Hyper Inflation

[MSbklawyer]

The world is full of people who get their jollies by causing fear in other people by predicting the economic turmoil and / or collapse that is always "right around the corner". Some making a pretty good living writing articles re: same. ((Others like to cause the same effect by pointing how loooooong overdue we are for a massive meteorite the size of Texas to slam into the earth with the force of a gadzillion nuclear bombs and how anyone unfortunate enough to survive will bear witness to a world ruled by rats and roaches -- the Discovery Channel is the world's worst about this.))

Lately, though, the word seems to be "hyperinflation" and "great depression II" and it seems like more credible and intelligent people are forseeing the same thing. What's the consensus here on what's to come? Hard times? Recession? Depression? Revolution? And why?

[keepinitreal]

I expect deflation, with housing prices leading the way down.

[wnguyen]

With such situations like that but what I've seen so far in my area is that politicians are busy slamming each other over the economy with negative campaigns. Way to fix the situation!!!

[MSbklawyer]

I expect deflation, with housing prices leading the way down.

Hyper deflation or just plain deflation?

[ccsjoe]

I'm actually calling for stagflation. With the current employment outlook, number of jobs effectively lost, jobs being created, people into workforce, etc. On top of that, inflation will rear its ugly head based heavily on our nation's debt levels and weakness of the Dollar and bonds. Stangnant economic performance + inflation = stagflation. A very hard economic cycle to break out of. I agree housing prices will decline more, however, the remainder of the economy, in my opinion will not follow suit.

[Logan]

I think the ****** will get us before we see hyperinflation.

Be afraid, very afraid!

[ryan]

I'm actually calling for stagflation. With the current employment outlook, number of jobs effectively lost, jobs being created, people into workforce, etc.

I'm pretty much in this camp....Not violent swings one way or the other...just a continued download slide. Ask yourself, what event or program is going to change the course we are on now? I don;t see any.

[NoMoeMoney]

Most people will have a hard time wrapping their minds around the events that have a real possibility of happening. Just look to the past of the many great civilations that have fallen. Simply put, ours is next. I might be selfish but I'm glad that I'm old enough to honestly say that I have no regrets from my life, no unfinished goals. People don't stop to smell the flowers these days, too bad, they will wish they had when they miss them. Whats to come? Horror....

[MSbklawyer]

I'm pretty much in this camp....Not violent swings one way or the other...just a continued download slide. Ask yourself, what event or program is going to change the course we are on now? I don;t see any.

Me too. I don't think there's any doubt we're in for rough times. For quite some time to come. But you see, with increasing frequency, knowledgeable people talking and writing about economic catastrophe.

[banca rotta]

We have been in deflation for about 3 years now. Maybe more.

Hyperinflation probably isn't an appropriate word to describe it. It's really a currency crisis.

Deflation is pretty much what you see where asset prices are tanking and the money supply is shrinking or deflating

Inflation is the economy growing, the money supply inflating causing asset prices to rise and creates bubbles. It's usually from excess credit something we all know to well.

Hyperinflation is where people lose faith in the currency in our case the dollar. We Americans obviously still accept it. We all want more of it and rightfully so.

If the rest of the world doesn't want our currency as they have made it clear they don't, then how will we Americans buy imports such as oil especially since we don't produce anything anymore? We don't have a whole lot to trade. What if gas rose to $20 a gallon? How much will all other prices rise to if we see this?

My guess is we will see hyperinflation sooner or later due to our national debt and unfunded liabilities being so high.

Tim geithner the tax evading treasury secretary said the USA will not default on it's obligations. If he means what he said then only money printing will pay down the debt and will cause hyperinflation for certain.

You can be the judge.

[backtoschool]

We have been in deflation for about 3 years now. Maybe more.

Hyperinflation probably isn't an appropriate word to describe it. It's really a currency crisis.

Deflation is pretty much what you see where asset prices are tanking and the money supply is shrinking or deflating

Inflation is the economy growing, the money supply inflating causing asset prices to rise and creates bubbles. It's usually from excess credit something we all know to well.

Hyperinflation is where people lose faith in the currency in our case the dollar. We Americans obviously still accept it. We all want more of it and rightfully so.

If the rest of the world doesn't want our currency as they have made it clear they don't, then how will we Americans buy imports such as oil especially since we don't produce anything anymore? We don't have a whole lot to trade. What if gas rose to $20 a gallon? How much will all other prices rise to if we see this?

My guess is we will see hyperinflation sooner or later due to our national debt and unfunded liabilities being so high.

Tim geithner the tax evading treasury secretary said the USA will not default on it's obligations. If he means what he said then only money printing will pay down the debt and will cause hyperinflation for certain.

You can be the judge.

I agree for the most part with your assessment banca rotta.

Right now we are in a deflationary period that I don't see ending any time soon. The housing situation will keep banks from increasing lending, and unemployment and stagnant wages will keep consumers from spending.

Our national economy is large enough to keep the dollar from completely collapsing, but imports such as oil will create pockets of inflation even when we are in a deflationary period.

If we continue to print money to pay off our debts eventually this will lead to hyper inflation, but that is a ways off in my opinion. (10-20 years perhaps).

As for the rest of the world wanting our currency, it depends on what the alternatives are. We are still the largest consumer economy, and we drive the other economies of the world because of this. As other economies catch up in consumption, we will be less relevant, and if other countries recover before us, then we will see much less demand for our currency.

