Do you believe in hyperinflation ??
Investor · Camden , NJ · Member since 2010 · 77 posts · 7 votes
Do you believe in hyperinflation??Seems like every where i turn I'm hearing this word ... It's a very scary word  sounds like a horror movie . Guess the government  are the ones with the mask ,.. Lol :)Â
My question is do u believe in hyperinflation  .. If you do how are you preparing for it ???
Me myself I do believe the gap between the rich and poor is increasing everyday . !!!!Â
Exactly, James. Lots of people like to throw the word around. Keep the fear alive!!
But it is very rare indeed. It isn't something that just arises out of high debt or rising money supply. There are several factors that must converge at the same moment in time and they must converge on the right country at the right time.
It is not enough to find 1 or 2 similarities between the US now and other countries which experienced hyperinflation. You have to go much deeper than that.
Unfortunately most people don't go deeper. They read a misleading headline and jump to wild conclusions.
In the current real world, you should fear the effects of stagnation or deflation much more than hyperinflation. It is economically impossible for an economy to be teetering on the edge between deflation and hyperinflation. But if you listen to the kooks mostly on a certain cable "news" channel, that is apparently where we are.
It is ridiculous.
Is it reasonable to prepare for some inflation? Sure. But talk of hyperinflation is simply that...hyperbole.
Trolled?! This coming from someone that starts discussions about TSA people masturbating on a real estate board! Priceless!
If you can't win on the facts deflect and attack!
Unlike the poor on fixed welfare payments. And I don't know of many who qualify to trade commodity futures. Come to think of it, many don't pay their debts either.
TC
The sad part is this isn't the poor on fixed welfare payments anymore. This is any household relying on a fixed payment salary as well anymore.
Jimmy I know im actually in the grocery business ... And I have witness myself prices going up ... that  one of the reasons  I'm really Instrested in this topic .. Because in the last 2 years everything has gone up and it feels that less  cash money is in circulation in the neighborhoods  but  a increase in government benefits have risen example more unemployment cards more foodstamps and Wic
@ Bryan  books sounds great  ..  That first book  sounds very good  . Always good to expand my mind .. ThanksÂ
You know, Bryan, it is apparent from this post that you have done quite a lot of reading on the subject, or at least know the source of a lot of info on the subject.
I am far from an economics expert, and am just working my way through this type of information as a layman, to see how it could affect me and what action I could take to minimise risks.
What interests me is that the shadowstats site you recommend is incredibly pro-hyperinflation, and yet you are not convinced.
As I said, I am no expert. But the things that have concerned me over the past few years are
1. the Baby boomers needing to cash in 401Ks at 6% from 2012... if so many people *must* cash in, given the current state of play, most of the western world at least seem to be going through a time of saving, not investing ... who will buy the stock? Will it result in a crash?
2. If you compare the value of the Dow to commodities over the past few years, even though the Dow is hitting *highs* in USD, it is steadily declining in value against oil/wheat/gold/silver ... which would indicate that both the dollar and the Dow are overvalued, and using one to evaluate the other is a bit misleading.
3. No one wants the US to engage in quantitative easing, because it devalues the USD against the other currencies, and with the American market being pretty much the largest in the world for most things, we don't want to be hindered by things like a USD that is losing value. A currency war is inevitable if the US is too obvious about devaluing the dollar.
4. The US Fed has increased the money in the system by more than 200% over the last few years, and the amount of debt available, it has fallen to a low never seen before since the before the great depression.
5. The first QE of $2T seemed to not have enough strength, unemployment continues to rise; is a further $600B really going to make a difference?
6. 1 in 4 kids in the USA are already benefitting from food stamps
7. How on earth with the US government come good on Medicare/Social Security for the baby boomers? I have heard (not checked) that they are looking at $76T needed to be covering that.
And most basically of all ... if the Fed is loaning the Dollar to the US government at 6%, and the Fed prints the dollars, how on earth is that sort of system sustainable? If you don't have the capacity to generate your own currency, how can you repay interest on it?
