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Author Topic: Hyperinflation in the USA  (Read 1587 times)

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Online Omega1982

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Hyperinflation in the USA
« on: August 31, 2024, 08:46:04 PM »
How far do you think the US is from hyperinflation assuming Harris wins. 

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Re: Hyperinflation in the USA
« Reply #1 on: August 31, 2024, 11:14:43 PM »
How far do you think the US is from hyperinflation assuming Harris wins.

Inflation whether under a Trump or Harris regime I fear is inevitable. For so-called hyper-inflation to be present will involve another catalyst or event to begin that reality.
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Online andrewfi

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Re: Hyperinflation in the USA
« Reply #2 on: September 01, 2024, 03:08:55 AM »
High inflation is not a synonym of hyperinflation, they are different things. High inflation in the US economy is pretty much a certainty in the near to mid future. That's because whoever is in government, money is going to be created at a rate greater than any increase in the output of the national economy, and the ability to export dollars is decreasing.

The inability to control prices is a defining feature of hyperinflation. This, more so than the actual inflation rate.

I do not think we will see inflation over 50% annually in the USA (typically seen as the lower boundary of hyperinflation), nor do I think that control over pricing will be completely lost. Thus, high inflation, but not hyperinflation.

However, it's not about the ruling party, but about structural and cultural issues within the USA.
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Re: Hyperinflation in the USA
« Reply #3 on: September 01, 2024, 03:22:31 AM »
While rarely said out loud inflation is a way to reduce the federal debt. The effect on individuals is completely different.

Andrew if he so desires, can explain this with allot of verbiage
 
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Online andrewfi

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Re: Hyperinflation in the USA
« Reply #4 on: September 01, 2024, 09:01:39 AM »
Inflation does not reduce debt. However, what it can do is reduce the real value of the debt as one pays off the debt in good money with bad money. That is, inflated money with less value pays off the debt incurred in the last when the currency was worth more.

Given the scale of US debt and the rate at which it is being incurred, that strategy is unlikely to be effective - unless the dollar becomes almost valuless in the real world. The social, political and economic effects would be negative and huge.
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Online rosco

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Re: Hyperinflation in the USA
« Reply #5 on: September 01, 2024, 02:04:06 PM »
The US is too far gone, like a gambling addict taking credit he'll never be able to pay back, just to stay in the top seat. It's just a matter of time.

Offline 2tallbill

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Re: Hyperinflation in the USA
« Reply #6 on: September 01, 2024, 03:45:41 PM »
High inflation is not a synonym of hyperinflation,

+100

When you take an economics class at a University you learn that
Hyperinflation is generally defined as price increases of 50% or
more per month or an annual rate of 1,000% or more.

Source
https://www.investopedia.com/terms/h/hyperinflation.asp#:~:text=Hyperinflation%20is%20a%20scenario%20in,or%20produce%20goods%20and%20services.
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Re: Hyperinflation in the USA
« Reply #7 on: September 01, 2024, 07:41:46 PM »
It happened in Argentina which was also a wealthy country.  One hundred years ago if you were a European looking to move overseas, you would either go to the USA or Argentina. 

In Argentina hyperinflation was not caused by one catastrophic event.  It was caused by excessive money printing just like we're doing right now in the USA. 

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Re: Hyperinflation in the USA
« Reply #8 on: September 02, 2024, 05:51:57 AM »
High inflation in the US economy is pretty much a certainty in the near to mid future.

From my trip to NYC a few months ago, I think its safe to say its there already, not something coming in the future. Although, I expect it will continue, if that is what you meant.

But for me, the prices of some stuff there were ludicrous.
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Offline 2tallbill

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Re: Hyperinflation in the USA
« Reply #9 on: September 02, 2024, 02:47:09 PM »
In Argentina hyperinflation was not caused by one catastrophic event.  It was caused by excessive money printing just like we're doing right now in the USA.

You are 100% correct
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Re: Hyperinflation in the USA
« Reply #10 on: September 02, 2024, 08:22:59 PM »
and excessive handouts both in Argentina and USA. 

Offline B.B.

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Re: Hyperinflation in the USA
« Reply #11 on: September 02, 2024, 09:32:00 PM »
While rarely said out loud inflation is a way to reduce the federal debt. The effect on individuals is completely different.

There are three primary ways to cope with debt:

A)  Cut spending.  This has a big constituency against, those folks who are net "takers."

B)  Increase taxes.  This has a smaller, but powerful constituency against. 

C)  Inflate the currency.  This has no obvious constituency against, other than people who, too late, discover that the $ they earn no longer goes as far as it used to, to the point of pain.  This is why there is currently a joke circulating, that 'MAGA' means 'Maybe Afford Groceries Again.'

The US is out farther over its skiis so that A & B will work.  Too much pain, although it will not stop the Dems from taxing "the rich" (anyone with a job)  so that they "pay their fair share!" (which is just so the Proles can feel like people with more $ than them are getting 'got'.

I expect that Powell will cut rates in September, because he didn't in June when he should have previously, but it is also to try to give Harris a bump - Powell HATES Trump.

Given that we regularly expand the money supply, one wonders how much "lift" future rate hikes will have.  But that's for the future - at this point, we don't have enough water to go back across the desert the way we came so we have to go forward, although we are certainly not alone (see also, Japan, China, EU.)

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Re: Hyperinflation in the USA
« Reply #12 on: September 02, 2024, 11:43:03 PM »
The issue is that if we in the US go into hyperinflation then the purchasing power of the dollar will evaporate even faster. 

Does anyone think capital controls might be coming to America? 

The problem is that back in like 2013 Obama signed a law making it extremely difficult for Americans to open a bank account overseas.  Many foreign banks actually reject american clients. 

