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The predicted hyperinflation might already be here

Food for thought.

16 comments to The predicted hyperinflation might already be here

  • staghounds

    Predicted? It’s already happened.

    The pound has lost, what, 95% of its purchasing power over the last 50ish years? And the dollar about 90%.

    The hyperinflation is just slow, but it will keep speeding up. In 2016 years ago the U. S. federal government debt was 19 trillion, now it’s 28 trillion. Nine trillion dollars of bad checks in five years.

  • Carnivorous Bookworm

    The pound has lost, what, 95% of its purchasing power over the last 50ish years? And the dollar about 90%.

    But is that actually true? How many hours does the average person in UK or USA have to work to have enough funny money to feed themselves daily compared to 50 years ago? How long to have enough to buy a set of clothes? And how much did a laptop & an internet connection cost 50 years ago?

    Maybe the crude numbers don’t mean what you think they do 😉

  • staghounds

    I didn’t say the working hour had lost its purchasing power, I said the money had.

  • Paul Marks

    Inflation is not just the “rise in prices” it is the distortion of the Capital Structure of the economy – and that has most certainly already happened.

    The handful of giant corporations (“Woke” to the core) dominate the economy – they are the products of the distortion of the capital structure of the economy by credit-money expansion.

    Will it get worse? Of course it will – with the antics of wild government spending and credit money financed the economy is not going to go well. Most people are not going to do well.

    Get yourself real skills – and move to somewhere fairly small and where the the population is at least mostly made up of people you relate to (can trust).

    The big cities will continue – but quite a few of them are not going to be very nice places to live.


    Sir Karl Popper thought that New Zealand was out of the way enough, and had enough resources, to be a good bet in very hard times. New Zealand has gone P.C. in recent years – but perhaps that will change.

    Australia may get by as well.

    The United States is in for a lot of violence – and its establishment is rotten to the core.

    As for the United Kingdom – a country this densely populated? Best not to think about it too much.

  • Guy from Gundagai

    Australia may get by as well.

    if the plandemic has proved anything, Aus is already a thuggish police state. I’m trying to move to Singapore, which is at least a benign police state.

  • Paul Marks

    Guy from Gundagai.

    Is it not the case that Sydney and Melbourne have followed rather different policies – the old rivalry between New South Wales and Victoria?

    As for Singapore – well I leave that to your judgement Sir.

  • One of the worst things about moderate inflation is the capital gains tax. About hyperinflation, the Weimar Republic found, was the ever-increasing price of wheelbarrows to carry the money. And for Zimbabwe, they were running out of space for the zeros on their currency. (I looked on the Net, and found a picture of a hundred trillion dollar bill. Why, that makes the US national debt seem picayune!)


  • Lee Moore

    I thoroughly recommend this book on the German (and Austrian and Hungarian) hyperinflation in the early 1920s. Interesting and well written.


  • Fraser Orr

    FWIW, there is an important detail that the video (which, BTW was very interesting). Namely that the US government has already taken on the solution to currency inflation mentioned, namely massive, massive amounts of debt. The most obvious example of that is that fact that the US government’s debts are almost always denominated in US Dollars. To give a very important example — your social security promise is denominated in dollars, so the more money the government prints the less they have to pay to the social security recipient. So basically it is ripping off old people and debtors, much as the bank would not be too happy that you paid off your house with a marble.

    One of the things I find revealing about modern monetary policy is the view on taxes. A drastic summary of “modern monetary policy” is that you don’t worry about borrowing, because your economy will grow to fill in the gaps. But my question then is: why tax people at all? If you can just borrow the money do that. At least you will leave all that tax money in the hands of productive people who will spend it and invest it — two things crucial to providing the growth your theory needs. But of course that reveals the truth — taxation is mainly about punishing the rich and controlling the rest of us and giving politicians pyrrhic victories that they can blab to the unthinking voter.

    I find it hard to comprehend that Biden is rambling on about big tax increases when he has just had four years of schooling to show him that tax decreases improve the economy, not the other way around. But since the guy doesn’t seem capable of remembering what he had for breakfast, never mind what happened two years ago, perhaps I shouldn’t be surprised.

  • Paul Marks

    Fraser Orr – it is not just that Mr Biden is a puppet of the far left (although he is), it is also that he was always a Collectivist.

    Yes Mr Biden is corrupt – but like Speaker Pelosi and all the rest of the corrupt Democrats, he also has a terrible SINCERITY.

    The cult of “Social Reform” goes back at least to the 1870s in Britain (to Disraeli) if not long before – Edwin Chadwick and so on. But for Mr Biden and Speaker Pelosi the key text (without them even reading it) was in 1891 – the Encyclical by Pope Leo XIII, it is not that they have actually read it or even that they are devout Roman Catholics (they actually despise the teachings of the Catholic Church – on abortion and other matters), but they were brought up with the idea that government can-and-must HELP THE PEOPLE.

    The Trump family in New York regarded the government as parasites – that one had to bribe so they would leave you alone and let you build things. But people such as Joseph Biden and Nancy Pelosi, indeed all Democrats, regard government power as a “Positive Good” in-its-self – Bigger Government AUTOMATICALLY “helps the people” – and so even though they take bribes and so on they are utterly sincere in their fanatical belief in Bigger Government – more spending, more regulations, every aspect of life controlled from the “Cradle to the Grave”.