Personally, I *am* getting into precious metals as my strategy. I *am* reluctant to hold things in credit. I *am* taking a very close look at leveraged positions to see how sustainable they might be in a hyperinflationary period.
I don't purport to really understand it all ... I am trying and learning ... but I really do have grave concerns about a good many issues around hyperinflation.
I agree with a lot of what you said Cate and I am hedged for inflation too. Hyperinflation is a big stretch though IMO. People mix the two concepts like they are the same when they are DRASTICALLY different.
Many of the best sites, reports, books, etc. on the subject err on the side of sensationalism TO SELL BOOKS, ADS, etc. though. As I read more I realize this and my guess is that others will too.
This thread has many undertones that have spilled over from other threads and my point was mainly to try to highlight incorrect information from other posters that regurgitate sound bites from idiots on TV. I am not saying that we are in for peaches and cream going forward...just that financial doom isn't coming.
There really aren't many things that can be done to protect yourself from hyperinflation and buying precious metals won't work either. The government generally confiscates precious metals during periods of hyperinflation.
I bought in condo in California for 172,000 in 2002. By 2004 it was going for 335,000.
Yes. I believe in hyper-inflation.
Do I believe it will show up again soon in another sector. Absolutely. I am "gambling" my money that it will be in precious metals and food. Yikes!
What I love about biggerpockets is that I am learning from the talented investors here how to not be such a speculator in real estate.
I do not believe we are going to see the old school weimer germany hyperinflation in the US. But we certainly will see some interesting and painful hyperinflationary bubbles in certain sectors, I speculate.
I'm not talking about apartheid, politics, or even currency. I'm simply questioning why we place value on seemingly useless things?
Let's consider two fictional countries, Foodland and Goldville. Foodland has a population of intelligent, hard-working, innovative people who manufacture food, energy, and technological products. Goldville just happens to sit on a large vein of gold.
Under our current principles of value, the people of Goldville needn't lift a finger to survive, except simply scoop handfuls of gold out of their rivers, because they can simply purchase all the necessities of modern life from Foodland with their gold.
However, what will Foodland do with the gold they collect? At some point, they will realize this wonderful shiny metal is rather useless and stop trading with Goldville.
As we can see, gold isn't any different than fiat currency, i.e., it's simply worth something because people believe it is. I believe that is one reason we got off the gold standard. It simply didn't make any difference if our faith was in something tangible or not.
Blasphemy Mitch!
The CFR people that rule the world are playing us like a complicated game of Risk. Eventually they will execute their new world order and we will all be licking the boots of The Rothschilds.
Please silence your heresy. The almighty Fox News experts hath declared that hyperinflation is imminent and thus we should all fall in line or be labeled as the true liberals we are!
There is no time for reasoned debate. We must shout from the rafters about such matters while simultaneously lending money that will be worthless by the time the loan is due. It is, after all, completely rational to believe that hyperinflation is right around the corner and to engage in financial behavior that will bankrupt you when the wizard unleashes his plan!
OMG! There are several pilots at my airline who would simply fall over dead if they saw anybody call me a "liberal". That is too funny!!!
I consider myself fairly moderate - fiscally conservative while socially progressive. But I see the Republicans and Democrats both equally inept at solving our economic problems. I don't think they're all necessarily idiots (some definitely are), but their priority is and always has been political maneuvering for the purpose of gaining power. IOW, it's all about votes and nothing else matters.
The party out of power always benefits when the party in power is perceived to be screwing everything up, although few people appear to realize the alternative isn't offering anything much better, or different. No wonder we see the pendulum swing every 6-8 years. It takes that long for everybody to forget that the other side was just as stupid as the current side.
What if I prefer a pound of useless Moon rocks? Will 16 ounces of gold buy that? :mrgreen:
You see, the only reason you'll trade food for gold is because you know somebody will gladly give you something else of value in exchange for the gold. What if you were stranded in the Sahara Desert for 5 days without any supplies. Would you trade a pound of gold for a pound of water?
