hyper inflation in the USA?

Re: hyper inflation in the USA?

I suspect many do. However locally individuals are more aware of the historically high near 9% unemployment that remains persistent beyond past economic cycles, and rising energy prices.

The dramatic expansion of the monetary supply is presumably to help reduce unemployment, but the uncertainty this creates in the mind of business somewhat mitigates any employment benefit.

I have followed this (currency value) for a long time. Back in 09 I invested in a Canadian and an Australian ETF as a dual play on relative currency and their commodity rich economies that should prosper as the developing world develops an appetite for same. Both are up 35+%.

Many economists are nervous about Bernanke's quantitative easing, and the potential for inflation. However there are still deflationary forces at play, globally and locally. The housing bubble created a huge amount of faux personal wealth that still hasn't worked out of the system. I estimate that housing may have another 10+% to fall. This is not an insignificant amount. There are other adjustments expected from china wrt their currency peg, and international economic evolution.

Most of the pricing distortions I have experienced locally are (IMO) more from bad government policy than simple inflation. For example I bought a can of corn from the food store last night for $0.65, only a couple years ago, that same can of corn was $0.33 . That price double is clearly caused by the artificial demand of using corn (food) to make ethanol. We could buy sugar based ethanol from Brazil, for cheaper than we can make it, but this is politics not good economic policy. This distorted price on corn impacts other food prices as corn gets displaced.

The energy policy is so screwed up, that we refuse to harvest oil here (we have a lot, plus gas and coal), while the problems associated with buying from nations who are not in our self interest "should be" apparent. To add insult to that injury, our energy policy diverts capital from ventures that would reduce our energy costs, to gee whiz projects like windmills and electric cars, that have been around for hundreds of years and not developed with private capital, because they don't make economic sense (beyond golf carts, etc). If they did private industry would have already developed them. This diversion of private capital (our tax dollars) toward uneconomic ventures, does not help jobs like they claim, but actually diverts resources away from real productive ventures that could both create jobs and more wealth (not destroy wealth, and pick short term winners that are unsustainable without more subsidies).

Bernanke is a student of the depression of the 1930s, and hyperinflation (like your Weimar Republic in the 1920s). He is walking the tightrope to prevent a deflationary cycle like japan experienced in the 1990s. That took them many years and some argue they never really recovered from it. That said there are concerns, that Bernanke is a little too beholding to his political handlers (there is an election next year, so unemployment better be much improved or else). There have been several attempts by congress to gain more control over Bernanke, and this won't diminish away (for better and/or worse). I for one, do not like his dual mandate of managing both inflation and employment, as I don't see how they can both be optimized at the same time. Or that monetary policy can even fix a structural employment problem like we are seeing.

FWIW from an "outside" perspective, the balance of trade that Germany enjoys looks out of whack too. Both germany and china enjoy net positive balances of trade. Such imbalances, like our negative balance, are unsustainable and eventually the currency will adjust to make imports more expensive and exports more attractive. This is not a new concept, Adam Smith discusses in the Wealth of nations, written hundreds of years ago. Germany is an interesting example, as they share a common currency with the EU, so the relative weakness of those other linked economies will somewhat compensate for Germany's trade imbalance, but there are huge shifts going on inside the EU. I suspect this is an uncomfortable reality between those nations, and one reason germany is so quick to give financial aid to their economic partners. Either they will make the association more complete to formally capture the weak states, or drop them out.

I hope my comments don't sound political, I am just calling it like I see it, and there is a strong policy involvement.

JR

PS: for more data points on relative currencies, I recall from buying stuff from Japan decades ago, a Yen dollar exchange rate up around 230Y or so to $1. Today it is around 82Y=$1. I also recall german DM being around 3.6 per $1 when I was there in 1970, but I since lost track of exchange rate since the euro conversion. The dollar has surely lost a lot of relative value also reflected in oil prices, but oil prices are more complex than simple exchange rates.
 
Re: hyper inflation in the USA?

Christian,

I am much more concerned about cost push inflation, because the government is fighting tooth and nail to keep us from seeing any "standard" inflation. This guy will make you think the world is coming to an end if you read him enough, but his data is good: http://market-ticker.org/akcs-www?post=169003

Some more on macro issues:
http://market-ticker.org/akcs-www?post=180117
http://market-ticker.org/akcs-www?post=177209
http://market-ticker.org/akcs-www?singlepost=2385406
http://market-ticker.org/akcs-www?post=170882
 
Re: hyper inflation in the USA?

