Inflation to Hyperinflation

ww1czechlegion

ww1czechlegion

Well-known member
How is everyone loving the 85% increase in gasoline prices since December of 2020 until today? (at least from where I live. $2.15 per gallon in Dec 2020 to $3.99 currently where I live). Yes, I realize we have it very good in the U.S. compared to Canadian or European gasoline prices.

And the food price increases of 28% to 32% just in the past 2-weeks time that I am seeing with many basic staple items that I am purchasing, nothing fancy or exotic or pre-made processed foods. This is not even counting the increases in February, or earlier before that. 28% to 32% jump in just the past 2-weeks time. Is anyone noticing how huge the increases are with food prices?

Amazing? How long before real "hyperinflation" kicks in and then we'll really have fun...

I'm sure everyone in the U.S. is waiting eagerly for the eternal damnation of "Wiemar Germany Inflation"...
 
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Hi Alan,
There are simply too many assholes-speculators in our modern world. Just waiting for or generating a new crisis to make some big profit, even for things that have absolutely nothing to do with the crisis. This is modern robbery, the dark side of globalisation :devilish: And the media are doing the rest :mad:

Philippe
;)
 
Economics 101: The problem, of course, is money-printing, by the Federal Reserve, done to finance all of the big-spending government pork programs.

Here's a Feb. 25 tweet from the man who knows more about inflation than anyone, Johns Hopkins University professor of economics Steve Hanke, showing the proof of it:
https://twitter.com/steve_hanke?ref...022/03/biden_goes_bonkers_over_inflation.html
Pres. Biden and the woke media have a new inflation boogeyman: Vladimir Putin. The Russia-Ukraine crisis has NOTHING to do with inflation. Current U.S. inflation is at 7.5% because the US money supply has increased by an unprecedented 41.2% since Feb 2020.
https://twitter.com/steve_hanke?ref...022/03/biden_goes_bonkers_over_inflation.html
Increase your money supply, increase your inflation, this isn't hard to understand. Power Line has some excellent charts showing it for those who prefer pictures. In Hanke's WSJ essay last year -- which correctly forecasted this inflation picture today -- he and economist John Greenwood explained that the "monetary bathtub is overflowing" found here: https://www.wsj.com/articles/monetary-bathtub-overflowing-inflation-drain-transitory-11634847429.

Update: Here is their latest, which ran in the Wall Street Journal Friday.

Oil prices, which some incorrectly see as the root of the controversy, are just one part of the inflation basket that creates the big inflation number -- the actual root of the problem is the money itself, the thing that measures the value. Plenty of places around the world pay higher energy prices than we do, but sport either no or low inflation, and the problem actually evens itself out without spreading through the economy. But when money has no place to go, no place to serve as a productive vehicle, because there is too much of it floating around -- then inflation hits everything. Inflation is the backwash of money with no place to go -- the monetary bathtub flowing over, or given the worthlessness of these government spending programs, the monetary toilet overflowing.

The 7.9% inflation printout that Biden is now trying to pin on Putin is a February year-over-year number, meaning, Putin's activity couldn't have influenced it even if such a thing were possible.

"Inflation is always and everywhere a monetary phenomenon," as economics giant Milton Friedman laid it out ahead of the mighty Reagan-era boom that put paid to the Carter stagflation era.

But at least Jimmy Carter, with his sweaters and small is beautiful rhetoric, knew there was an inflation problem. Joe doesn't.

"Milton Friedman isn't running the show anymore," Biden declared as recently as 2020 and, well, yeah, with the February report showing 7.9% year-over-year, we know.

This is what the U.S. looks like without Milton Friedman running the show anymore.

For Joe, the problem is the reaction to the inflation, not the inflation itself. Apparently, voters are supposed to deny it, blame producers, call it a good thing, or do what Biden does, which is Blame Putin.
 
Here's a chart which shows the "year on year" from February 2021 to February 2022 mind-numbing, staggering, across the board increases in commodity prices:


Nickel leads the pack with a whopping 201% increase, followed by Heating Oil, Natural Gas, Wheat, Lumber, Crude Oil, Coffee, Aluminum, Gasoline, Cotton, Corn, Soybeans, Sugar, Gold, Copper, etc.

