In the following video, Professor Engelhardt says that if he were a "Super Villain" and wanted to destroy an economy, there are two ways that seem obvious to him. The first is "Central Planning", aka. "Socialism" and the Second is Hyperinflation. Since he would be a lazy super villain, he says Central Planning is "too much work", so he would choose hyperinflation. He goes on to say that hyperinflation is difficult to define; even Economists like Murray Rothbard and Ludwig Von Mises used different definitions of plain inflation depending on the context. Generally, inflation was originally defined as an "increase in the money supply in excess of the increase in the demand for money". More … [Read more...]
Hyperinflation in Turkey and Argentina Today?
The Massive Gap Between Official Turkish Inflation and Reality The Turkish economy is a trainwreck. Labor is constantly striking for higher wages because inflation is so high. According to the Labor Studies Group, at least 56 worker strikes broke out in Turkey between January 12th and February 10th, and last year the Turkish currency lost 40% of its value against the U.S. Dollar. Interestingly, contrary to all mainstream Economists, Turkey’s President Erdogan insists that lower interest rates fight inflation. So he has kept interest rates artificially low, making the situation worse. Turkey’s falling exchange rate creates a problem for Turkish businesses that get their revenues in lira and … [Read more...]
9 Inflation Books You Must Read
For the average person, deflation, inflation, and even hyperinflation may seem quite murky or mysterious. However, it's actually a lot easier than you'd think. With the right books, the idea of inflation can be broken down for you, and you can start to understand how monetary inflation works. You might also like: How the FED Controls the Money Supply Money Multiplier Velocity of Money Agflation- What is it? Inflation and Velocity of Money What is the Real Definition of Inflation? Here are 9 books that you have to check out if you want to understand more about inflation. 1) Inflation Matters by Pete Comley Inflation Matters is a truly comprehensive book … [Read more...]
Hyperinflation Strikes Lebanon… Again
Lebanon's economy is crashing and burning... literally. Fiery protests began in August 2019, in the wake of youth unemployment reaching 37% and the general unemployment at 25%. This was even before the entire world shut down due to COVID. And this was just the beginning of hyperinflation for Lebanon. In 2019 Lebanon's inflation rate averaged a reasonable 2.9% for the entire year, but by July 2020 Lebanese inflation was well into hyperinflationary territory at 112.39%. So prices were moving up so fast they had more than doubled from July 2019 through July 2020. And from there it got worse. From August 2019 through August 2020 prices were up over 120%. And remember that the average for 2019 … [Read more...]
January Inflation Setting Stage for Big Run Up
Inflation Summary: Annual Inflation up from 1.36% in December to 1.40% in January. CPI Index rose slightly from 260.474 in December to 261.582 in January. Monthly Inflation for December was 0.09%, January was 0.43%. Next release March 10th Annual inflation for the 12 months ending in January was 1.40% The CPI index itself was up from 260.474 in December to 261.582 in January. Resulting in a monthly inflation rate of 0.43%. Annual inflation for the 12 months ending in December was 1.36%, the 12 months ending in January was 1.40%. Since the BLS rounds their numbers they report both as 1.4%. Setting the Stage for Inflation Due to the Corona Virus, March and April … [Read more...]
Why Hasn’t the U.S. Dollar Experienced Hyperinflation?
I recently answered this question on Quora and thought I'd share the answer here as well. Why hasn't the U.S. dollar experienced hyperinflation? That is an excellent question. As we can see from the chart the FED has engaged in 4 major phases of Quantitative Easing (QE) where they drastically increased their “assets” and one phase of Quantitative Tightening (QT) where they tried to decrease their assets. FED assets is sort of a euphemism for money printing. Basically, it involves creating money out of thin air and then buying something. That “something” becomes an asset on the FED’s books. Prior to 2008, the primary thing the FED bought was U.S. Treasury debt i.e. Treasury Bills, Bonds, … [Read more...]
A Guide for Business Owners: How to Prepare Your Organization for Inflation
COVID-19 has brought the global economy to its knees and in response, the governments of the world have opened the money printing spigots. The U.S. FED for instance has bought roughly 3 TRILLION in assets this year (labeled "Quantitative Easing 4" on this chart). Many fear that this much "money printing" will result in massive inflation or even hyperinflation. As you can see from the chart below, high inflation rates were the bane of the 1970s and early 1980s when the inflation rate rarely dipped below 4%. By contrast, the period beginning with the new millennium has rarely seen inflation go above 4%. Inflation in the 1970s caused much suffering and business disruption, … [Read more...]
Inflation Quintuples… Still Below 1%
Annual Inflation Rebounds Annual Inflation rose to 0.65%. CPI Index rose from 256.394 in May to 257.797 in June. Monthly Inflation for June was 0.55%, May was 0.002%, April was -0.67%, March was -0.22%, February was 0.27%. The FED may be slowing its "Quantitative Easing" in an effort to prevent hyperinflation. FED Funds Rate up slightly but still remains near Zero. Next release August 12th The Bureau of Labor Statistics Released the Inflation Data for the 12 months ending in June on July 14th. Monthly Inflation SOARS to 0.55%. Annual inflation for the 12 months ending in June was 0.65%, May was 0.12%, April was 0.33%, March was 1.54% down sharply from February's … [Read more...]
Is the FED Tightening or Is Hyperinflation on the Horizon?
Recently a prophecy has been trending on YouTube. In it, the possibility of major upheaval in November is mentioned, combined with the possibility of hyperinflation. As I've mentioned before, beginning in March 2020, the FED created massive amounts of liquidity through Quantitative Easing in an effort to combat the monetary effects of shutting the country down due to the virus. If that is combined with a reduction in the quantity of goods and services created due to the virus or riots shutting down the means of production we could see hyperinflation. So that would play into fulfilling that prophesy. Back on April 1st, I wrote an article entitled Will the $2 Trillion Covid-19 Stimulus … [Read more...]
Will the $2 Trillion Covid-19 Stimulus Cause Inflation?
The current round of massive Corona Virus easing began Monday March 16th, 2020, with the FED buying $40 billion in Treasuries and then buying another $50 billion in Treasuries on Tuesday. By Thursday morning, it had upped the plan to $75 billion PER DAY and added $10 billion in mortgage securities. By Friday morning, the Fed had decided to buy $107 billion worth of Treasuries and mortgage-backed securities. In its first week, the FED purchased $317 billion worth of assets, which is slightly faster than the Fed balance sheet grew at the height of the 2008-2009 financial crisis. Initially, the Federal Reserve estimated purchases of $500 billion but FED chief Jerome Powell said the initial … [Read more...]