Hyperinflation

[MarvinTheParanoidAndroid]

I think it's worth discussing the hyperinflation of the U.S. dollar. But first, some background.

Historically, hyperinflation was an instant death knell to a country. After losing WWI, Germany owed a fuckload of war guilt debt to the tune of 132 billion Marks to the countries they lost to because fuck you, Treaty of Versailles. Unable to pay it off the normal way because the Treaty of Versailles put the screws to the Weimar Republic by barring them from paying off their war guilt with Marks, Germany started printing the Mark to purchase accepted foreign currency and use that to pay off the debts at shitty exchange rates. This overprinting resulted in single loafs of bread being worth a literal wheelbarrow of marks. The hyperinflation was so out of control that prices would double every two days.

By the end, 4,200,000,000,000 Marks was worth one dollar. The German Mark is by far the most infamous example of hyperinflation, but is far from the worst. The Weimar Republic is the perfect example of why you don't just print more money to fill a deficit.

The United States has printed 40% of all U.S. dollars in the last year due to Covid-19 to cover what people weren't earning anymore without spending less anywhere else or tightening their yearly budget. In an ideal situation, inflation is meant to be concurrent with production and employment, the problem occurs when inflation exceeds employment or production, which will cause the cost of goods to increase above the value of money earned. Lots of jobs were lost during the Covid lockdowns and 40,000 more were lost due to Biden cancelling the Keystone pipeline.

It's not just the U.S. that's overprinting money either, every country on Earth is doing it.

However, the United States dollar enjoys an enormous home field advantage, mainly that it's the global currency and there are no viable alternatives. Even China, which deludes itself into thinking it could overtake the United States in just two decades despite all of their own internal problems, has tied the value of the Yuan to the U.S. dollar, owning one trillion in U.S. treasuries. Another reason we haven't seen much of hyperinflation recently is because of a lack of currency velocity because demand for goods has lowered since the lockdowns. People are also panicking purchasing into stocks and other appreciable commodities like land or precious metals. Then of course there's been the enormous investments made in Cryptocurrencies.

Can the effects of overprinting be mitigated or avoided before they bite us all in the ass or are we all just screwed?

Also if you'd like a crash course on general economics, listen to this nine hour audio book by based black man, Thomas Sowell.

 

[Kosher Dill]

I think one thing different from the 1920s is that all governments are far, far bigger and more powerful. We now have a global financial system controlled by relatively few entities, all of which roughly agree that they want the status quo to continue. And much (if not most) money now exists in electronic form, making it even easier to regulate.
It's likely that if push comes to shove, they will simply make hyperinflation stop, which would have been sheer fantasy 100 years ago.

That's what "Economics 101" analysis doesn't consider - the presence of a dictator.

 

[Samson Pumpkin Jr.]

That's what "Economics 101" analysis doesn't consider - the presence of a dictator.

Venezuela was led by a strong central government who wanted to see the status quo continue. Where are they now?

 

[Kendall Motor Oil]

Venezuela was led by a strong central government who wanted to see the status quo continue. Where are they now?

Venezuela doesn't have the support of the majority of global finance and relied on a natural resource for its financial stability. People can trade bitcoin and USD there. With the West, it would be more difficult to have parallel economies with the surveillance apparatus. There is also the IMF. Not saying it's impossible but a lot more difficult.

 

[Big Ruski]

Venezuela was led by a strong central government who wanted to see the status quo continue. Where are they now?

In a land with cheap gas prices and not much else.

 

[Jarolleon]

I think one thing different from the 1920s is that all governments are far, far bigger and more powerful. We now have a global financial system controlled by relatively few entities, all of which roughly agree that they want the status quo to continue. And much (if not most) money now exists in electronic form, making it even easier to regulate.
It's likely that if push comes to shove, they will simply make hyperinflation stop, which would have been sheer fantasy 100 years ago.

That's what "Economics 101" analysis doesn't consider - the presence of a dictator.

