
In economics, hyperinflation is used to describe situations where the prices of goods and services rise uncontrollably over a defined time period. In other words, hyperinflation is extremely rapid inflation.
Generally, inflation is termed hyperinflation when the rate of inflation grows at more than 50% a month. American economics professor Phillip Cagan first studied the economic concept in his book, “The Monetary Dynamics of Hyperinflation.”

Causes of Hyperinflation
Hyperinflation commonly occurs when there is a significant rise in money supply that is not supported by economic growth. Simply put, it is caused by dramatically increasing the amount of money in an economy.

The increase in money supply is often caused by the government printing and infusing more money into the domestic economy. rise.https://corporatefinanceinstitute.com/resources/knowledge/economics/hyperinflation/

I don't know why it never occurred to me that the US was printing money at a record rate to stem the impact of Covid. This is a situation that may haunt us. I'm curious if anybody has any thoughts, as I'm not savvy on the subject. Thanks!!

To my way of thinking, yes, we are.

 

[danielpalos]

Ducking the political barb, do you we will experience hyperinflation in the next few years?? Thanks!!

It didn't happen with QE, why should it happen now? There is not enough demand now to keep some businesses going. Raising the minimum wage could generate more tax revenue and create more demand for local businesses.

 

[swing_voter]

Are We in Danger of Hyperinflation??


No

 

[Logophile]

It didn't happen with QE, why should it happen now? There is not enough demand now to keep some businesses going. Raising the minimum wage could generate more tax revenue and create more demand for local businesses.

Because of public perception. The well being of the economy is in part tied to the public sense of security. And the public's perception of security has been shaken. Then there's this:

Jimmy Carter's Accomplishments and Policies

Carter’s immediate challenge was the combination of inflation and unemployment. President Nixon had created inflation by ending the gold standard in 1971. As a result, the dollar's value plummeted on the foreign exchange markets. Import prices rose and created inflation. Nixon tried to stop it with wage-price controls in 1971. That cramped business growth and increased unemployment.3

The Federal Reserve fought the resultant slow growth by lowering interest rates. The economy improved, creating millions of jobs. But inflation threatened the resulting prosperity. In 1979, President Carter appointed Paul Volcker as the Fed chair. He raised interest rates and ended double-digit inflation.

The Volcker Shock caused a recession that helped destroy Carter’s reelection chances. Until the Fed got the economy under control, it suffered from the combination of high unemployment and high inflation. It led to the creation of the misery index. https://www.thebalance.com/president-jimmy-carter-s-economic-policies-4586571

Not being tied to the gold standard means that money has relative worth. So what that means ultimately, is that the dollar's relativity leaves us very vulnerable to "market perception." I am concerned that we are headed for a very rocky few years on the economic front. Thanks!!

 

[danielpalos]

Carter’s immediate challenge was the combination of inflation and unemployment. President Nixon had created inflation by ending the gold standard in 1971. As a result, the dollar's value plummeted on the foreign exchange markets. Import prices rose and created inflation. Nixon tried to stop it with wage-price controls in 1971. That cramped business growth and increased unemployment.3

Due to external not internal factors? And, there was no "shock to the market" by "moving the goal posts" like there was by leaving the gold Standard.

 

[Logophile]

Due to external not internal factors? And, there was no "shock to the market" by "moving the goal posts" like there was by leaving the gold Standard.

I think both external and internal factors are at play now, and in some ways, they're unprecedented, just as leaving the gold standard was. Thanks!!

 

[danielpalos]

I think both external and internal factors are at play now, and in some ways, they're unprecedented, just as leaving the gold standard was. Thanks!!

What "external" factors are at play with our fiat money? Besides, most of it is going to a few rich people who simply can't spend enough to create price inflation for goods and services.

 

[Vadinho]

Ask yourself a simple question in order to think about this topic. Does the world have too much money chasing too few goods or too many goods without enough customers with money to buy them. When you look at it globally, it all becomes much clearer. We have more capacity to supply goods and services then any single currency can buy.

