Are We in Danger of Hyperinflation??

[GolfingChef]

Nah... The risk is always undershooting. In reality, we need something like $10+ trillion in fiscal stimulus to circumvent this current crisis. We're about half-way there.

on the behalf of my children and yet to be born grandchildren that will have to pay for all of this, I say **** that.

 

[Kushinator]

We'll see how half baked it is and exactly whose opinions are utter garbage. Give it about six months.

You're in no position to make predictions.

A manufacturing base was when America was at its strongest.

We have a manufacturing base. In fact, U.S. manufacturing was at it's highest in 2019. You don't know what you're talking about.

Cheap foreign labor may have its immediate benefits as in cheap foreign products, but it does not bode well for any nation to unnaturally rely on imports. It's not rocket science.

It's called consuming above our productive capacity.

And I wish you would refrain from the insults. I don't find it productive, as it has the effect of not wanting to learn from you. Thanks!!

I couldn't care less whether you want to learn or not... that's on you. However, you're clearly seeking to confirm your bias as opposed to developing a position based on knowledge.

FWIW: In the U.S., persistent current account deficits are a sign of savings imbalances. Such a situation would be problematic for a country like Brazil, Pakistan, Indonesia, etc.... However, there is such a volume of dollar denominated assets that gains from trade are able to be absorbed into our financial system, in the form of stocks, bonds, real estate, and the costs associated to owning/maintaining these assets. When a Chinese company exports to the U.S., the money they earn very rarely flows back into China (it increasingly has as of late).

The U.S. dollar is the world's reserve currency. Fear mongering of this kind has no value.

 

[Kushinator]

on the behalf of my children and yet to be born grandchildren that will have to pay for all of this, I say **** that.

We continue to service WWII debt, the single greatest instance of government expenditure (as a percentage of total production) in U.S. history, to this very day. Total postwar federal debt was around $250 billion in 1946. In 2019, the federal government spent $4.4 trillion, or $360 billion per month.

The real issue with public debt is with respect to crowding out private investment. When the economy is growing, employment is on the rise, and interest rates continue to normalize, one would expect the public sector to reduce borrowing. In an environment where intense competition for investment meets rising interest rates, deficit growth necessarily increases the cost of capital and reduces private investment.

It's a risk that isn't significant at the moment. These threads are all about fear-mongering. If you search hyperinflation going back to the Obama days, you'll see the same regurgitated ****.

 

[Logophile]

You're in no position to make predictions.
We have a manufacturing base. In fact, U.S. manufacturing was at it's highest in 2019. You don't know what you're talking about.
It's called consuming above our productive capacity.
I couldn't care less whether you want to learn or not... that's on you. However, you're clearly seeking to confirm your bias as opposed to developing a position based on knowledge.

FWIW: In the U.S., persistent current account deficits are a sign of savings imbalances. Such a situation would be problematic for a country like Brazil, Pakistan, Indonesia, etc.... However, there is such a volume of dollar denominated assets that gains from trade are able to be absorbed into our financial system, in the form of stocks, bonds, real estate, and the costs associated to owning/maintaining these assets. When a Chinese company exports to the U.S., the money they earn very rarely flows back into China (it increasingly has as of late).

The U.S. dollar is the world's reserve currency. Fear mongering of this kind has no value.

Cryptocurrency is the dollar's significant threat, because it has no rules, no rationale and no ties but it's in serious demand. Give it another year or two and it will become the exchange du jour right out of the wild west.


When to trade bitcoin? When Saturn crosses Mercury, of course
By Anna Irrera, Tom Wilson
3 MIN READ

LONDON (Reuters) - Bitcoin seems so flighty, some might argue you may as well consult a crystal ball, read the runes or stare at the stars to divine the direction of the capricious cryptocurrency.
Enter Maren Altman, bitcoin investor and astrologer.
The New Yorker has been following the movements of celestial objects to predict bitcoin price fluctuations since last summer. And while many people might mock her methods, she has built up a 1 million-strong social-media following on TikTok.
Last week, the 22-year-old told her followers to watch for a price correction on Jan. 11.
Why? Saturn was going to cross Mercury.
Lo and behold, bitcoin fell as much as 21% on that day, before recovering most of its losses, slamming the brakes on a meteoric rally that saw it double from early December to a record $42,000 last week.