Another problem with Bernanke and other central bankers, is they are like the worker with only a hammer in their tool kit. That hammer may not be the right tool for the job, while Bernanke seem to have created multiple new kinds of hammers, to grow the money supply after hitting 0% interest rates some time ago.

You know what they say about simple answers... I hope Bernanke and friends are as smart as they think they are.

A little inflation is less bad than a little deflation. because it is easier to reverse...Deflation has its own positive feedback and feeds on itself, getting worse quickly once the seeds of deflation take hold. That said they do seem to be gaming the full measure of inflation and perhaps understating it.

I suspect they are motivated by fear of deflation first, and preserving political capital (survival) second, but only time will tell. I personally wish they would stop pushing on the monetary string.

JR
 
Re: hyper inflation in the USA?

You also have to consider how China affects the value of the dollar in the world market. In order for the Chinese economy to keep growing, they have to have a steady stream of exports so that they can provide jobs to workers. If their exports fall off, there would be less economic growth. That would cause there to be fewer new jobs created. This would lead to more unhappy Chinese people who see the government as repressive, which could cause the current little protests that china sees occasionally would turn into big protest and upheaval of power. Similar to whats happening in the middle east right now. So the Chinese government keeps buying all the US debt it can so that the balance of trade stays where it is. This means that while the total number of dollars is going up, the actual amount in circulation is going up at a much slower rate. The question then becomes, what happens if there is an upheaval in China, or what happens when the Chinese government is no longer able to keep up the debt purchasing.
 
Re: hyper inflation in the USA?

One reason Germany is giving financial aid to stumbling EU countries is that the money goes straight back to german banks. Direct aid to german banks would be impossible due to EU regulations.

The QE outbreak looks like the beginning of the end of a monetary system cycle. I may be wrong but this is going to happen somewhen anyway.
 
Re: hyper inflation in the USA?

Christian Tepfer said:
That looks messed up, really, from an outside standpoint.

http://research.stlouisfed.org/fred2/series/BASE?cid=124

Does anybody in- or outside the USA feel the impact of that huge de-valuation of the dollar already?
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I think where we feel it the most is in the price of gasoline.Since the dollar is worth less,we need more dollars to buy oil.And of course,with gas and oil more expensive,that raises the price of many other things that use oil in their production and gas to transport.
 
Re: hyper inflation in the USA?

I dont want to make this more political than already is but... There is a universal power (call it god if you like) that always keep the things in balance.
That leads to the saying one that does not do harm, is more likely not to be harmed.
What i will now say does not apply to the common US people but to the government and how they interfere in making lot of unjust things to many countries and nations all over the world in the name of democracy.
One day the bill will be collected. One way or the other.
I will only mention my former Country Yugoslavia, when US government managed to fuck it up at the point when we were doing just great.
Now we have 35% of unemployment. Try to imagine 35% of unemployment in the USA.
 
Re: hyper inflation in the USA?

Marjan Milosevic said:
I dont want to make this more political than already is but... There is a universal power (call it god if you like) that always keep the things in balance.
That leads to the saying one that does not do harm, is more likely not to be harmed.
What i will now say does not apply to the common US people but to the government and how they interfere in making lot of unjust things to many countries and nations all over the world in the name of democracy.
One day the bill will be collected. One way or the other.
I will only mention my former Country Yugoslavia, when US government managed to fuck it up at the point when we were doing just great.
Now we have 35% of unemployment. Try to imagine 35% of unemployment in the USA.
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Please explain how the USA "fucked it up"?
 
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Re: hyper inflation in the USA?

Marjan Milosevic said:
I dont want to make this more political than already is but... There is a universal power (call it god if you like) that always keep the things in balance.
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re: the topic of this thread, that might be the invisible hand of free markets. veering into the topic of moral behavior, that balancing force would be Karma.
That leads to the saying one that does not do harm, is more likely not to be harmed.
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I believe the opposite statement may have more logical force. One who does harm, is more likely to become a target of the community to stop that "harmful" behavior, but this can be conflicted by lack of agreement about what is harmful behavior and true cause and effect relationship between actions and harm. The "meek shall inherit the earth" does not seem proved by human history, and appeasement has likewise provided only temporary relief when faced with evil force.
What i will now say does not apply to the common US people but to the government and how they interfere in making lot of unjust things to many countries and nations all over the world in the name of democracy.
One day the bill will be collected. One way or the other.
I will only mention my former Country Yugoslavia, when US government managed to fuck it up at the point when we were doing just great.
Now we have 35% of unemployment. Try to imagine 35% of unemployment in the USA.
Click to expand...