 

[danielpalos]

Ask yourself a simple question in order to think about this topic. Does the world have too much money chasing too few goods or too many goods without enough customers with money to buy them. When you look at it globally, it all becomes much clearer. We have more capacity to supply goods and services then any single currency can buy.

I think we have a demand problem not a supply problem after decades of, supply side economics. We should be raising the minimum wage to create more demand and generate more tax revenue.

 

[Vadinho]

I think we have a demand problem not a supply problem after decades of, supply side economics. We should be raising the minimum wage to create more demand and generate more tax revenue.

Exactly, that was the only rational choice between the two I provided.

 

[noonereal]

Are We in Danger of Hyperinflation??

LOL, as if this is a question.

Love your sense of humor.

 

[danielpalos]

Exactly, that was the only rational choice between the two I provided.

Want to run for the House? Raise the minimum wage to create more demand and generate more tax revenue could be popular.

 

[Logophile]

What "external" factors are at play with our fiat money? Besides, most of it is going to a few rich people who simply can't spend enough to create price inflation for goods and services.

Right off the bat, we have a threat we've never had to field before: hacking, which can result in financial manipulation on a grand scale. We also have the emergence of new cryptocurrencies, that potentially may not tie to the dollar. Thirdly, we have China's economic surge and its concomitant currency manipulation, and our continued dependence on China's manufacturing, which is not healthy for any democratic society in as much as should our economy contract, Communist countries tend to "nationalize" businesses established there that are no longer relevant to their agenda. In other words, we have enemies. Lastly, we don't really know the fall-out yet from Covid. We won't know until it's behind us, but right now, we're listing left and right in the storm. Thanks!!

 

[Vadinho]

Want to run for the House? Raise the minimum wage to create more demand and generate more tax revenue could be popular.

We have Salud, he is a good guy. I am ready to retire anyway...

 

[danielpalos]

Right off the bat, we have a threat we've never had to field before: hacking, which can result in financial manipulation on a grand scale. We also have the emergence of new cryptocurrencies, that potentially may not tie to the dollar. Thirdly, we have China's economic surge and its concomitant currency manipulation, and our continued dependence on China's manufacturing, which is not healthy for any democratic society in as much as should our economy contract, Communist countries tend to "nationalize" businesses established there that are no longer relevant to their agenda. In other words, we have enemies. Lastly, we don't really know the fall-out yet from Covid. We won't know until it's behind us, but right now, we're listing left and right in the storm. Thanks!!

We should be upgrading our own infrastructure to help reduce costs to the private sector and enable greater efficiencies. I agree to disagree that those other factors will cause hyperinflation.

 

[Logophile]

Ask yourself a simple question in order to think about this topic. Does the world have too much money chasing too few goods or too many goods without enough customers with money to buy them. When you look at it globally, it all becomes much clearer. We have more capacity to supply goods and services then any single currency can buy.

I see over 6 billion people on this planet, so I suspect that currently - albeit unrecognized - it's the former rather than the latter The reason why I think that is because the epidemic laid bare how vulnerable we are to shortages. We're just a step away from even food shortages, and that's global. And we're still dealing with essential shortages. Thanks!!

 

[Vadinho]

I see over 6 billion people on this planet, so I suspect that currently - albeit unrecognized - it's the former rather than the latter The reason why I think that is because the epidemic laid bare how vulnerable we are to shortages. We're just a step away from even food shortages, and that's global. And we're still dealing with essential shortages. Thanks!!

True. We shall see if supply chains fail in 2021.

 

[danielpalos]

True. We shall see if supply chains fail in 2021.

Due to a lack of demand? Now should be a good time to increase the minimum wage and goad capitalists to automate and upgrade for their bottom line.

 

[Vadinho]

Due to a lack of demand? Now should be a good time to increase the minimum wage and goad capitalists to automate and upgrade for their bottom line.

Well, if for some reason the pandemic gets so bad supply chains fail then yes, we will have shortages across the board. Whether it creates inflation is a stretch IMHO.