When to trade bitcoin? When Saturn crosses Mercury, of course

Bitcoin seems so flighty, some might argue you may as well consult a crystal ball, read the runes or stare at the stars to divine the direction of the capricious cryptocurrency.

www.reuters.com

Thanks!!

 

[Mircea]

No. the graph i provided explicitly shows the Personal Consumption Expenditure Price Index (PCEPI). It's a preferred measure of inflation used in conjunction of the Producer Price Index, or the PPI, by the Federal Reserve Bank and its Board of Governors.

PCEPI is just another garden-variety graph produced by statisticians using the X-13ARIMA-SEATS software program (you can download for free from the US Census Bureau website) that makes graphs look pretty.

You do understand you're talking about the same Federal Reserve that causes the 1952-53 Recession because it was unable to distinguish between Demand-pull Inflation and Monetary Inflation, and it stupidly thought that raising interest rates would reduce Monetary Inflation. It didn't, but it did cause a recession.

You're unknowingly leaving out a core aspect of Monetarism. Chasing is velocity, and as you don't know, monetary velocity is at it's historical low:

I'm well aware of velocity. I was writing essays about it before you were in high school.

As you can see from this chart which I originally posted about 2 years ago, velocity is not the same as chasing, and it refutes your claims:



As everyone can plainly see from the graph, money velocity was at historic lows during the 1920s when Monetary Inflation was running 25%-35% annually.

And, as everyone can plainly see from the graph, money velocity had decreased during the early 1970s when Monetary Inflation was 10%-15% annually.



.

 

[Mircea]

We have had supply economics for decades ....

Centuries, actually, but whose counting?

 

[Kushinator]

PCEPI is just another garden-variety graph

The point being, you've shown it's a struggle for you to read a graph and comprehend what's being shown. Whether or not we use PCEI, CPI, CCPI, PPI, etc... doesn't change the basis of my argument.

There isn't a linear relationship between money supply growth and inflation, unless we change the time frame from 60 or 100 years to 500+years. In the short and medium term, inflation is driven primarily by market forces (supply and demand of goods and services produced). The rest of your post is just an overcompensation for being called out.

You're not an expert, and the trash that you post has been abandoned for years.

I'm well aware of velocity.

Clearly not!

As you can see from this chart which I originally posted about 2 years ago, velocity is not the same as chasing, and it refutes your claims

Velocity is:

The velocity of money is a measurement of the rate at which money is exchanged in an economy. It is the number of times that money moves from one entity to another. It also refers to how much a unit of currency is used in a given period of time. Simply put, it's the rate at which consumers and businesses in an economy collectively spend money.

As everyone can plainly see from the graph, money velocity was at historic lows during the 1920s when Monetary Inflation was running 25%-35% annually.

Your data source is incomplete which is par for the course.

And, as everyone can plainly see from the graph, money velocity had decreased during the early 1970s when Monetary Inflation was 10%-15% annually.

No we don't see that. Velocity increased from the 1970's into the early 1980's. It's painfully obvious you're pretending to be an expert on a subject you are not even fairly familiar with.

Monetary inflation is a term used by people who are not taken seriously with respect to macroeconomic thought.

 

[Kushinator]

Cryptocurrency is the dollar's significant threat, because it has no rules, no rationale and no ties but it's in serious demand. Give it another year or two and it will become the exchange du jour right out of the wild west.

If you're not going to bother responding to the post you've quoted, i can't be bothered to entertain your red herrings.

 

[Logophile]

If you're not going to bother responding to the post you've quoted, i can't be bothered to entertain your red herrings.

You know, your posts are so arrogant, insulting, narrow-minded to the point of myopic, not to mention backward - I haven't seen an exploratory, intellectual or creative thought in your posts yet - that you're really not worth any more time. Thanks!!

 

[SMTA]

If ever a thread begged for a mercy killing, it's this one.

 

[Logophile]

If ever a thread begged for a mercy killing, it's this one.

Actually, just your post will suffice. Thanks!!

 

[Ahlevah]

Spending is a necessary component of inflation with respect to it's relation to money supply growth. New money that has been created hasn't been spent.

It's being spent on Tesla stock and bitcoin.