I will not claim that the US has never mishandled anything, and we are collectively responsible for the actions, or inactions of any government we voted in, (or didn't vote out). That said we more often resemble a bull in the china shop than caring partner. Yugoslavia is noteworthy in world history going all the way back to WWi but I suspect you are talking about after the cold war, when the fall of the common soviet enemy, that kept ethnic factions unified in purpose against the soviets diminished and they were free to focus on differences between themselves.

There are more examples in the world of different ethnic groups living together peacefully under dictatorships (like Tito, or Saddam), than in democracies. India is one of the rare good examples, but if you follow the news more closely than headlines, there is a constant tension of low level violence even in India.

I think Iraq is going to be a telling experiment to prove if three ethnic groups (sunni, shia, and kurds) can learn to work together peacefully without an iron hand dictator to give them something worse to worry about than each other. China has ethnic tensions internally and deals with it the iron fist way also. Neither the tensions in China or India, get much reporting in the western press.

I fear there are no simple answers and it sure is convenient to blame the US, so have at it. If it wasn't us (through the UN) trying to prevent genocide and such, it would probably be some other world power, for better or worse. The world is a messy place and I don't claim to have all the answers. I do know enough to grasp that most simple answers are too simple to work. .

JR

PS: I apologize if it sounds like I am lecturing you about your own history, I am not. Just trying to better understand from a distance.
 
Re: hyper inflation in the USA?

What i will now say does not apply to the common US people but to the government and how they interfere in making lot of unjust things to many countries and nations all over the world in the name of democracy.
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Why would we do that? We are a Republic.

Read our Pledge of Allegiance.It specifically states:"to the Republic for which it stands"

Our system by which we elect our Representatives is Democratic as it should be.Our system of Government is Republic! I would certainly not ever want to be part of a true Democracy!

John I don't think he was referring to the UN as much as a US led NATO that bombed the hell out or Serbia.If I remember the UN didn't have much at all to do with it until the end.

It's only natural for someone who's country was decimated because their leaders were practicing Genocide (one still at large) to remain bitter in defeat.The problem was very big before the US and NATO got involved.Some probably wont admit that depending on how their internal struggles affected them directly.

I suppose if you were a part of the regime in power and were working, had property etc. things were fine for you.What about the 8000 Muslim young men and even children murdered by Mladic? I suppose that didn't happen either. Oh that's right the world believes he should be the next Saint and not put to death! Well at least the world according to the "old" Serbiain rule! You know the one where unemployment was non existent!

 
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Re: hyper inflation in the USA?

I prefer to keep this as abstract and impersonal as possible, to keep the discussion civil and thoughtful.

There is still a fair debate about interference or involvement, in external matters, no doubt strongly influenced by personal perspective and experience.

The rising tide of libertarian influence is leaning towards isolationism, while i don't see how any could expect that to work.

JR

PS: this particular action has been offered as an example to discredit claims that we are unilaterally at war with islam. While it is all more complex than such a superficial treatment suggests. Like i said before about simple answers, to simple to be useful.
 
Re: hyper inflation in the USA?

Ron Kreiger said:
Why would we do that? We are a Republic.

Read our Pledge of Allegiance.It specifically states:"to the Republic for which it stands"

Our system by which we elect our Representatives is Democratic as it should be.Our system of Government is Republic! I would certainly not ever want to be part of a true Democracy!

John I don't think he was referring to the UN as much as a US led NATO that bombed the hell out or Serbia.If I remember the UN didn't have much at all to do with it until the end.

It's only natural for someone who's country was decimated because their leaders were practicing Genocide (one still at large) to remain bitter in defeat.The problem was very big before the US and NATO got involved.Some probably wont admit that depending on how their internal struggles affected them directly.

I suppose if you were a part of the regime in power and were working, had property etc. things were fine for you.What about the 8000 Muslim young men and even children murdered by Mladic? I suppose that didn't happen either. Oh that's right the world believes he should be the next Saint and not put to death! Well at least the world according to the "old" Serbiain rule! You know the one where unemployment was non existent!
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Mmmm.... Ron, while everyone may have a right to an opinion.....what makes you an expert on Yugoslavia's politics or any of the current States? Let's go back to the "old rule of politics" which say's: when your house is clean, then, you can criticize other's homes.

