No, we are not headed to hyperinflation. Hyperinflation is hyperventilation. I don't understand why people look to CEOs for wisdom on things outside of their expertise. In fact, those who perform at a very high level tend to be poor sources of knowledge about things outside of their expertise because most of their attention is focused elsewhere.
But in the 70s we had out of control inflation which required 18% interest rates and a very steep recession -- something that broke the backs of unions and severely hurt a lot of poeple.
So yeah, inflation is something that we should be worried about without treating it as an existential crisis leading to the collapse of the currency. I really wish people would tone down with turning everything into a crisis in order to terrify the population into accepting their preferred policy mix. This politics of terror is corrosive to the national discourse and results in bad policies.
Politics aside, the admin just tried to pass of their desired 3.5T would cost nothing, there are somehow “serious” discussions about just fixing things my making trillion dollar coins, we’re not even 1/2 way into figuring out what shutting the world down for a year does, there are aspects of the markets that sure seem irrational, I have yet to see one complete explanation for the things we can all see like labor shortage, nothing makes sense and prospects look bleak yet housing is higher than 2007/2008…
So yes, Dorsey might have some ulterior motivation and might be pumping some market.
But how the hell would anyone know!? The people in charge love nothing more than printing more money then pretending the old economic rules don’t apply.
Inflation is coming, no doubt. The question is the degree.
Here's my amateur understanding of how this works.
Inflation is different from hyperinflation. Inflation comes from a variety of causes and reasons. But hyperinflation only comes one way - government.
Forget money for a moment. Think in terms of the stuff that the economy produces. When the government wants too much of the stuff, they have a choice. They either raise taxes, or they print money. (Or, I suppose, they just take it at gunpoint and don't even pretend to pay for it. But at that point you have a dictatorship and not an economy.)
Raising taxes makes it clear to people that the government is taking from the people - the government is going to have more, and the people are going to have less. That's unpopular - so unpopular that it sometimes leads to the current government losing power. So governments that don't want to face the unhappy population sometimes choose the other alternative, printing money.
The problem is that printing money doesn't produce any more stuff. You have the same stuff with more money chasing it. That gives you inflation. And that's OK, so far. But the government usually wants to keep using more of the stuff. So next year, the cost of everything went up because of more money chasing less stuff, and all the employees demand raises because everything costs more, and everybody's unhappy because their income isn't enough to buy what they expected to be able to buy. So the government needs to buy even more stuff to be able to give away to make everyone happy. So the government prints more money so that it can buy more stuff. This feedback loop is what gets you to hyperinflation.
Two additional comments. First, the separation of the Federal Reserve from Congress, the separation of the money-creation authority from the spending authority, is a really big deal. It's enormously important. Any attempt to break that down should be viewed with immense suspicion.
Second, Modern Monetary Theory says that the government should print money to spend, and should use taxes as needed to remove money from the economy to prevent inflation. I also view this with profound suspicion, because it moves the inflation-control decisions from the Fed to Congress (or else it moves the taxing decisions to the Fed, but so far as I know nobody is suggesting that). Congress is going to make political decisions rather than technical ones; this is likely to end very badly.
There's no proof. The proof would be if it actually happened, at which point it'd be too late to do anything, you'd just be fucked. That's the point of models: being able to make an (imperfect) prediction of the future, based on available data. It might not be right, but having a halfway-workable model is better than just going through life taking whatever comes.
There's a lot that's suggestive of hyperinflation within the next ~5 years. Unabashed money-printing by worldwide central banks. Zero or negative interest rates. Massive supply-chain disruptions. Rising prices. A global economy that was shut down for extended periods of time.
Yes, that would collapse the entire global economy in a few months.
my initial read on this wasnt in terms of typical countries-printing-money hyperinflation, but more about a growing cost of goods & materials.
i do tend to believe there is a "great adjustment" underway that undoes much of access to cheap resources, & less so cheap labor. rather than being a question of central banking & economic policy, this is to me more a question of sustainability of the ultra competitive vast resource extraction pipeline society has built itself out of.
we're also finding that the operational costs of society & the infrastrucutre we live upon are rather high. im not sure how or this factors in to a decrease in consumer access but itcs part of the readjustment.
i was disppointed to find such resounding & often crass & hostile rejection of the premise (& jack as a person), such perposterous questions repeated like "where is the proof?" as though this is something the school of economics has ever been able to say for certain on. it took me a couple passes through to even understand that i see the proposition differently, that i have my own preconceptions that i fit the term hyperinflation onto. i dont know what jack meant. but i don think some forms of hyperinflation are quite likely in the cards, alas. we havent market resillience or sustainability to keep an endless series of mini crisis from dogging the business-as-usual daydream that made up the past couple decades, and the result is a change in the value of money.
Jack Dorsey is a literal cringe machine. I’m surprised all that meditation and fasting hasn’t helped him self realize this. Where is the proof for hyper inflation? What a weirdo
How do you prepare for hyper inflation? Nevermind, I just realized how many Bitcoin speculation posts that question would return. I was looking for something more tangible.
Bring forward asset and commodities purchases. Stocks and land. Large supplies of life necessities like paper, laptops, non-perishable food, transportation, energy-producing solar, etc.
Thanks for the advice, going hard into toilet paper ;)
Stocks make sense I suppose, but markets just seem risky. SPY and indexes seems like the move if you don’t want to spend a ton of time researching.
I’d go for guns before laptops but even then, a Barrett REC-10 is in high demand and might be good to own a couple just to tie cash up, but worth a lot less when the REC-11 comes out, this is worse for tech items. Food storage seems inefficient.
Not yet, but if the leftists pass $6 trillion in spending while trying to soak the rich (who'll just leave), then yes, the US will be in a full blown debt crisis.
From what I can tell is this just Jack shilling for BTC?