 

[Logophile]

Biden's 2 trillion dollar plan

Biden alluded only in passing to the political challenges his proposal will confront, remarking of his proposal to raise the minimum wage: “People tell me that’s going to be hard to do,” but noting that it just happened in Florida.
The plan contains a raft of provisions that build on the approximately $4 trillion Congress has already devoted to addressing the pandemic, which included a $900 billion measure Trump signed last month. Biden has repeatedly described that last bill as unfinished business, saying Thursday, "We will finish the job.”
The proposal will aim to make good on Biden’s plan for a universal vaccination program, devoting $20 billion to that goal, as well as $50 billion for a “massive expansion” of testing and $130 billion to help schools reopen safely. Among the many goals laid out in the proposal, Biden hopes to deliver 100 million vaccine shots in 100 days, and reopen a majority of K-12 public schools in that time frame.

Still, the size and scope of the package exceeded the expectations of a number of outside advocates. The legislation includes a number of priorities sought by top congressional Democrats, including some of the more liberal members, from increasing the federal minimum wage to $15 an hour to adding billions in funding for child care.
Biden called for increasing federal unemployment benefits from $300 per week to $400 per week for millions of jobless Americans. The benefits would be extended through September, preventing millions of people from losing their jobless aid in March, as would occur under current law. Biden’s plan states that he will also seek to link the level of unemployment benefits to general economic factors, so that benefits increase automatically when the unemployment rate spikes.
As expected, Biden’s proposal would also increase from $600 to $2,000 per person the stimulus payments Biden’s plan would also expand eligibility for the stimulus payments to families where one parent is an immigrant, as well as to adult children claimed as dependents on their parents’ tax returns.
A major expansion of tax credits is also included in Biden’s proposal, for children and lower-income workers. Biden’s plan would expand a tax credit for children to $3,600 a year per child under 6, as well as $3,000 a year for children under 17. It would also extend eligibility for the credit to millions of very poor families and would dramatically boost the Earned Income Tax Credit, a benefit for workers, from $530 to $1,500.
Biden’s plan also contains new initiatives aimed at buoying the ailing U.S. economy, such as a combined 14 weeks of paid sick and family medical leave for millions of workers. It would provide grants to more than 1 million small businesses, and approve about $35 billion toward making low-interest loans available, particularly for clean-energy investments. Biden’s plan would put tens of billions of dollars into other needs facing the country, from food and water assistance, food stamps, and funding for U.S. territories such as Puerto Rico.
The size of the package and its embrace of multiple liberal priorities that are anathema to Republicans — including a large sum for state and local governments — raises questions about how much bipartisan support Biden will be able to get for the proposal. He is already facing pressure from liberals on Capitol Hill who want to use Democrats’ newfound control of Congress to push through aggressive and costly legislation.
Sen. Bernie Sanders (I-Vt.), who will chair the Budget Committee, has said he is working to put together a massive stimulus bill that could pass under special budget rules with a simple majority vote in the Senate, instead of the 60-vote margin normally required.
Biden, however, wants to try for a bipartisan majority on his first bill — although his team appears to have conducted little outreach to congressional Republicans on the plan. Democratic aides say that if Republicans do not appear willing to cooperate, they can shift gears quickly and move to “budget reconciliation,” the procedure that would allow them to pass legislation without GOP votes. That’s how Republicans passed their big tax-cut bill after Trump took office, and how President Barack Obama passed the Affordable Care Act.
https://www.msn.com/en-us/news/poli...ic-and-health-care-relief-package/ar-BB1cKS3N

I can't wait to see all the pork. We're headed off a financial cliff. Thanks!!

 

[highroller]

Headed off of a cliff? I heard that 10 years ago... didn’t seem to bother anyone when they cut taxes 3 years ago.

 

[Kushinator]

It's being spent on Tesla stock and bitcoin.

Fanboy stimulus!

 

[Logophile]

Headed off of a cliff? I heard that 10 years ago... didn’t seem to bother anyone when they cut taxes 3 years ago.

Borrowing from Peter to pay Paul bother me a lot. That's what we're doing. For reasons unknown, borrowing and spending has become the arse backward way of operating, and it has been through a succession of Republican and Democrat administrations, so the debt piles on. Taxation is not the answer. Fiscal responsibility is. States that tax heavily are still in economic trouble, so taxation is obviously not the solution. Thanks!!

