Is the United States headed toward a period of hyperinflation? If this is true, what can a person do to prepare?
I don't know about the United States or hyperinflation, but the whole world will most likely have problems with high inflation when the global economy gets going again. More and more people are becoming wealthy enough to want their piece of the pie, and the pie is getting smaller and smaller. Remember the high oil price and food price inflation before the recession? That will probably come back with a vengeance.
If you want to discuss economice - consulting a Nobel Prize Lauriate is probably a good idea. Paul Krugman's blog.
February 23, 2010, 3:59 pm
A Hawk For All Seasons
You might think it would be hard to be an inflation hawk, demanding monetary tightening now now now, in the current environment. For one thing, there’s no inflation. And there’s also mass unemployment. Based on historic Fed behavior, the combination of these two factors should mean a Fed funds rate of around -6 percent; since the Fed can’t do that, it ought at least to keep rates near zero for a long time, probably at least the next two years.
But these guys are made of sterner stuff than that. Irwin Kellner explains that the overall level of prices is rising, as long as you don’t count the goods whose prices are falling.
The economic stuff we are experiencing is the opposite of inflation and potentially a greater threat. We need inflation at about 3% - and that's nowhere on the horizon.
It could happen if we continue on spending money that has to be borrowed,if this government neglects to provide jobs,restart the economy and continues to increase the deficit.
Abraham Lincoln once said
''to remain silent is to be a coward ''
The people need to call their representatives.
It's certainly a possibility as our currency is not real. Only $3 of hard currency per $100 circulating.
Right now the Government is borrowing heavily as opposed to printing money out of thin air (They are doing a bit of that too).
Any time you increase the volume of currency backed by nothing you decrease the value of that currency and prices rise.
What will be a bigger factor is the United States is not in this mess alone... the Entire World is so heavy in debt that the US Dollar may retain it's perceived value as there are so few other options.
Prices will definitely rise... but will it be hyper inflation?
The Whole World has borrowed itself into crisis.
Okay...This is not my forte, but I'm interested in it and have been reading a bit here and there...So, forgive me if I sound naive--I'm genuinely curious.
So...all around the world countries are "borrowing" to keep their economies afloat, and apparently (at least in the U.S.) just creating (some) currency.
I assume we're all borrowing from one another? I.e., this country is borrowing from that one, who's borrowing from that one, and round and round. Is this correct? If not, WHO are they/we all borrowing FROM?
What happens if everyone (countries) looks at each other and goes, "Well guys, we've really screwed up this time...What do you say we just wipe the slate clean--forgive all these debts?" Is it possible? Would it help?
We are already in hyperinflation but it doesn't show on the CPI because the CPI is hopelessly outdated.
If any are saying we need inflation, think about what would happen if living expenses increased 3% for all Americans across the board while wages stayed stagnant. People are already falling into poverty and homelessness at a rapid rate. Do we really think that rate should be increased?
Look at the BlueCross/Anthem health care rate increase that was proposed in California... is that good?
I think we need a correction actually. If companies aren't going to hire and they aren't going to increase wages and they are going to keep cutting benefits, then the cost of living needs to slide back down to where the average American can live on that.
Inflation or hyperinflationis the boogey-man that doesn't exist now. The Fed has interest rates at zero percent and the CPI is falling. Read a few economics blogs and it will be apparent that this is pure fearmongering.
Mild inflation provides incetive for capitalists to invest - gamble - on ventures that will create jobs. In a period of deflation a million dolars in the bank increases in value with NO risk. Inflation, on the other hand, nibbles his forture to death slowly. He has to DO SOMETHING with the money and a lot of those 'something' options create jobs.
not anymore. they just reinvest it into really risky speculation and ruin the economy. that's how we got here, too much liquidity in the market from keeping the interest rate too low for far too long.
keeping it low now isn't helping either.
the cpi is a remarkably inadequate measure of inflation anymore.
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