I've been looking at Spain as a lan B although salary is much lower.  The problem with Spain is that if you buy an apartment and dont live there, especially if you'rer overseas, then squatters can come in.  With Spanish laws its difficult to kick the squatters out. 

latin America can change at the drop of a dime with a new election as it has many times before. 

And I would invest or live in countries that are hostile towards the US even if I like those countries because at the end of the day I am American and this could be problematic.  I can't change my place of birth and this is written on every passport. 

So looking at spain, no bank account, no real estate.  If the dollar dissipates faster then where would one park small wealth? 

I've never used bitcoin and I prefer something tangible. 

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Re: Hyperinflation in the USA
« Reply #13 on: September 03, 2024, 03:20:15 AM »
Perhaps you should familiarize your self with Nomad Capitalist if this is your concern.
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Re: Hyperinflation in the USA
« Reply #14 on: September 03, 2024, 03:43:42 AM »
don't worry, if the US were to fall apart to such a degree that hyperinflation was a outcome, then the effect of that would be mirrored in most countries. Spain and by extension the Eurozone would offer no protection.

You'd need to be in a region that was largely disconnected from the dollar. One of the BRICS countries, assuming that works out, would be a better bet. Absent BRICS, China or Russia would be likely safer for your wealth.

One of the controls available in the case of inflation getting out of control is capital control. That's why CDBCs are becoming a thing of interest to governments and central banks around the world. Also, cash is now, in most places, only a very small part of spending meaning that 'soft' capital and spending controls are easy to impose.

Spain, and other countries, place limits on the maximum value of legal transactions in cash. (IIRC €10K in Spain)
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Offline 2tallbill

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Hyperinflation in the USA
« Reply #15 on: September 03, 2024, 07:19:00 AM »
The issue is that if we in the US go into hyperinflation then the purchasing power of the dollar will evaporate even faster. 

If the USA went into hyperinflation (1000% per year), which I don't believe
you fully understand the definition. The Dollar will be worth a tenth of a
penny in less than a year. The US dollar purchasing power by definition
ceases to exist.

World economies will crash. It could be like a Mad Max end of times or
similar post apocalypse like world. Hording canned goods, medicines,
ammunition and a growing a potato garden might be a smarter play
than hoping the euro survives.

It might be wise to vote for people who don't get us into anything like
that to begin with. I do believe that we have continued inflation in our
future, but that is nothing like hyper inflation.
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Offline Texan77

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Re: Hyperinflation in the USA
« Reply #16 on: September 03, 2024, 08:03:52 AM »
don't worry, if the US were to fall apart to such a degree that hyperinflation was a outcome, then the effect of that would be mirrored in most countries. Spain and by extension the Eurozone would offer no protection.

You'd need to be in a region that was largely disconnected from the dollar. One of the BRICS countries, assuming that works out, would be a better bet. Absent BRICS, China or Russia would be likely safer for your wealth.


Try a small Pasific island whose population mainly catches fish. China is dependent on west and Russia dependent on China. The whole world is connected. Some worry about the coming collapse in China and what it would do to the west. It can go both ways so be careful what you wish for, you might get it.
3) There has been no "threat" to invade Ukraine. The US invented that and fed it to a complicit media.

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Re: Hyperinflation in the USA
« Reply #17 on: September 03, 2024, 08:45:52 AM »
Texan77, tell us, what propertion of Chinese GDP is dependent on the USA?

Then tell us, how much of those imports can be substituted in the short term by the United States.

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Re: Hyperinflation in the USA
« Reply #18 on: September 03, 2024, 07:36:22 PM »
That's correct Bill. 

Hyperinflation is what happened in Argentina, Venezuela, Zimbabwe.  There's a banknote from Zimbabwe of 100 trillion and you can't buy eggs with it,. 

I think in the year 2000, one thousand Argentine pesos was equivalent to one thousand US dollars. 

As of last year, one thousand Argentine pesos was worth one dollar.  That's hyperinflation. 

Offline Texan77

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Re: Hyperinflation in the USA
« Reply #19 on: September 03, 2024, 10:55:58 PM »
That's correct Bill. 

Hyperinflation is what happened in Argentina, Venezuela, Zimbabwe.  There's a banknote from Zimbabwe of 100 trillion and you can't buy eggs with it,. 

I think in the year 2000, one thousand Argentine pesos was equivalent to one thousand US dollars. 

As of last year, one thousand Argentine pesos was worth one dollar.  That's hyperinflation.

Yea but there are ratios that determine that. The amount of money already in circulation and the amount of printing. Normally you would have to be expending the money supply by 50 per cent per month or more to get hyperinflation. We are nowhere near that.
3) There has been no "threat" to invade Ukraine. The US invented that and fed it to a complicit media.

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Re: Hyperinflation in the USA
« Reply #20 on: September 04, 2024, 03:11:10 AM »
Texan77, that's kinda right. But shows a lack of understanding of what the process is.

Creating new money is not entirely under the control of the central bank or government. It is a reaction to market forces as well as a reflection of policy goals.

Policy goals can be adjusted. That's the 'control' part of inflation. But the need to borrow money, for example, is not fully controlled by governments or central banks. If money is not borrowed then the functions of government start to close down in an economy that relies upon debt rather than production. That debt must be paid for at rates that lenders are willing to loan against.

So, a central bank will issue debt because it must. This decreases the value of the currency and tends to increase the interest rate paid. This can create a spiral that is less and less responsive to the economic levers of banking and government. The lower the real value of the currency, the more must be created to meet the needs of the economy and government.

One does not need hyperinflation for the functions of government and the economy to start to fail.
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