Jump to content
Sign in to follow this  
Voltaire

Funeral Services for The "Hyperinflation is Coming" Thread

Recommended Posts

http://www.fftodayforums.com/forum/index.php?showtopic=365391

http://www.bing.com/search?q=fftoday+hyperinflation&go=Submit&qs=n&form=QBLH&pq=fftoday+hyperinflation&sc=0-8&sp=-1&sk=&cvid=ca0179646a5e416e9087d25707db6e9f

https://www.google.com/#newwindow=1&q=fftoday+hyperinflation

 

My friend, I'll miss you. :(

 

So when it was posted I said it was ridiculous, illogical, and impossible. Then I gave the supporters ten years to see if hyperinflation would come. In that time, we've continued to have near zero inflation (as measured by the CPI).

 

Now, I've bumped that thread faithfully most every month for 4 1/2 years and went in there today to do the same. Supporters still had another 5 1/2 years to get to hyperinflation. Since the thread appeared, Ben Bernanke has already left the Fed, and Obummer only has another two years left to cause hyperinflation.

 

Does it being deleted and supporters not posting in it anymore mean that I won that thread? Does anybody still think that hyperinflation is coming?

Share this post


Link to post
Share on other sites

I bumped you for 4 1/2 years. :cry:

 

Why did you have to get deleted before your time was due? :cry:

 

How can I gloat? Who am I going to prove my economic prognosticating superiority to now? :cry:

Share this post


Link to post
Share on other sites

Curious of your thoughts about the US paying down its debts to China? Serious question.

Share this post


Link to post
Share on other sites

Curious of your thoughts about the US paying down its debts to China? Serious question.

It'll never happen. If by some miracle, economic growth ushers in a budget excess, that extra money would be pumped into spending somewhere or tax cuts. In today's Washington, simply balancing the budget is never on the agenda. Going beyond that to actually paying down debt is way beyond the pale.

 

Honestly, you look at all the hard work and difficult choices that Clinton/Dole/Gingrich went through to include two government shutdowns- we had very serious dedicated public servants to get that done. The two sides went about it much differently, but they were both committed to proper, responsible governance. And we as a nation benefited. The responsible people get churned out of office and all that effort got tossed out the window when the Bushtard came along and for eight years made nothing but easy/irresponsible budget choices. Then Obummer comes in with a non-stimulating stimulus, shows where his priorities were off the bat.

 

I don't see the adults anymore. The generation of civil servants like Alan Simpson and Erskine Bowles is gone/ignored. With Bush and Obummer in the last 14 years, we certainly hasn't a shred of evidence of fiscal discipline at all. Future obligations are piling up and the tax base to support it isn't going to be there. We're already seeing the effects of that now the government is always squeezed for cash. They can't/won't cut spending, they can't/won't raise taxes.

 

Or it could be I'm wrong and the economy is sustainable indefinably and can grow despite all this crushing debt obligations. I'd like to be wrong. I've been wrong so far. Fourteen years ago, I moved overseas and yet the collapse I predicted didn't come. We're (Generation X) certainly worse off and were more screwed than previous generations. But I always imagined this debt obligation ending the same way it does for Wile E. Coyote the moment he looks down. Nowadays, I'm less certain that we're going to run off the cliff. Instead, maybe this constant downward constraint and sluggish/non-existent growth in our non-recovery will continue instead.

 

Or maybe not. It could all turn around and be fine. The US economy has hidden strengths that I'm more aware of now than I was back then. US debt is owed in US currency, something Greece and Spain don't have going for them. Economic growth could kick in and right the ship and solve these problems with little/no pain.

 

What of the future? Well, Hillary's husband was good for prioritizing that sort of thing, I didn't hear much of that out of Hillary in 2008. Meanwhile, deficit reduction make does at least make the GOP talking points but is always the agenda's unloved stepchild compared to tax cuts for the rich.

 

Paying down debt won't happen and simply not adding any more doesn't seem to be anybody's priority either. Social Security will run out of money just as Gen X enters retirement age. At that point at the latest, the government won't be able to dither anymore and will finally have to make some exciting choices. They'll likely have to fock Gen X in the ass even worse than they are now. That's why I made other plans.

Share this post


Link to post
Share on other sites

The only way out if paying our debts to China is war?

It would also take rewriting the Constitution:

 

The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. - 14th Ammendment, section four.

Share this post


Link to post
Share on other sites

It is costing us $9 billion a day to keep inflation at bay. We are currently riding a "Fed" bubble. This is an economic fact and nothing you post on a message board can change that.