Hammer
 
Re: hyper inflation in the USA?

First of all you can not lecture history someone with a history that by far surpasses your own. Our history goes back to the beginning of time (unlike yours) and our conflicts are much much older then your known history. We fought with Muslims (and with each other) for centuries. You are simply incapable to comprehend our differences and similarities.
Yugoslavia was not part of the Warsaw pact and not under Soviet influence. Communism was not even remotely at a Soviet level and we were more of a socialist counrty then a communist one. So dont give me that communist bs. Once Tito died we gain strengts even more. We had 4 by strength army in Europe and our economy was at a greater level then Italy, Spain, Portugal and Greece.
For what i (and most of the people at the Balkans) blame Nato (led by USA) is for supporting the nationalists gain power which leaded to the bloody war.
Funny how you mention 8000 Muslims killed by Mladic. Do you have any idea how many people died in that war? And who actually had most of the casualties? Do you know that there were more then 700 000 Serb refugees from Bosnia and Croatia? Do you know that about 200 000 of them still lives in a very poor conditions?
You dont know anything but what the CNN machinery is serving you with. It is a proven thing for what happened in Yugoslavia, Irak, Kosovo, Afghanistan.
Where is the mass destruction weapon that Sadam had?
It is all about money and corporate prift under the name of democracy.
It is very easy to just seat there and make comments. Come here to see how the real word look like.
Ask your self for how long this can go? A small percentage of the world population is controlling most of the resources on the planet. USA is spending more oil then all others together. You are ruining the planet.
I can go on like this but i am sure you got the point.
 
Well as a close neighbor to the US, I do enjoy having a dollar that is worth more than theirs (for a change. Usually our dollar is less. Saved a lot on some car parts today by ordering stateside and that is all right by me). On the whole however when the usd is at a deficit position to ours we find prices on basic commodities to go up (especially at the pumps. A devalued usd tends to raise prices almost daily. Then again a 20min drive yields at pump prices almost 20 cents cheaper per litre in Sumas or in Bellingham).

The US is such a large consumer based society that it affects anyone that has any form of trade relliance on them. In a few years that should shift off shore to a larger degree as more populous and rapidly industrialising countries begin to assert more and more purchasing power on the world markets. Yeah bugs those in the lower 48 to hear such things as they are intensely proud patriots but those are the mere facts. World power tends to shift around like that.

As to the rest of the stuff,well it is pretty inconsequential in the long run and greater scheme of things.

Sent from my SAMSUNG-SGH-I896
 
Re: hyper inflation in the USA?

Emil Gawaziuk said:
Well as a close neighbor to the US, I do enjoy having a dollar that is worth more than theirs (for a change. Usually our dollar is less.

In a few years that should shift off shore to a larger degree as more populous and rapidly industrialising countries begin to assert more and more purchasing power on the world markets. Yeah bugs those in the lower 48 to hear such things as they are intensely proud patriots but those are the mere facts.

Sent from my SAMSUNG-SGH-I896
Click to expand...

The weak Dollar, coupled with a huge American Debt has ominous signs. While most of my fellow Americans seem to be more interested in Charlie Sheen's manic outbursts, Justin Beiber's new hairstyle, and Kim Kardashian's big ass,.... Japan has seen a major catastrophy, New Zeelanders, and Australia are still hurting from their natural Disasters, Haitians are being starved to death, while being looted of their Charity proceeds. We're still killing innocents in Iraq and Afganistan. Pakistan is playing us like a hooker plays a backwoods virgin, and the big Corporations and Banks are looting America.

We Americans, are well past being the supreme Country we once were..... More than half of all High School aged kids in large Cities quit school. Most college graduates are saddled with huge student loans. Approximately 33% of all Americans are on the dole or work for the "Government". 1 in 8 Americans will eat only one meal today. 1 of every 4 kids in this Country is living in Poverty.

But... we're Americans....

I'm proud to be an American, but not proud of our "leaders", and not proud of our American Corporation's influence in Politics and the World's Economy.

Hammer
 
Re: hyper inflation in the USA?

Marjan Milosevic said:
First of all you can not lecture history someone with a history that by far surpasses your own. Our history goes back to the beginning of time (unlike yours) and our conflicts are much much older then your known history. We fought with Muslims (and with each other) for centuries. You are simply incapable to comprehend our differences and similarities.
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Well if your conflict goes back before we existed, how is this our fault?