So economic problems are impossible if the State is powerful and far-reaching enough (and doesn't intentionally cause them to Holodomor people it doesn't like)? Though it likely helps that they already crashed our standard of living with the lockdowns (flat out removing several sectors from the economy), so if the "essential" sectors keep chugging along there will be no big difference in the standard of living beyond the hit it has already taken.

 

[Cool Dog]

Hyperinflation happens when a loser country (postwar germany) or a collapsing one (argentina) start printing like crazy with literally nothing backing it since they lack hard reserves be it in gold or foreign currency and their economies are going to shit so odds are they will default on all the debts they have

But more importantly it happens when they are the only ones doing like shit and printing like crazy. Right now the entire first world is printing and their economies while not doing great are far from the clusterfuck of postwar germany or argentina ever since 1946. There are expectations of a bounceback and growth, so far nobody is talking about not paying their debts and there are no signs that they would be unable to do so either

Buying stuff, metals and real estate will only fuel the economy even further, if everybody is printing then you dont have the situation where people are moving their savings to foreign hard currency since all countries that matter are doing the same anyway. Thats a huge issue because when that happens it means not even the population of the country trusts their own currency which makes it worth less than nothing. Also most of the economy moves into the grey area, tax revenue dries up, businesses go bankrupt, etc

None of that is happening right now except for shit-tier countries like mine that are doing all the fuckups I detailed above so no, the dollar and the euro are not going hyper. Cant say the same about the canuck dollar since that spike in printing its just insane. As for the yuan the chinkchong commies are constantly fucking over their people by devaluing the yuan so they remain the same indentured slaves making cheap phones instead of becoming a middle class that could topple the commies out

 

[Thiletonomics]

In regards to Zimbabwe's extreme hyperinflation that it suffered, how close is Venezuela to topping that? The Bolivar already had zeroes removed from it twice, will we see it done for a third time?

 

[yeahlord]

SP500 hitting ATH every day, how do you call that?
I believe we are already in inflation, 4-8% is not that bad.

Credit Suisse Raised Its S&P 500 Target. Earnings Are Too Good to Ignore.

If corporate earnings this year look anything like the those of the first quarter, the stock market could jump significantly from here, according to Credit Suisse.

www.barrons.com

 

[L50LasPak]

I have been unable to shake myself of the fear that because fiat currency is just an idea, and not actually based on anything tangible, that the financial powers controlling the economy can just make up whatever rules they want to keep themselves solvent. That perhaps they really are too big to fail, and their actions really will not have consequences.

Go ahead and do your best to tell me why I'm wrong to think that way. I hope somebody comes up with a convincing arguement, because I would like to believe that there is justice in this world and the flagrant misuse and abuse of a system like this will lead to consequences. I fear these people may truly be invincible though.

 

[mindlessobserver]

I have been unable to shake myself of the fear that because fiat currency is just an idea, and not actually based on anything tangible, that the financial powers controlling the economy can just make up whatever rules they want to keep themselves solvent. That perhaps they really are too big to fail, and their actions really will not have consequences.

Go ahead and do your best to tell me why I'm wrong to think that way. I hope somebody comes up with a convincing arguement, because I would like to believe that there is justice in this world and the flagrant misuse and abuse of a system like this will lead to consequences. I fear these people may truly be invincible though.

Something given has no value.

 

[Radola Gajda]

Post war inflation in Germany was deliberatly made much worse by Hjalmar Schacht (same Guy who was behind Nazi economic ""Miracle"") in effort to get Entente back to negotiation table to get better deal on how much war reparations Germany needed to pay. This doesnt work because French needed that money to repay war loans to USA and restore devastated Northern France.

 

[wtfNeedSignUp]

How I see the global economy is Wile e Coyote running from a cliff, only staying afloat because he doesn't look down. If he managed to get onto another cliff before he looks down, he'll be in the clear.
Basically, as long as the public don't get how fucked they are until things stabilize (or more likely that they'll be educated about how the new normal is good) everything will be less terrible. If they do, and realize their life saving are now cut by half because the government cares more about corporations and banks than the population, then you might actually see mass violence in the street.