Share this post


Link to post
Share on other sites

Is there such a thing as a debt, if you know the other person will never call it due?

Share this post


Link to post
Share on other sites

Well to help solve the mystery (a year or two old):

 

 

The economy of the past three years has puzzled experts and policy makers in all sorts of ways, but the greatest mystery has been the recent decline in the rate of inflation. That may not seem remarkable in a stagnant economy, except that all the major economic theories suggest that prices should now be rising at a fast clip. Like the dog that didn’t bark – which provided the crucial clue for Sherlock Holmes in the story Silver Blaze – the current absence of significant inflation provides a tipoff to what is really happening in today’s economy.

 

On a very simple level, inflation occurs when there is more money in circulation than there are things to buy. A big Federal deficit can increase the money supply, because it means either that the government is spending more or that tax cuts are boosting individuals’ disposable income. Low interest rates can also expand the money in circulation because they signal that the Federal Reserve is making it easier and cheaper for banks to lend. And an even more potent way for the Fed to intervene is through so-called quantitative easing – i.e., buying government bonds and effectively creating additional money out of nothing.

 

What’s most striking today is that all three of these factors are now at extremes that should be fanning the flames of inflation. Deficits of more than a trillion dollars a year are the highest in history. At close to zero, short-term interest rates are at their lowest level in more than 30 years. And the Fed’s monetary base has been expanding at an unprecedented rate. The remarkable thing is that none of this is translating into serious inflation. Over the past three years, some volatile prices, such as those for food and gasoline, have indeed gone up. But there still haven’t been sustained widespread price increases throughout the economy.

 

Generally speaking, inflation becomes dangerous when it exceeds 3%. Last year, the rate did begin to pick up and reached a disturbing 3.9% in September. But since then, instead of getting worse, inflation has actually slowed down again to a paltry 1.4%. The explanation is that all the money in the world won’t push up prices unless people are willing and able to spend it. So the dog that didn’t bark in this story is the money that didn’t get spent.

 

Because the 2007-09 recession hit the financial sector especially hard, banks are holding back on lending as they rebuild their capital. Many consumers are over-indebted and are trying to pay down their balances instead of borrowing more. In some cases, their credit lines are being cut or they are having a hard time getting additional credit. Depressed housing prices have not only slowed the turnover of real estate, but have also removed one of the cheapest ways of borrowing – home-equity loans. Finally, although companies are piling up huge amounts of cash, they have no reason to spend aggressively on expansion and new ventures when consumer demand is depressed and the financial and political outlook remains so uncertain.

 

More stimulus, by itself, won’t be able to get the economy moving again. The government can run a huge deficit, the Fed can hold interest rates down, and Fed Chairman Ben Bernanke can pump money into the system with a third round of quantitative easing, but that won’t necessarily make the economy speed up – at least not right away. On the other hand, the fiscal cliff, with its spending cuts and tax increases, could depress the economy further. So could a crisis in the euro zone that delivers a shock to the global banking system or a jump in oil prices induced by war in the Middle East.

 

What the economy really needs for a full recovery is time and stability. Once U.S. banks have cleaned house and rebuilt their balance sheets, once consumers have their debt under control and their home values have stopped falling, and once companies have to start putting their cash to work, spending will pick up. When that tipping point occurs, real estate prices will likely stabilize and then begin to rise again. The price of oil is also likely to start moving higher. By contrast, the outlook for bonds, especially low-yielding government bonds, is terrible. If the Fed allows interest rates to rise, bond prices would fall. And if inflation resurges, the purchasing power of the bonds’ principal would be eroded. If both things happen simultaneously, it could produce the worst bond market of a lifetime.

 

No one can accurately predict the timing of any of these changes, of course. And it’s worth keeping in mind that much of this may be beyond anyone’s control. Policymakers can put more money into circulation, but they can’t actually make it circulate. And they have even less influence on the euro zone or on Iran. The current stagnation may simply have to run its course. But once it does and the economy really begins to rebound, it could well be accompanied by a surprisingly fast resurgence of inflation.

 

Share this post


Link to post
Share on other sites

Has anybody been to the grocery store lately? Hyperinflation is alive and kicking everyone in the nuts.

  • Like 1

Share this post


Link to post
Share on other sites

Has anybody been to the grocery store lately? Hyperinflation is alive and kicking everyone in the nuts.

 

 

Sure, on pot-pies and Funyuns.