How about this, I give you a pound of gold in exchange for a pound of fresh ahi tuna (naturally you'll throw in an few ounces of wasabi and a bottle of soy sauce). However, since I will be consuming the tuna, I will not be able to exchange it for anything else of value. YOU MUST DO THE SAME WITH THE GOLD! IOW, you and all your heirs must hold onto the gold and never exchange, sell, mortgage, or otherwise convert the gold into something else. You must hold it forever. It's not so valuable now, except maybe as a top-notch paper weight, is it?
The only reason gold, sand dollars, or glass beads ever had any value is because they could be exchanged for something useful. Just by themselves, they're pretty worthless - just like fiat currency!
Not to mention the fact that the government will CONFISCATE the gold during hyperinflation too Mitch. That has already been mentioned and ignored like most other rational arguments in this thread.
BTW...My friends would fall over laughing if anyone labeled me a liberal too. I am also very moderate on most matters too and fall WAY right of center. Some of the members of this thread are brainwashed by people with scarcely a high school education and want to preach about things like this on every single thread. It is quite entertaining!
Bryan, there are many who have been working and studying this topic diligently beyond the highschool level through self study at the University of Fox News and Professor Beck.
So, if enough people believe in something, will that make it reality?
Mitch, good point along the principal of the marginal perpensity of consumption!
Come on, Bill...you're not giving the guys in this thread enough credit...
Some of them are cutting and pasting Wikipedia articles and creatively making stuff up as well...they deserve a little credit for that too!
Of course, I'm sure Sarah Palin will get us out of all this trouble when she gets elected by the 18% of Americans who say they'd vote for her... :lol:
Hyperinflation, by its own definition, is not acheivable IMO.
It's like going hunting for a chupacabra - you might shoot one ugly *** goat - but it's not a chupacabra.
In other words, I think we are in for a prolonged period of stagflation, not hyperinflation.
TC
I don't think anyone implied that gold was any more or less useful than any other fiat currency during a typical inflationary period. And during a hyperinflationary period, gold is much less useful than other things -- like guns, food, etc -- things that we would never consider backing our currency with.
So, during inflationary and hyper inflationary periods, there is nothing intrinsic about gold that makes it better or worse than other typical fiat currencies.
And, the big difference between the US and hyperinflation in other countries is that the US can produce enough grain, clean water, and fuel to help ensure that the trademark effects of hyperinflation won't occur very easily...if at all...in this country anytime in the near future...
Good point Jason, that's why they called it, "The Land of Plenty", !
While gold has intrinsic values, used for flaunting wealth, medical applications and electronics, in really chaotic times Tom, IMO, gold might not get you what you want.
Moving on to the graduate level, Byran, (lol) that would be beyond Fox U., there are survivalist schools of thought for hording gold. The Freedom Militia School of thought being that you can buy ammo with gold, but as Micth pointed out above, at some point my ammo will be worth more then your gold, depending on the circumstances (if you believe in that kind of stuff) my ammo will be worth more to me than any amount of gold, since my rifle won't shoot gold and it would be very hard to digest! While someday I, or my kids, might accept chickens and lamb as rents I don't see turning my greenbacks into gold, maybe more land with good live water, or adding armor to the Navigator, but not gold. LOL!
Dang Tom. The liberals think we should have guns and ammo. I never thought of that, did you? Where would we be without their direction? :lol: :lol: :lol:
I'll bet their next tip is that we should consider storing food.
(As an aside note, it appears our tactic of secretly converting them to conservatives is working. We'll have them calling a tax cut plan an economic stimulus before long.)
Nope...I think the next tip is for the "liberals" to ignore those on this thread that have no idea what they are talking about.
I agree! And, I think that's a heck of an idea, cutting the withholding tax to put more money in the pockets of working people so they will end up spending it on guns and butter rather than investing it in tax exempt bonds! That's a great idea guys, those liberals should have thought of that!
Now, I have to go, the rocket launcher on the Navigator is jammed, anyone know a how to release the elevation ring gear? I need to get it fixed before I get to the commissary.
Matty,
Your point about sector by sector hyperinflation is fascinating. I'm going to have to go deeper into that. You may be on to something big there.