 

[General Tug Boat]

From the current direction of things I see that a lot of our issues are predicated on the fact that interest rates from the IMF where never raised during the housing crisis in 2008. Hence, why we had the black December, before the "COVIDAN DYSTOPIA" truly kicked off. The USD having diminishing returns isn't going to be fully realised until the ladder half of the decade in my observation.

Seeing the trends of the acquisition of so many junk bonds just tells me everything I need to know about the future. We are going to be in for a real problem if Yelling and the other IMF cocks don't start getting real about resolving the massive bubbles that have formed throughout the West. America will survive, but it will make 2008 pale in comparison, especially on with the amount of false optimism and just in general bad advice people have been lead to believe in the course of their spending habits.

The biggest indicator of inflation are the commodity markets and there have been nothing but consistent bull runs since the COVID deflation last March. Anyone that was stock piling on PM, other commodities, foreign stocks, and even crypto over the last year, have indeed shielded themselves once the hyperinflation sets in. Anyone who has made extraordinary purchases that they can't afford, locked themselves into massive debts that the actual value will never match.

Me and my buddy where talking about the fucked up state or the housing market in Canada right now, and if anything US takes a dive, we are going to get shafted twice as bad, because we never ended up getting the bubble resolved on our end either. I dont think it's going to be a Weimar Republic scenerio unless we end up getting entangled in some massive war over the next decade with another super power.

That is if we lose, which since the military industrial complex is the lifeblood of the American economy, it would probably be the only thing to resolve the deflation problem in an historically accurate sense. Either way the monopoly funny money printing has already affected the markets in general. Seeing the vast majority of people are still locked into the great mask debate or how Floyd didn't do nuffin.

This crisis is going to take a lot of the mouth breathers by surprise, it'll be like when the pandemic was cooking up in the bat soup hotels in Wuhan. "How could we of been able to tell; No one could of predicated this!" The data is there and anyone savvy in the slightest can determine that we are in the beginning of a really bad recession. It won't be Great Depression, but probably more along the lines of a 08 and 70 hybrid. A massive crisis in the energy sector alongside with massive crisis in real estate. Though it's anyone's guess at this point.

 

[gangweedfan]

I think it's worth discussing the hyperinflation of the U.S. dollar. But first, some background.

Historically, hyperinflation was an instant death knell to a country. After losing WWI, Germany owed a fuckload of war guilt debt to the tune of 132 billion Marks to the countries they lost to because fuck you, Treaty of Versailles. Unable to pay it off the normal way because the Treaty of Versailles put the screws to the Weimar Republic by barring them from paying off their war guilt with Marks, Germany started printing the Mark to purchase accepted foreign currency and use that to pay off the debts at shitty exchange rates. This overprinting resulted in single loafs of bread being worth a literal wheelbarrow of marks. The hyperinflation was so out of control that prices would double every two days.
View attachment 2134233
By the end, 4,200,000,000,000 Marks was worth one dollar. The German Mark is by far the most infamous example of hyperinflation, but is far from the worst. The Weimar Republic is the perfect example of why you don't just print more money to fill a deficit.

The United States has printed 40% of all U.S. dollars in the last year due to Covid-19 to cover what people weren't earning anymore without spending less anywhere else or tightening their yearly budget. In an ideal situation, inflation is meant to be concurrent with production and employment, the problem occurs when inflation exceeds employment or production, which will cause the cost of goods to increase above the value of money earned. Lots of jobs were lost during the Covid lockdowns and 40,000 more were lost due to Biden cancelling the Keystone pipeline.
View attachment 2134277

It's not just the U.S. that's overprinting money either, every country on Earth is doing it.