Share this post


Link to post
Share on other sites

Is there such a thing as a debt, if you know the other person will never call it due?

When you are paying $500 Billion a year in interrest it is a debt.

Share this post


Link to post
Share on other sites

When you are paying $500 Billion a year in interrest it is a debt.

This.

 

I agree that your sentiment is correct buy the interest was ?only? (for lack of a better word) $221B in 2014. It's not $500B but still way too much. We're lucky that interest rates remain so low. A modest uptick and $500B is not out of the question.

 

The $500B number you gave is ~how much debt was added just this past year.

 

Add that to the pile, the total debt is now $18.3T which is >107% of GDP. This sure seems unsustainable but I keep saying that every year and the bottom never falls out. Maybe it won't fall out, maybe it'll maintain a dampening effect that keeps the economy from roaring like the last six years of stagnant, underwhelming growth. Or maybe the economy can over come it. I dunno.

Share this post


Link to post
Share on other sites

This.

 

I agree that your sentiment is correct buy the interest was ?only? (for lack of a better word) $221B in 2014. It's not $500B but still way too much. We're lucky that interest rates remain so low. A modest uptick and $500B is not out of the question.

 

The $500B number you gave is ~how much debt was added just this past year.

 

Add that to the pile, the total debt is now $18.3T which is >107% of GDP. This sure seems unsustainable but I keep saying that every year and the bottom never falls out. Maybe it won't fall out, maybe it'll maintain a dampening effect that keeps the economy from roaring like the last six years of stagnant, underwhelming growth. Or maybe the economy can over come it. I dunno.

We are both wrong, it is $430 billion.

 

http://treasurydirect.gov/govt/reports/ir/ir_expense.htm

Share this post


Link to post
Share on other sites

We are both wrong, it is $430 billion.

 

http://treasurydirect.gov/govt/reports/ir/ir_expense.htm

I'm not sure what my source was but .gov at the Treasury Department would be the most accurate.

Share this post


Link to post
Share on other sites

So which queer was it that deleted the thread? Seems like a Henry Pilot move but I seem to remember it as a RLLD thread

Share this post


Link to post
Share on other sites

Watching a show about currency which mentioned hyperinflation. So I searched for the original thread, but I now know that it died prematurely. How far along are we now? 7+ years?

Share this post


Link to post
Share on other sites

Watching a show about currency which mentioned hyperinflation. So I searched for the original thread, but I now know that it died prematurely. How far along are we now? 7+ years?

It's birthday was in late February like 22-24 or so. Just over three weeks into each month I'd bump the thread. I would have forgotten which year but fortunately, I mentioned 4 1/2 years old in this thread so we can accurately trace it to seven years, two months, one week ago.

 

I figured if we go to nutso moron conspiracy theory fruitcake ecunomicks websites and look at stuff from 2010, we may be able to find where these koolaid induced hyperinflation predictions in the air... so I went and googled hyperinflation 2010 for us and dug up some...

 

http://www.shadowstats.com/article/hyperinflation-2010

 

https://socioecohistory.wordpress.com/2010/12/15/john-williams-hyperinflation-special-report-economy-and-financial-system-face-eventual-great-collapse-high-risk-of-ultimate-dollar-crisis-unfolding-in-year-ahead/

 

 

For the record, when the "Hyperinflation is Coming" thread was posted, the inflation rate was at or near zero. like 0.0-0.2% and the Fed was using all sorts of mechaninsms to prevent it from going negative. So while the worthwhile economists nationwide were all fretting all year about deflation and the problems associated with that and how to prevent it, along comes a totally absurd post in the Geek Club about "hyperinflation is coming".

 

The thing of it is, I can still lose. If Trump slaps an import tarriff on goods made in low wage countries, we'll see inflation and it might even double digit inflation. Inflation like that would be a bad outcome and I hope it doesn't happen. But personally, I think he should put those tarrifs on and risk it as it's for the best since it would promote manufacturing jobs being relocated domestically.

 

Cut to the chase, if I'm going to take a hosing on my bet that hyperinflation won't come in ten years, I'm more than happy to endure a thread loss on those grounds as Trump's promise to pull out of TPP and end NAFTA was his major selling point with me and other voters of Macomb County.

Share this post


Link to post
Share on other sites

The 'Hyperinflation is Coming' thread was posted in late February 2010 and would be over eight years old had it not been deleted.