Turns out an injector pin droped and jamed the elevation, I need to trade that off for a good ole dependable 50 cal!
I agree Tim, Matty has a good point and one that we have already gone through, remember the gas lines? Certain events locally can trigger economic ruin for awhile and can be lasting for many, just as Katrina was for those who were uninsured (and some insured since the companies didn't pay off). Food is a concern, poor growing seasons have happened before, while the price of a hamburger at McDonnalds didn't go up, they didn't put tomatoes on. I really don't see gold changing the fact that I can't get tomatoes, if they don't have them, they don't have them!
What you might be more concerned about is China holding our debt and extending more credit. Does anyone remember Bin Laden say that they would bankrupt America? So far, I have not heard of any connection with the financing schemes of Bin Laden (kinda hurts even capitalizing that name and using it as a noun) with China, but would not be surprised. I believe that old enemies who become friends are just friendly enemies. And if one king fails to pay another, the creditor king simply finances the enemies of the debtor. Well, I'll save the rest for my militia blogs and tin hat friends.
Bryan makes a very good point in that many of the relationships used to support the economic theories are false, that the inter-relationships of economic indicators and indexes are incorrectly applied and illustrated by those with an agenda. The old, "let me show you the facts" ploy. As I said waaay up there, hyperinflation may be possible but improbable.
As to hedging, I believe it's possible for the dollar to lose value, but not so much that it would be replaced on the streets with any commodity like gold or goats. What about hedging with stronger or other stable currencies? During WWII the dollar was accepted in Europe, more so than local currencies at times.
After all, hundreds of years ago, even with coinage, commodies were traded for goods and services, it just to be a real hassel carrying that chicken around to trade with, even the gold got heavy and was hard to measure, so I'll stick with at least that much progress and use paper, at least of some kind. Now, I have to go rotate my seed collection, Later....
Isn't this thread supposed to be about hyperinflation? I know some people have problems with getting pummeled on the facts and would like to talk about whatever random things are on their mind, but this isn't your diary.
In an earlier post in this thread, you were suggesting that the U.S. government should covertly assassinate a private citizen of another country for doing something that wasn't illegal, but that you personally didn't like...
Is that the type of conservative you're trying to convert us to?
Hate to burst your bubble, but real Conservatives fight to uphold Constitutional Rights, even for those we might not like or agree with...
I'm clearly more Conservative than you...
I guess I should be more like a real Republican and vote to spend $700B on bailing out the banks...
Of course, if you watch Fox News, there is a 62% chance that you wouldn't know which President I was referring to...
I know I am late to the conversation but here we go.
Is it possible that this country could face a period of hyperinflation and a devauling of the dollar?
The answer is yes and anyone who argues otherwise has a basic lack of understanding the current monetary policies of this country.
Is it inevitable that the country will face hyperinflation?
No. However, if current economic policies continue then it will become inevitable.
Reasons why hyper inflation is a very real possibility.
- Currently the dollar is the world's reserve currency so right now foreign countries must trade with each other in dollar amounts. (ex. When Italy buys natural gas from Russia it pays for it in dollars. Or when India sells crap to Germany, it takes payment in dollars.) This forces all foreign countries to hold a reserve amount of dollars in order to complete trades. If the faith in the dollar starts to wane then these countries will start using other means to complete trades. (just like [/url]http://www.ibtimes.com/articles/85424/20101124/china-russia-drop-dollar.htm )
If foreign countries start making trades without using the dollar then the demand for dollars drops instantly. So, while the demand for dollars drops the supply will continue to increase. When dollar supply outweighs dollar demand what happens? Inflation
When foreign countries realize that they cannot get rid of the dollars that the United States hands out for goods they stop shipping their manufactured goods to America. The lack of goods available for purchase will cause the price of the goods still in the country to go up even more. More demand, less supply will cause more inflation. It is like a snowball rolling down hill it will just continue to grow from this point.
Will the country collapse? I don’t think so, but Americans will be forced to accept a much lower living standard.
Hyperinflation is a very real threat and anyone who says otherwise is just sticking their head in the sand.