View attachment 2134289
View attachment 2134290
View attachment 2134293
View attachment 2134325

However, the United States dollar enjoys an enormous home field advantage, mainly that it's the global currency and there are no viable alternatives. Even China, which deludes itself into thinking it could overtake the United States in just two decades despite all of their own internal problems, has tied the value of the Yuan to the U.S. dollar, owning one trillion in U.S. treasuries. Another reason we haven't seen much of hyperinflation recently is because of a lack of currency velocity because demand for goods has lowered since the lockdowns. People are also panicking purchasing into stocks and other appreciable commodities like land or precious metals. Then of course there's been the enormous investments made in Cryptocurrencies.

Can the effects of overprinting be mitigated or avoided before they bite us all in the ass or are we all just screwed?

Also if you'd like a crash course on general economics, listen to this nine hour audio book by based black man, Thomas Sowell.

Even the keynesians are saying that inflation is inevitable. Of course they have fooled themselves (or more likely are trying to fool consumers) into thinking that the regulations will solve everything

https://www.nbcnews.com/business/consumer/get-ready-higher-grocery-bills-rest-year-n1263897

https://www.nytimes.com/2021/03/22/opinion/us-inflation-stimulus.html

also pic related is the true patrician economic textbook

 

[mindlessobserver]

The banks and regulators are using "modern money theory" that functions under the tulip bulb principle. The price of things does not have to reflect its intrinsic value. The only thing that matters is what people THINK it's worth. So long as everyone from policymakers to consumers are engaging into the self delusion that two units of worthless money is actually worth a cheeseburger at McDonalds, they can keep the train on the tracks.

But all evidence is pointing to the contrary. Commodities prices are skyrocketing, while at the same time actual production is in a contraction state thanks to the double whammy of COVID lockdowns and the Government paying people to NOT work. The price of a Gallon of Gasolene is going to hit the 3 dollar average soon. Home construction is going to become impossible as lumber stocks become more pricey or unavailable. Food, essentials even utilities are going to become more costly while wages will stagnate because McDonalds has to spend more money to source ingredients for the burger instead of paying its workers more.

The longer that state of Affairs goes on the greater the risk of the train derailing. Which means the only solution is printing MORE money. The government can't raise taxes in this scenario without triggering a panic. People will already be unable to make ends meet, let alone pay the Government. Printing more money will keep the train on the tracks...but also make it go faster. Commodities prices will increase unmoored to market conditions. With no downward pressure the bubble will continue to grow making the inevitable future explosion worse and worse.

 

[John Furrman]

I've been losing sleep over the USD runaway inflation inevitability. Every other week when I go to buy groceries they're getting noticeably more expensive. The price of beef has exploded, while pork and chicken prices are rising less than beef prices, but still rising. I have busted my ass for the last 5 years to get through college, start my career, amass substantial savings, and now this? God damn it all.

Beyond myself, I've been telling my parents to hedge their saving, moving it into any store of value that isn't USD but they think I'm worrying too much and are deluding themselves into thinking they'll be able to retire at all with their USD savings. I could be overreacting, yet, the thing about paranoia is you only have to be correct once for your preparations to come to fruition.

 

[Make Anime Illegal]

It's likely that if push comes to shove, they will simply make hyperinflation stop, which would have been sheer fantasy 100 years ago.

That more or less amounts to, for example, making the grocery store not raise their prices for food. That's called a price ceiling and it leads to shortages. Nobody can dictate food be on the shelves of your local store.

 

[NoFeline]

This thread isn't about planet-sized furries?

 

[Livecorpse]

Fuck it. Fuck it all.

I have no future. Nobody my age has a future.

I'll jump into my grave, laughing all the way down.
I'll laugh when industry goes overseas and jobs dry up.
I'll laugh when 'universal basic income' and 'livable minimum wage' destroy what little is left.
I'll laugh when the stores are empty because there's nobody to ship food, and nobody to stock it.
I'll laugh when the riots start, and the skies are black with smoke, the streets red with blood.
And when the people that voted for this lie on the ground, both hands holding in their guts, praying to a God they don't believe in, begging for the mercy and forgiveness they denied us, I'll laugh the hardest.

this has been in my head for over a week now please help