 

It was RLLD's thread and there were about a half dozen or more people guzzling the kool-aid with him. Some of us disagreed, most memorably me. All the talk in 2010 was that the country was facing a deflationary risk, not a hyper-inflationary one. Then Ray made his absurd post. I told him hyperinflation wasn't coming and since waiting for it to come couldn't be open-ended, I gave him ten years for it to arrive.

 

That was 8 years and one month ago. He's got another 23 months for it to arrive. Maybe a nice trade war will backfire and kick in or something.

 

It's not cool to delete threads. We could have seen who was predicting what would happen and why and see what went right and what went wrong. And he never acknowledged that he was wrong or we were right, his mea culpa was in deleting the thread.

Share this post


Link to post
Share on other sites

Its difficult to have hyperinflation when every citizen is carrying enormous amounts of personal debt.  If unemployment spikes, you get a spike in debt defaults, which destroys money, which is deflationary not inflationary.  Easy credit first entered the American economy in the mid 1980s when loans got a lot easier to get and credit cards became ubiquitous, which spiked everyone's personal debt, which is probably why we haven't had bad inflation since.  Probably the only way to get high inflation now would be to implement some form of UBI and hand out money to everyone every week.

This isn't to say hyperinflation is impossible.  Its just that you would probably need some bank catastrophe that wipes out everyone's personal debt FIRST.  So you'd need to have great depression part 2 to destroy all debt, THEN you are free to create hyperinflation.

But if you look back at the last time America had high inflation in the 1970s, personal debt was relatively low.  That meant when the economy went bad, relatively little money was destroyed by defaults, which made the economy much more sensitive to inflation pressures.

Share this post


Link to post
Share on other sites

Riversco nailed it.  Debt is the enemy of inflation and we have plenty. Money is created for a sole purpose, to be spent. Inflation is the enemy of spending. 

Share this post


Link to post
Share on other sites
13 minutes ago, TimmySmith said:

Riversco nailed it.  Debt is the enemy of inflation and we have plenty. Money is created for a sole purpose, to be spent. Inflation is the enemy of spending. 

I will go with this. Not that I'm an expert. But, okay.

Share this post


Link to post
Share on other sites

I find that even the world's best economist are idiots. Unless they're talking about something after the fact. In which case, they are f****** experts. Look at 2007, 2008 for example.

 

I still openly marvel at what's going on right now. And I honest to God don't see it continuing. $60,000 pickup trucks and $600,000 homes are the norm these days. Who the f*** has that kind of money?

 

I mean, other than us 500 lb bench pressing, 12in diick having, supermodel wife banging types on the geek board.

Share this post


Link to post
Share on other sites

And while we're at it? I don't understand today's business model. The idea that random trip loans to make thousands of dollars putting s*** on the internet then I guess ultimately generates ad revenue? I don't think there's much of a bang for the buck there. And advertising is one of the first things they cut.

 

I just don't see how today's economy means anyting, because they don't make anything.

 

It reminds me of the days prior to the first.com bust.

 

Even companies that are massive dogs according to any basic financial measure are having monstrous IPOs based on what? Hope? Vapor?

Geez, just think about the payments on a $60,000 vehicle Plus insurance. Or the payments even with the 30-year mortgage on a $600,000 home.

I don't get it. I think most of today's economy is based on millennials getting massive amounts of help from their parents who are quickly running out of savings.

Share this post


Link to post
Share on other sites

So this thread is 4 1/2 years old and I mentioned the other thread was 4 1/2 years old, that means the original thread is nine years old. Still no sign of hyperinflation. Maybe 25% tarrifs on Chinese goods will trigger hyperinflation just under the wire. I support the tarriffs so if we get hyperinflation and I lose the thread, well, so be it.

Share this post


Link to post
Share on other sites
18 minutes ago, Voltaire said:

So this thread is 4 1/2 years old and I mentioned the other thread was 4 1/2 years old, that means the original thread is nine years old. Still no sign of hyperinflation. Maybe 25% tarrifs on Chinese goods will trigger hyperinflation just under the wire. I support the tarriffs so if we get hyperinflation and I lose the thread, well, so be it.

The original thread doesn't exist anymore.  Was it RLLD's thread?  Did he Peenie it?

Share this post


Link to post
Share on other sites
On 5/24/2019 at 4:11 AM, wiffleball said:

I still openly marvel at what's going on right now. And I honest to God don't see it continuing. $60,000 pickup trucks and $600,000 homes are the norm these days. Who the f*** has that kind of money?

 

 

Do you bother to read what you post?

The median price of homes currently listed in the United States is $289,900 while the median price of homes that sold is $234,500.