 

[Mircea]

The point being, you've shown it's a struggle for you to read a graph and comprehend what's being shown. Whether or not we use PCEI, CPI, CCPI, PPI, etc... doesn't change the basis of my argument.

Sure it does.

There isn't a linear relationship between money supply growth and inflation, unless we change the time frame from 60 or 100 years to 500+years. In the short and medium term, inflation is driven primarily by market forces (supply and demand of goods and services produced). The rest of your post is just an overcompensation for being called out.

Now you're moving the goal posts.

You said there was a relationship between money velocity and Monetary Inflation and I showed you the only two periods of Monetary Inflation in the last 100 years had record low money velocity disproving your claims.

No we don't see that. Velocity increased from the 1970's into the early 1980's.

Not on this Earth it didn't.

Read and weep:



Velocity decreased at a time when both Monetary Inflation and Demand-pull Inflation were rampamnt.

The Media coined the term "Stagflation" which was probably long before you were born, so you don't remember it.

Monetary inflation is a term used by people who are not taken seriously with respect to macroeconomic thought.

No, it's a term used by people with a BA in Economics, like me.

 

[Highlanders]

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!!

You were in serious bother 40 years ago with hyperinflation.... now its a humongous debt, that only war will resolve, well that's the way they have chosen to do it the past twice times they have used that method, buts very costly in lives, good jod, they don't care!

 

[Kushinator]

Sure it does.

Making a claim only to hide from providing evidence.

As stated. You're repeating something you know very little about.

Now you're moving the goal posts.

I'm not. You're claiming hyperinflation is just around the corner based on shoddy analysis that has long since abandoned by macroeconomists.

You said there was a relationship between money velocity and Monetary Inflation

Show me the quote. You won't because you can't because it doesn't exist. I explained the concept of chasing goods, because you were not aware:

As you can see from this chart which I originally posted about 2 years ago, velocity is not the same as chasing, and it refutes your claims

Investopedia defines velocity as: "The velocity of money is a measurement of the rate at which money is exchanged in an economy. It is the number of times that money moves from one entity to another. It also refers to how much a unit of currency is used in a given period of time. Simply put, it's the rate at which consumers and businesses in an economy collectively spend money."

I showed you the only two periods of Monetary Inflation in the last 100 years had record low money velocity disproving your claims.

You haven't shown anything. I don't even think you're capable of following my argument, let alone refuting it.

Read and weep:

Velocity decreased at a time when both Monetary Inflation and Demand-pull Inflation were rampamnt.

Once again, you prove just how ignorant you are with respect to the data:

No, it's a term used by people with a BA in Economics, like me.

You wouldn't know from reading what you post here.

 

[highroller]

Borrowing from Peter to pay Paul bother me a lot. That's what we're doing. For reasons unknown, borrowing and spending has become the arse backward way of operating, and it has been through a succession of Republican and Democrat administrations, so the debt piles on. Taxation is not the answer. Fiscal responsibility is. States that tax heavily are still in economic trouble, so taxation is obviously not the solution. Thanks!!

Proper taxation is part of fiscal responsibility.

 

[Mircea]

Making a claim only to hide from providing evidence.

You probably thing seasonally adjusted workers are living, breathing humans.

Once again, you prove just how ignorant you are with respect to the data:

So he says ignoring the obvious decreases in money velocity.

You said it here:

Chasing is velocity, and as you don't know, monetary velocity is at it's historical low:

The velocity of money has nothing to do with any forms of Inflation.

 

[Kushinator]

You probably thing seasonally adjusted workers are living, breathing humans.

Your opinion of what i "thing" isn't up for discussion. You're well out of your depth.

So he says ignoring the obvious decreases in money velocity.

I provided the data that specifically shows prices increasing in tandem with that of velocity and then falling as velocity recedes (within the constructs of your own failed Texas sharpshooter). All you show is the inability to read a graph.

The velocity of money has nothing to do with any forms of Inflation.

Repeating already refuted statements won't work.

 

[Mircea]

You were in serious bother 40 years ago with hyperinflation....

