I heard someone define it on Kitco maybe a year ago as 50% MONTHLY inflation. And he didn’t seem like a happy man discussing it, essentially stating everyone else was wrong. I think the subject was either Argentina or Turkey.
Jack from Twitter recently posted:
If you go to google and type in “Jack Twitter hyperinflation” you get what looks to be hundreds of articles essentially saying the same thing.
But are we in “hyper inflation”?
It probably might be a good thing to define, right? The problem with the definition above from “get off my lawn” guy was that it was a precise economic definition which seemed to be recognized by PhDs. This doesn’t do most people any good, because once you get there, it’s too late.
If you look at the Weimar hyper inflation, they talk about it in response to WW1 war reparations, and how they printed and printed to try and pay their debts. After WW2, we paid our debts with a sort of “controlled” inflation with a form of Yield Curve Control. This appears what the powers that be are doing now, but they don’t want to tell you they are inflating everything intentionally. Why? Because then they may have to up social security payments and all kinds of other things.
Right now, we are at 5.4% or so Year over Year. Maybe .2% monthly. So we are nowhere near the threshold. Even if you do not agree with the CPI, one can then suggest that even at 10% YoY, that is nowhere neat 50% monthly.
Have a question for the economists out there. I’m not an economist.
At what precise point on the chart would you say something is broken and a hyper inflation is happening?
What about this chart?
What about below?
The point I’m getting at here is that there are countries that have had currency issues like Weimar – maybe not as severe, but these countries find that their currency is either significantly declining in value, or worthless.
I’d like to ask economists what the PROCESS is that gets you to that end stage? Would it not be more helpful to diagnose the PROCESS of hyper inflation rather than the end state of hyper inflation?
Right now, we know there is a failed currency in Venezuela. So much that I heard they are using flakes of gold to pay for things.
Just imagine if they had Kinesis implemented there? They could pay for things in gold using digital currency. I believe many states may see these types of things and eventually find Kinesis for just this reason.
We also know that in the not so distant past, we had Russia’s currency fail in the 1990s at the fall of the Soviet Union. You have had issues with Argentina, Lebanon, and Turkey more recent.
When you talk about the USD, you’d think that all of the debasement would have led to the dollar falling. The problem is, against what? This is what all currencies are doing, together.
What happens is the Yen, Euro, USD, etc take turns debasing more. So relatively speaking, they are all falling together. The pin here is gold. You can clearly see a lot of short term manipulation on this, but the question is – with China and Russia hoarding gold, could the gold price rip higher and then begin a Weimar type of hyper inflation PROCESS on all countries debasing their currency?
So if gold does rip higher to $3000 in the next 12 months, and perhaps $5000 the year after – at what point is it hyper inflation? Would we have to wait 3-5 years until someone wants to define it?
I would think PhD economists, at this point, have dissected the CAUSE of hyper inflation in all of these cases pointed out. And even the high inflation ones. One could also make the argument with something like Greece that high debt caused it. If you looked at Greece, it seemed there was also a productivity issue. Could a country’s productivity and GDP also be part of the hyper inflation process?
One thing that is interesting I brought up in some comments was that the Arab Spring type of situation with unrest happens when food prices hit 35% of income. I have shown in previous articles, I believe there has been misleading CPI numbers, which drove down interest rates for 40 years. The “lack of inflation” reported kept wages in check – but in reality, inflation was much higher than reported. Shadowstats covers that in great detail.
The situation though here may be the slow boil of the frog. If the temperature goes up 1 degree an hour, at what point does the frog know he’s boiling? If we are now just reporting 5.4%, could we have been at the boiling point and this takes us over?
We don’t need hyper inflation for unrest. Some are calling for a melt up in the stock market, many others are calling for a collapse, and some have the melt up, then fall down prediction. Others feel we are in an arm wrestling competition right now. Could we be approaching the 35% now?
Overall, I feel defining the hyper inflation PROCESS is more important than stating that officially, hyper inflation is at 50% month over month. Gold is 51x higher than in 1971. Does that mean gold got 51x more expensive, or did dollars get 51x less valuable?
Slow boil…..about to erupt. Sounds like a condition for hyper inflation to explode at the root cause?