why cant it be "inflation" not hyperinflation?
Inflation (without the hyper) is definitely occurring right now.
Hyperinflation was always a concern given the insane levels of monetary 'stimulus' (there's different means of achieving economic stimulus - Trump and Biden opted for the quick-and-easy short-term solution, namely, 'making money printer go brrrrrrr').
Economists were divided regarding the right approach (even within schools).
Unfortunately, the US (and other nations with well established welfare or social care plus concomitant high debt-to-GDP and short term incumbency political cycles) aren't in a position to have approached it the slow, painful, but safest way (ie. tax cuts, near-zero interest rates, semi-austerity coupled with a rapid vaccination rollout to the consenting). IMHO all responsible governments should have undertaken this alongside long term treasury bonds to slowly claw a nation's way out of the Pandemic Printing Pit, which is where the US is deep, right now.
Now that the Greenback is technically devalued by approx. 40% in just over a year, it remains to be seen whether other the observed imbalance with domestic productivity (and multiple steps along the supply chains leading up to users/consumers) will satisfactorily bear the brunt of it. This is what the Fed are publicly confident about.
What if we tried to combat inflation by deflating the economy? We could halt the money printers for months and burn the rest. We could drive the value of the dollar back down to what it was in 1912. It will be great.
Practically all other major economies (UK, Japan, even China) have devalued their own fiat currencies though a similar process as the US (China's in a somewhat worse situation IIRC as their Communist paper is directly pegged to the US$ - still!).
Theoretically, what you're proposing would effectively reverse the 40% mass-printing - Such drastic action in either direction would affect consumer costs, stress-test the supply chains in ways that would make the entire Fed need a 2009 era Chris-Chan dejected-lie-down moment. It would also rattle those investing directly into the Greenback via the US Dollar Index, and finally, dozens of countries peg their domestic fiat currencies to the Greenback.
In sum, many very costly consequences, both domestically and internationally.
Something I've noticed: A fair amount of jobs in the US are either redundant or mostly useless. Large swaths of the workforce could be put out of work without bringing the entire economy crashing down. The resulting social unrest might do it, but food is still pretty damn cheap and populations are far less likely to revolt when they're fed. There has been some fuckery going on with meat production and the likes but the US is still producing so much surplus grain that we put it in soda and feed it to livestock. Because the value of labor is so skewed in this way and food prices are so stable I think we're unlikely to see a Wiemar-style collapse. The situations with the housing market and instability of basic infrastructure are looking far more volatile and interesting.
On balance and on first read, I broadly agree with your overall thesis.
That all major world economies are in the same situation as the US, that the rate of inflation isn't linearly approaching the 1000%/year definition, and that the pandemic should largely settle following herd immunity by the end of 2021, reduces the odds of hyperinflation (per the definition) to something below 10% (ie. very unlikely), at least in the very near term.
The main concern I have is with respect to the very sanctity of the US for the reason you stated in the first sentence - Automation continues to erode away through traditional working-class jobs, no major political party has a coherent centralized policy to address the employment-efficiency mismatch (ie. what benefits a company doesn't benefit the truck driver), and businesses looking to recoup on lost earnings are only going to accelerate the long-imminent replacement of low-skill workers with 24/7, no-holiday-no-sick-leave-minimal monitoring ML-based/basic proprietary tech.
This is also happening in the backdrop of an eroding national consciousness (ie. social Balkanization).
In addition to the prospect of uprisings from working class Americans sensitive of their imminent replacement, we have to consider the gradual depreciation of America's infrastructure, which are clearly essential for supply chains on a macro level. Finally, continued opportunistic cyber espionage (from 'Russia'... derp) further weakens said supply chains.
Summarized, as a distant observer, my main concern is no longer the US' ability to swallow the inflationary effects of the cash injection, but the effect rising prices and the economic impact of the pandemic itself on the overall survival of an already fractured country.
www.wsj.com