I wouldn't characterize it as hyper-Inflation. The rate of inflation wasn't even half of the annual rate of inflation in the 1920s.

...now its a humongous debt,...

The debt is largely irrelevant. Instead of government over-spending going into the money supply, it is packaged as treasury securities and sold to foreign and domestic investors. So long as foreign and domestic investors are willing to buy US debt, it isn't a problem.

... that only war will resolve,

It wouldn't be possible for war to resolve debt, unless the war was an internal conflict that resulted in the creation of new States, but note that while the new States created from the US are not obligated to the debt under international law, the successor State to the US would be obligated under international law.

So, if there was an internal conflict that resulted in the creation of the Republic of Texas, the Western Union (California, Washington and Oregon), the New England States and the Midwestern States and the remaining States remained with the federal government, the new States are not obligated, but the federal government is.

... well that's the way they have chosen to do it the past twice times they have used that method, buts very costly in lives, good jod, they don't care!

I'm not aware of any time that method was used.

 

[Highlanders]

I wouldn't characterize it as hyper-Inflation. The rate of inflation wasn't even half of the annual rate of inflation in the 1920s.



The debt is largely irrelevant. Instead of government over-spending going into the money supply, it is packaged as treasury securities and sold to foreign and domestic investors. So long as foreign and domestic investors are willing to buy US debt, it isn't a problem.



It wouldn't be possible for war to resolve debt, unless the war was an internal conflict that resulted in the creation of new States, but note that while the new States created from the US are not obligated to the debt under international law, the successor State to the US would be obligated under international law.

So, if there was an internal conflict that resulted in the creation of the Republic of Texas, the Western Union (California, Washington and Oregon), the New England States and the Midwestern States and the remaining States remained with the federal government, the new States are not obligated, but the federal government is.



I'm not aware of any time that method was used.

1. What is America's national debt burden to GDP percentages?
Let me say it's the worst in the world, guess who's second, the bank of England! Ooh, and the fed, isn't audited!
So inflation is what ever they want it to be.....
2. BRICS have off loaded Trillions of American treasuries, and rid themselves of trillions of dollars holdings, which was an illegal position, to hold secure the dollars position as the preferred currency and the only currency allowed to purchase oil and gas. Subsidised the dollar, but no longer. Oil and gas transactions are now taking place using sovereign currency. America lost its special status when China became the number one economy.
3. War resolves debt, the winner rules, okay! You can load debt burden as American politicians are doing today, in Syria stealing there oil and gas to pay some mythical debt, Iraq, for the illegal war perpetrated against them by America, based on lies, the destruction of Libya by American mercenaries, and American troops. But how quick did American authorities issue a new currency, throughout Libya, the new American owned, bank of Libya, they made a new currency, a ship load, transferred it throughout Libya, and all American sovereign debt to the sovereign country of Libya.... and it's sovereign gold, just disappeared. Irans sovereign money, in world banks confiscated under the pretence of terrorist crimes, when its beneficial to the American court of justice, not the international courts of justice!
4. If Texas ceded from the before war or its demise any debt would be internal, the debt burden had nothing to do with the new sovereign state. Just like here in Scotland, when we leave this union of purgatory we have at no time been able to sway the powers that be, to our will, we have been raped by every administration and told we show be thankful! Under the block grant we get back 40% of tax receipts, oil gas Whisky and its duty, vat etc we get not a penny. They can go sing for there supper, when it comes back to fingers in our pockets.
You every year allow a minimum of $30 billion just in defence to Israel from American tax payers pockets, I haven't seen one American offered up a choice to do so! Who owns America, would the states be forced to repay this levy, no they cannot be held liable in international courts when they can prove endemic corruption the destruction of society forced the Declaration of Independence from I.e. Texas...Only state debt can be enforced.... but what America can do, to international sovereign nations, new internal now sovereign states can also do!

 

[gdgyva]

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

and what happens when those rates start rising?

the amount that we have been paying on that debt starts going way UUUUUUUPPPPPPP

and instead of 700b a year for debt service, we will be looking at maybe a trillion or more out of a 4 trillion total income (or around 25%)

we are fast approaching what Wil Robinson would refer to as "danger zone....danger zone" Sorry, that one may go way over most heads from a TV show from the 60's