    One could take Nancy Pelosi to Baltimore and try to explain to her that the policies of her family (they controlled the Democrat Machine there) ruined the city – but she would not believe you. After all she and the people she controls are ruining San Francisco and California generally with the same polices.

    As for the Republicans – a certain type of Republican also sees government as a POSITIVE FORCE, this sort of Republican looked (or their ancestors did) to Disraeli and Bismark as models of what a conservative should be – how the government should be used to “help the people”, but with certain old families (such as the Bush family) in charge – who have received the “best” education and are members of the “best” clubs.

    Underneath his Texan accent George Walker Bush was an aristocrat to the core – one of the top schools in the nation, and then both Yale and Harvard.

    Like the Democrats this sort of Republican also believes that government is a POSITIVE FORCE which can and must HELP THE PEOPLE.

    The idea that government spending and regulations might be harmful (indeed that these things are naturally harmful) would never occur t them.

    Like most other Western countries – the elite of the United States is utterly Collectivist.

    As for Donald John Trump – utterly pragmatic (not “Pragmatic” as in the American School of Philosophy known as “Pragmatism”) – he could be influenced in a smaller or bigger government.

    When the establishment said that President Trump was unprincipled they were correct in that he did not share their principles – but they forgot to mention that their principles are utterly evil.

    One could convince Donald John Trump to have an open mind to deregulation and so on – because he wanted people to be prosperous and happy, so that they would like him. It really as simple as that with him – he wants people to be happy and prosperous (and like him) and is open to any policy that might achieve that.

    But someone like Joseph Biden, even as a young man, is totally closed to free market market arguments – because (in spite of being corrupt) he has principles, convictions, and they are the principles (the convictions) of COLLECTIVISM.

    It does not matter that Nancy Pelosi is in her 80s – when she was in her 20s she was just as closed minded. Had you suggested to young Nancy in 1961 that President Kennedy’s “Food Stamps” were a bad idea – she would have assumed you wanted the poor to starve to death. And if you suggested that the 1962 FDA “reforms” were a bad idea, she would have assumed that you wanted people to die of poison. As for the FCC “reforms” under President Kennedy – clearly “needed” to prevent “reactionaries” having a voice in American television entertainment shows, all entertainment must be “Progressive” – the establishment believed that even 60 years ago.

    Collectivism is not some suit of clothes for these people – it is WHO THEY ARE. They are quite prepared to see the United States utterly collapse (be totally destroyed), rather than change course.

  • Johnathan Pearce

    Paul is correct that it’s the capital structure distortion that’s one of the big effects. Its a reason why certain sectors such as Big Tech and certain other fields are awash with cash.

    Zero/negative rates destroy real savings and capital, ultimately hurting investment and hence real income growth. This is one of the most important insights of the “Austrian” school of economics.

  • Lee Moore

    Another feature of hyperinflation is that it reduces taxes paid in arrears (ie income tax, corporation tax etc, not VAT or PAYE) to zero. So of the taxes that are actually paid, the poor and middling pay all of them and the rich pay none.

  • I find it hard to comprehend that Biden is rambling on about big tax increases when he has just had four years of schooling to show him that tax decreases improve the economy, not the other way around. (Fraser Orr, April 12, 2021 at 1:25 am)

    I suspect I am not in fact telling you anything you don’t comprehend well enough when I point out that for Biden to admit the obvious about any Trumpian achievement even in the privacy of his own mind risks admitting the obvious about his own fitness to be president. Biden’s vanity was well schooled in not noticing humiliating facts long before Trump appeared on the political scene.

  • Jon Eds

    We’ve been spending a lot of money not eating dinner out, not going to the football, and so on. If paying lots for nothing isn’t inflation then I don’t know what is.

    More seriously, households and companies have been saving a lot of money during the lockdown; at least those fortunate enough to have a job/remain profitable. Once this starts getting spent then maybe inflation will kick off.

    Generally, I suspect that the reason inflation hasn’t resulted from rampant money printing is that a lot of that money has been spent on counteracting deflation. If the government fired all those diversity coordinators that should certainly result in cheaper house cleaning services, better street cleaning…

    There is a lot of talk about malinvestment, but in my view malconsumption is more relevant to our current situation.

  • Myno

    “malconsumption” sounds like Newspeak.

  • Alex

    This afternoon it has been announced that Andy Haldane, chief economist at the BoE, will be moving on to a new appointment at the Royal Society for the Arts. Described as a surprise announcement in various articles, it comes after Mr. Haldane has been one of the only senior economists at the Bank to warn that the current massive fiscal stimulus programmes could lead to significant inflation.

    Surprisingly (given his previous form) even Mervyn King has been making cautious noises about stimulus programmes domestic and foreign in the last few days, so it seems that there’s a bit of a power struggle happening in the circles of the BoE at the moment (I am aware he’s retired). I wonder if Mr. King will have an unfortunate accident in the near future.