 

Share this post


Link to post
Share on other sites
On 5/24/2019 at 7:11 AM, wiffleball said:

I still openly marvel at what's going on right now. And I honest to God don't see it continuing. $60,000 pickup trucks and $600,000 homes are the norm these days. Who the f*** has that kind of money?

Me? :dunno:

Share this post


Link to post
Share on other sites
25 minutes ago, sderk said:

Me? :dunno:

#metoo

Share this post


Link to post
Share on other sites
9 hours ago, Strike said:

The original thread doesn't exist anymore.  Was it RLLD's thread?  Did he Peenie it?

Yeah, RLLD.

I use to bump it every month until one month I couldn't because the link was dead. I presume the monthly drip-drip-drip reminders of no hyperinflation on the horizon must have annoyed him.

The system is kind of set up that a healthy bit of inflation is 1-3% and at the time of RLLD's post, the alarm was the the inflation rate was at 0.0 or 0.1 and the fear of it getting to negative inflation, entering a Japanese style cycle of deflation feeds itself into oblivion, was real. If inflation goes negative, you're well advised to convert cash to gold and hide it in your mattress or dig a hole in your backyard or in your drywall than have your money in the banks. Try to weather the storm.

So the Fed printed a lot of money ("quantitative easing" is just a nice, confusing technical term for printing a lot of money) and RLLD went nuts, and eh, it shows he was paying attention to that part at least. My thinking was that once the inflation rate rose to 0.5-0.8% or so, out of code red danger, they would turn off the spigot.

But yeah, after reading about zero inflation and the threat of deflation for weeks on end, finding a post worrying about hyperinflation in the Geek Club made me laugh at the bizarro world idea.

Share this post


Link to post
Share on other sites

Can we bury it next to his "We are at peak oil thread"?

  • Like 1

Share this post


Link to post
Share on other sites

Short version: 

we have inflationary policy, but it is not causing inflation because of the ridiculously high record levels of debt across the economy that is destroying money.  When people go hundreds of thousands of dollars into debt to get a degree, you can turn the spigot on and slosh money everywhere, but adults in their prime spending years will just take that money and pay off a bit of their college loans / car loans / mortgage with it instead of circulating it in the economy.

If the government forgave everyones debt obligations, inflation would go nuts.

This chart is all you need to know:

https://www.creditwritedowns.com/wp-content/uploads/2008/07/household-debt-vs-savings.png

Americans are carrying an average debt of around $100,000.  If you want to create inflation, you'd have to first hand out $100,000 to everyone or erase their debts.

Back in the 1970s, when inflation was high, Americans carried an average debt of around ZERO.

Share this post


Link to post
Share on other sites
5 hours ago, Cdub100 said:

Are we still laughing? 

No.

My ten year window expired. 

Extraordinary efforts to ward off a deflationary spiral in 2010 when inflation was at 0.1% or so and sinking were needed at the time. And that worked. To worry about hyperinflation when battling deflation was absurd, once out of danger, the Fed could shift gears.

 
 The Fed in 2021 is dealing with a different set of challenges, a one year $3.3 trillion deficit piled on top of the other deficit spending we’ve been seeing for 20 years. Its not the same crisis.

Share this post


Link to post
Share on other sites
1 minute ago, Voltaire said:

No.

My ten year window expired. 

Extraordinary efforts to ward off a deflationary spiral in 2010 when inflation was at 0.1% or so and sinking were needed at the time. And that worked. To worry about hyperinflation when battling deflation was absurd, once out of danger, the Fed could shift gears.

 
 The Fed in 2021 is dealing with a different set of challenges, a one year $3.3 trillion deficit piled on top of the other deficit spending we’ve been seeing for 20 years. Its not the same crisis.

I agree. I don't think we will have hyperinflation but it will be bad.

Share this post


Link to post
Share on other sites

Boats have gone up 50% in 2 years.

 

2 years ago a 23 foot regulator with twin 150s was 100k, now they are 150k.

Share this post


Link to post
Share on other sites
20 minutes ago, MTSkiBum said:

Boats have gone up 50% in 2 years.

2 years ago a 23 foot regulator with twin 150s was 100k, now they are 150k.

And yet your mom's prices have stayed steady all these years.  :thumbsup:

Share this post


Link to post
Share on other sites
3 hours ago, MTSkiBum said:

Boats have gone up 50% in 2 years.

 

2 years ago a 23 foot regulator with twin 150s was 100k, now they are 150k.

A lot of people want a boat to get the hell out of the country before it implodes.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

×