We gave Yugoslavia aid even before they were expelled from the soviet cominform in 1948 (a definite attempt by the soviets (IMO) to influence all the communist constituencies as one block.) After the loss of soviet aid, the more independent but still communist Yugoslavia appealed to the west for more aid. Which several countries were more than happy to provide if it weakened soviet influence.
Yugoslavia was not part of the Warsaw pact and not under Soviet influence. Communism was not even remotely at a Soviet level and we were more of a socialist counrty then a communist one. So dont give me that communist bs.
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I won't debate wether the "Socialist Federal Republic of Yugoslavia" was socialist, a republic, or communist... that doesn't matter to hyper inflation, or whatever we are arguing about.

Once Tito died we gain strengts even more. We had 4 by strength army in Europe and our economy was at a greater level then Italy, Spain, Portugal and Greece.
For what i (and most of the people at the Balkans) blame Nato (led by USA) is for supporting the nationalists gain power which leaded to the bloody war.
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I stand by my thesis that a change in situation resulting in lack of unifying control, released the pent up ethnic differences that apparently run deep (and reportedly older than my ability to grasp history :). This release seem coincident with or post the death of Tito.

To bring this slightly on topic, Yugoslavia also experienced a bout of hyper inflation from 1989 to 1993.
Funny how you mention 8000 Muslims killed by Mladic. Do you have any idea how many people died in that war? And who actually had most of the casualties? Do you know that there were more then 700 000 Serb refugees from Bosnia and Croatia? Do you know that about 200 000 of them still lives in a very poor conditions?
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Funny... not even a little.

I don't recall the name of the book but there was an author on cspan a few months ago who published his research on some of the huge economic displacements that occurred after WWII, where entire regions were starved to death. Things like substance farmers having their meager livestock taken away, which they needed to survive. Apparently some of the "intent and organization" over these actions is disputed, but there has been a lot of unnecessary death in many forms and in many places.
You dont know anything but what the CNN machinery is serving you with. It is a proven thing for what happened in Yugoslavia, Irak, Kosovo, Afghanistan.
Where is the mass destruction weapon that Sadam had?
It is all about money and corporate prift under the name of democracy.
It is very easy to just seat there and make comments. Come here to see how the real word look like.
Ask your self for how long this can go? A small percentage of the world population is controlling most of the resources on the planet. USA is spending more oil then all others together. You are ruining the planet.
I can go on like this but i am sure you got the point.
Click to expand...

You can go on like that but you have proved nothing but your venom and perhaps bias.

Yes we consume a disproportionate fraction of the world resources but we have also created a disproportionate amount of world wealth. I suspect we will be living lower off the hog in the future.

We are not the great evil, or sole source of your problems.

It sure would be nice is if people found a new hobby besides killing ethnic rivals.

JR
 
Re: hyper inflation in the USA?

My point is that your government must stop sticking its nose in everyones meal. And i can not stand an ethnic relationship lectures from a nation that almost wiped off an entire race of the planets face. And yes i am thinking about the native Americans. So your ethnic cleansing and genocides are much bigger then anyone else. But hey, who are we to criticize you, you have a bigger gun.
 
Re: hyper inflation in the USA?

And you know what?

After all that happened in this region, we dont have such things like you have.

http://blogs.denverpost.com/captured/2011/02/07/captured-the-ruins-of-detroit/2672/

So it is really time for you to think. Where are you going? And where are you leading the world to go to?
Is this the future we all want for our children?

I dont think so. So please while you can (because seems like you are slowly running out of power and respect) try not to put gas on the fire and let other people decide for their future.

Do you really think you helped people in Irak? Or Afghanistan?
What about the situation in the middle east and north Africa? Sadam was a dictator, Mubarak and Ghadafi too right?
Now watch how they fall and get succeeded buy a Muslim fundamentalist and join the Jihad movement.
Who is their biggest enemy?
Think! That is all i ask from you.
 
Re: hyper inflation in the USA?

Marjan Milosevic said:
My point is that your government must stop sticking its nose in everyones meal. And i can not stand an ethnic relationship lectures from a nation that almost wiped off an entire race of the planets face. And yes i am thinking about the native Americans. So your ethnic cleansing and genocides are much bigger then anyone else. But hey, who are we to criticize you, you have a bigger gun.
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To be fair, it was the British who "colonized" and took over north america. The USA is just what's left over after the conflicts subsided

Jason
 
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