Also right now, we have the trust of the world that we will not default on any of our debt. There are very few countries that have that same trust. In order to keep that trust, we have to keep printing money to pay the debt, which will eventually lead to hyper inflation.

So to sum it up, we as a country are in a downward spiral, but it is a slow motion downward spiral.

[tobee43]

i think had this been any other country we would have had a revolution years ago...(i remember being in italy and not being able to go to rome due to the government being overthrown for the 13th time in as many years...didn't want to AGE myself, but i guess i have now...).

my insight and instincts tell me, that not only are we in an unprecedented economically depressed situation, with ramification far reaching beyond what history has every seen in this country, but, it will take more than anyone can imagine to reach the level of security the american family once felt about it's future.

our media is being controlled to not report how many people are living in tents, the statically reported numbers everyday of people in the country going hungry are left by the wayside so there is no panic. a depression is an understatement. we can ask ourselves...one simple question and i assure you, we all have the same answer. and, that is, do you know anyone that has been touched by this economic situation. ....now, the question is NOT...do you know someone who has HAS NOT, because there is always a fraction of the population that is immune to anything that goes on around them.

i for one do not know what the " more credible and intelligent people" are exploring as what our present and future will bring....but i for one am now taking it day by day....not year by year. sad as it is i can no longer trust.

GREAT THREAD!!!!

[banca rotta]

If we continue to print money to pay off our debts eventually this will lead to hyper inflation, but that is a ways off in my opinion. (10-20 years perhaps).

As for the rest of the world wanting our currency, it depends on what the alternatives are. We are still the largest consumer economy, and we drive the other economies of the world because of this. As other economies catch up in consumption, we will be less relevant, and if other countries recover before us, then we will see much less demand for our currency.
.

My opinion it's about 2 to 3 years before it hits only because of all the baby boomers facing retirement and the growing entitlements with no end in sight being supported by both the d's and the r's.

If the unemployment rate (which btw is around 20% if you use the real numbers) doesn't create about 125k good jobs per month just to keep up with the new graduates, plus put all or most of the 15 million workers who lost jobs back to work, I cannot see how we will be able to consume so much from the rest of the world.

See my thinking is I feel that the math doesn't add up! It's not me wishing for anything bad so I can say "see I told you".

It's just simple math. The USA just does not have enough full time workers even in a strong economy to pay it's debts and obligations. The govt is taking in around 2 trillion in taxes and spends around 3.3 trillion plus or minus a few billion.

Some tough choices must be made and no one wants to make them.

[backtoschool]

My opinion it's about 2 to 3 years before it hits only because of all the baby boomers facing retirement and the growing entitlements with no end in sight being supported by both the d's and the r's.

If the unemployment rate (which btw is around 20% if you use the real numbers) doesn't create about 125k good jobs per month just to keep up with the new graduates, plus put all or most of the 15 million workers who lost jobs back to work, I cannot see how we will be able to consume so much from the rest of the world.

See my thinking is I feel that the math doesn't add up! It's not me wishing for anything bad so I can say "see I told you".

It's just simple math. The USA just does not have enough full time workers even in a strong economy to pay it's debts and obligations. The govt is taking in around 2 trillion in taxes and spends around 3.3 trillion plus or minus a few billion.

Some tough choices must be made and no one wants to make them.

I totally agree. As a country, our standard of living is slipping, (for the middle class) with no way of bolstering it back up.

We cannot support the Social Security system as is without raising taxes or cutting benefits or both. No one wants to do this. In order to keep Social Security benefits as is, we will have to print money and pay retirees with that paper money that will gradually lose it's value, as hyper inflation kicks in. The first thing to go with Social Security will be the cost of living increases that keep up with inflation. Once those are completely gone, then printing money will be a cheap way of cutting the actual value of the entitlements that are being paid out.

[MSbklawyer]

I totally agree. As a country, our standard of living is slipping, (for the middle class) with no way of bolstering it back up.

We cannot support the Social Security system as is without raising taxes or cutting benefits or both. No one wants to do this. In order to keep Social Security benefits as is, we will have to print money and pay retirees with that paper money that will gradually lose it's value, as hyper inflation kicks in. The first thing to go with Social Security will be the cost of living increases that keep up with inflation. Once those are completely gone, then printing money will be a cheap way of cutting the actual value of the entitlements that are being paid out.

Yeah, social security has gotten totally out of hand. It's not uncommon at all for people to live into their 90s. The system just wasn't set up for people to be on it as long as they are.

The geezers are not going to like it, but I have a solution: I was in Biloxi last week and stopped in at one of the casinos to have lunch. Of course, the places are designed so that the restaurants are placed at the far end of the gambling floor. It was the middle of the week at noon and the place was packed. Row after row after row after row of blue haired old people playing slot machines. I am closer to 50 than I am to 40, and I was the youngest person in there. By far. The scene is the same at every casino on the coast and I'm sure in the country.

Then there are single mothers -- there are some fathers too, but it's mostly single mothers -- who can't work because any job they are qualified for doesn't pay enough to justify the cost of the daycare that would be needed. See where I'm going with this?

All but the most completely disabled geezer could care for a kid while mama goes to work. And I think we should require them to do so rather than staring at a slot machine like a zombie all day stuffing their social security checks into slot machines. If they didn't want to do it, they could take a 15% cut or so in their social security. They may not like it at first, but I think eventually they'd start to feel better about themselves for actually being productive again.

Instead of having one government entitlement so that old people can sit in casinos and gamble; and another government entitlement so single mothers can stay home with their kids, lets match these people up and make them both productive again.