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One Hyperinflationist has a go at it

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  • #16
    Re: One Hyperinflationist has a go at it

    Originally posted by karim0028 View Post
    Gonzalo says that inflation will hit 30%... Isnt that exactly what EJ says? EJ obviously said it first, so Gonazalo subscribes to that view, not exactly junk.....
    but 30% is not hyperinflation...

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    • #17
      Re: One Hyperinflationist has a go at it

      Originally posted by metalman View Post
      but 30% is not hyperinflation...
      Yes it is (if three years) by Wikipedia definition.

      Definitions used vary from the International Accounting Standards Board´s a cumulative inflation rate over three years approaching 100% (26% per annum compounded for three years in a row) to Cagan´s (1956) "inflation exceeding 50% a month."

      http://en.wikipedia.org/wiki/Hyperinflation

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      • #18
        Re: One Hyperinflationist has a go at it

        Originally posted by jpatter666 View Post
        Yes it is (if three years) by Wikipedia definition.

        Definitions used vary from the International Accounting Standards Board´s a cumulative inflation rate over three years approaching 100% (26% per annum compounded for three years in a row) to Cagan´s (1956) "inflation exceeding 50% a month."

        http://en.wikipedia.org/wiki/Hyperinflation
        itulip sez 30% for only 1 yr... so not hyperinflation.

        for the lazy...

        site:itulip.com hyperinflation

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        • #19
          Re: One Hyperinflationist has a go at it

          Originally posted by coolhand View Post
          TPC - you are assuming the Fed works for the American public, or cares if their food/gas prices are rising sharply.
          I must have miscommunicated somewhere along the line here. That's about the last thing I'm assuming.

          I'm not sure to which post you respond, but I'm guessing it's the one that reads:
          The Fed can't raise rates presently, as that would be seen by the public as further crushing an economy already weak.

          But once inflation gets a start, and the public message is turned around to blame inflation for our economic woes, then the public will demand that the Fed raise rates, to "fix" the problem, just like Volker did in the early 1980's.
          By this post, I did not mean to suggest that the real reason the Fed would raise interest rates would be to counter-act consumer visible inflation.

          Rather I meant to suggest that consumer visible inflation would be the apparent (propaganda driven) reason. If the Fed tried to raise rates while the real estate market, job market and economy were still in a major slump, that would be politically difficult, unless they first create a larger boogie man (e.g. inflation) in the public mind. So that they shall do.

          The real reason, in my twisted (not conforming to iTulip's positions) view, that the Fed will raise interest rates sharply is to depress the price of long U.S. Treasury bonds, so that some powerful inside interests can buy many Trillion Dollars worth of them dirt cheap.
          Most folks are good; a few aren't.

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          • #20
            Re: One Hyperinflationist has a go at it

            I'd define it as rampant inflation. We had roughly 100% yearly for several years in a row, the worst being 175% yearly in 1987. Hiperinflation in my view is when you lose any reference to the money value within days.
            sigpic
            Attention: Electronics Engineer Learning Economics.

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            • #21
              Re: One Hyperinflationist has a go at it

              Originally posted by ocelotl View Post
              I'd define it as rampant inflation. We had roughly 100% yearly for several years in a row, the worst being 175% yearly in 1987. Hiperinflation in my view is when you lose any reference to the money value within days.
              Can the USA have a peso problem?
              Ed.

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              • #22
                Re: One Hyperinflationist has a go at it

                Originally posted by coolhand View Post
                TPC - you are assuming the Fed works for the American public, or cares if their food/gas prices are rising sharply. I disagree that they do. Yesterday's Bloomberg article noting that the NY Fed recently solicited the Primary Dealers for their opinion about the appropriate size of QE 2 suggests the Fed works for the banks.

                I note the NY Fed did not ask me if I like $7 corn or $4.50 gasoline.

                I hope you are right - I am sitting on a 5% 30-yr fixed jumbo mortgage, and am effectively cash collateralized on it with inflation-sensitive investments. I would love for my bank to pay me 8% interest on my mortgage balance like the Volcker years while I'm paying them tax-effected 5% (3.5% net) interest on my mortgage. I'll incorporate myself as a bank. Too many customers like me & they will be insolvent, but the other way!!

                IMO, if the banks are insolvent, the Fed will do what they need to do to keep them solvent. Everyone else be damned.
                what i don't understand is this; how can these analysts make predictions about the quantity of gold held by the US when they all admit there has been no audit for a decade. I notice in all cases that the predictions are that the US does not have to gold it says it does. What if the US government have been secretly purchasing gold and increasing the quantity held? What do their analyses look like then?

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                • #23
                  Re: One Hyperinflationist has a go at it

                  Originally posted by FRED View Post
                  http://www.itulip.com/forums/showthr...a-Peso-Problem
                  http://www.itulip.com/forums/showthr...blem-revisited

                  The related threads on the forum.

                  I think the problem most hyperinflationists have is considering the perspective of the US in the world context as compared to the image of previous hyperinflationist countries/periods:
                  - Complete withdrawn of capitals
                  - Dismantling or complete stop of local economy
                  - Minimum or nil impact on most of the rest of the world
                  - Lack of intervention by world organizations before the full impact of the crisis
                  - The existence of a reference currency frame to compare to in terms of perceived stability or quality

                  When all of this develops, it will be certain that not only Dollar will have hyperinflation, all world currencies will suffer it.
                  sigpic
                  Attention: Electronics Engineer Learning Economics.

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                  • #24
                    Re: One Hyperinflationist has a go at it

                    Originally posted by don View Post
                    Thursday, October 28, 2010

                    Signs Hyperinflation Is Arriving

                    2012 will be the bad year: I predict that hyperinflation’s tipping point will be no later than the first quarter of 2012. From there, it will accelerate. By the end of 2012, I would not be surprised if the CPI for the year averaged 30%.

                    By that point, the rest of the economy—unemployment, GDP, all the rest of it—will be in the toilet. [FONT=Georgia]By that point, the rest of the economy will no longer matter: The collapsing dollar will make 2012 the really really bad year of our Global Depression.
                    Sometimes it's fun to go back and revisit some old economic predictions that didn't pan out. There's no shortage of 'em. What might have gone wrong with this one?

                    It boils down to one thing: confusing the CPI - Consumer Price Index - with inflation.

                    From my perspective, the prediction of hyperinflation turned out to be correct. The part that went wrong is that it wasn't recorded in the CPI. Why? Two reasons: 1) it didn't last long enough; and 2) it was largely canceled out by the hyperdeflation that preceded it.

                    Using a measure of inflation - i.e. depreciation in the market value of the dollar - that records shorter term movements than those captured in consumer prices, we can resolve details that are lost in consumer price measures. This chart shows two phases of hyperinflation; one extending from March of 2009 to December 2009 and another from June 2010 to March 2011. The rate of inflation during each of these two periods was (depending on the exact choice of end points) on the order of 50%. But the total length of the hyperinflationary spell from these two periods put together was only about 20 months. Meanwhile, they were closely preceded by a hyperdeflationary period - a deflationary crash - of about the same total magnitude in only 10 months. Consumer prices just don't respond quickly enough to capture such large magnitude but short duration events ... they only briefly registered a small deflation in consumer prices followed by a still fairly small bout of inflation as the shock waves we see in this depiction of the value of the dollar filtered through the pricing chain and finally into consumer prices.

                    Finster
                    ...

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