Here's a chart showing what gas prices have done per gallon across the board, all blends, since July of 2020 in the U.S.:

 
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I doubt we'll see hyperinflation, but instead will likely see a prolonged period of high inflation, which will likely lead to a recession. The people who have the most wealth have the means to ensure we don't reach a level of hyperinflation, as it would impact them whereas the high inflation and a recession will impact those at the bottom the hardest. The government isn't facing any conditions that would result in hyperinflation.

Don't get me wrong, I'm not a socialist and I remain a true capitalist in every sense of the word, but I do feel for those who struggling right now. I'm feeling the inflation, but not in the way of others.
 
The government isn't facing any conditions that would result in hyperinflation.
Click to expand...

Economics 101: The current oversupply of money in the U.S. economy and the continued endless printing of money by our Federal Reserve can certainly bring hyperinflation on. I hope it doesn't bring it on, but I can't say it won't bring it on. Ask Weimar Gemany what they did... Ask Argentina what they did... Endless printing of money and pumping it into circulation, deflating of the value of the currency, etc., etc. It's exactly what keeps going on here. And the eventual, inevitable conversion away from the U.S. petrol "dollar" which will push a rapid devaluation of the US dollar, unlike anything history has ever seen.

Yes Peter, this will at the very least, most likely lead to a recession in the short term scheme of things as you point out, as have some economists pointed out recently. All I have is hope upon hope that it doesn't lead to out of control hyperinflation.
 
My favorite coin:

h5JyDKT.jpg


It wouldn't buy a healthy meal in 1923 Germany.

John
 
First time I've seen that coin John, thanks for posting it!

I had no idea that they made a 50 million mark coin. I thought they were only printing paper money in that denomination back then, lol.

Best Wishes,

Alan
 
I've been doing a little research on trying to remember how much money the Federal Reserve pumped into the economy during the Carter administration. I heard the figure once, a few years ago, and I don't recall the exact percentage increase of the money supply that the Federal Reserve instituted back then. I'll have to search. I do know that it wasn't anywhere near our current time of a 41.2% increase in cash put into the economy since February of 2020. This current % increase number is totally unprecedented in US history, and that's what concerns me greatly.

When Jimmy Carter took office in January 1977, unemployment had reached 7.4 percent. Carter responded with an ambitious spending program and called for the Federal Reserve (the Fed) to expand the money supply. Within two years, inflation had climbed to 13.3 percent.

With inflation getting out of hand, the Federal Reserve Board announced in 1979 that it would fight inflation by restraining the growth of the money supply. Unemployment increased, and interest rates rose to their highest levels in the nation's history. By November 1982, unemployment hit 10.8 percent, the highest since 1940. One out of every five American workers went some time without a job.

(So by 1979 when they finally figured out they had pumped too much cash or money supply into the economy, it was already too late when they tried to restrain the growth of money supply, which is an interesting, "polite" way of saying what they were actually trying to do. In other words, they literally couldn't raise the interest rates fast enough in order to pull all the excess cash out of the economy in time to save the economy. See what happened above? This always happens with an economy when you pump too much money into it. It's Economics 101, not rocket science.) I remember interest rates at banks in the 18% to 20% range right after I got out of high school in 1981, and farmers lost their farms, and many businesses going under because they couldn't afford the financing in order to stay afloat.

And that's what might be coming here again. As Peter mentioned, a possible recession coming for us here in the States, which can mean a contraction of the economy and people loosing jobs, just like what happened by November of 1982. Don't worry, the Fed will print more money, and pay people not to work if they loose their job. Duh!

I think we'll all be shocked when I discover the greatly smaller % increase amount of money supply pumped into the economy by the Federal Reserve in the late 1970's, as compared to the whopping, unprecedented 41.2% increase here since February of 2020. I'm thinking I recall hearing it was a 12% or 14% figure they increased the money supply by in our economy, back in the late '70's. That was Child's Play, compared to what they've done recently since early 2020. I'll find out the figure....
 
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