Author Topic: Is Hyperinflation On The Horizon?  (Read 3559 times)

Offline Joe4007

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Re: Is Hyperinflation On The Horizon?
« Reply #30 on: April 02, 2021, 10:39:29 AM »
Japanís deflation is because of a low birth rate and shrinking population.

Government spending causes inflation, not deflation.
Not that I understand it thoroughly, but some believe that as long as that spending is financed by debt, it has a deflationary, or at least a disinflationary, effect (see Dr. Lacy Hunt).

Offline PlatinumGuy

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Re: Is Hyperinflation On The Horizon?
« Reply #31 on: April 02, 2021, 11:10:31 AM »
Not that I understand it thoroughly, but some believe that as long as that spending is financed by debt, it has a deflationary, or at least a disinflationary, effect (see Dr. Lacy Hunt).
Link? I did some googling and the closest I found was an assumption that spending will ultimately lead to deflationary austerity, not a claim that spending itself causes deflation.

Debt financed spending is taking dormant savings and inserting them into the economy, it is pretty universally accepted to be an inflationary action by increasing money in circulation.
״וזה כלל גדול: שישנא אדם כל דבר שקר. וכל מה שיוסיף שנאה לדרכי השקר Ė יוסיף אהבה לתורה.״ - אורחות צדיקים

Online ExGingi

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Re: Is Hyperinflation On The Horizon?
« Reply #32 on: April 02, 2021, 11:13:21 AM »
Japanís deflation is because of a low birth rate and shrinking population.

Government spending causes inflation, not deflation.

https://www.cnbc.com/2021/01/05/us-may-see-underpopulation-not-overpopulation-due-falling-birth-rate.html

Couple that with lower immigration into the US and you are facing a shrinking population. Do you want that addressed like Germany did (welcoming "Arab spring" refugees).

Government spending doesn't necessarily cause inflation.

Debt is deflationary.
I've been waiting over 5 years with bated breath for someone to say that!
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Offline PlatinumGuy

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Re: Is Hyperinflation On The Horizon?
« Reply #33 on: April 02, 2021, 11:22:25 AM »
https://www.cnbc.com/2021/01/05/us-may-see-underpopulation-not-overpopulation-due-falling-birth-rate.html

Couple that with lower immigration into the US and you are facing a shrinking population. Do you want that addressed like Germany did (welcoming "Arab spring" refugees).
So youíre arguing for more immigration?


I agree a falling birth rate created in part by increasing homosexuality is the gravest threat to the US.
״וזה כלל גדול: שישנא אדם כל דבר שקר. וכל מה שיוסיף שנאה לדרכי השקר Ė יוסיף אהבה לתורה.״ - אורחות צדיקים

Offline Joe4007

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Re: Is Hyperinflation On The Horizon?
« Reply #34 on: April 02, 2021, 11:27:30 AM »
Link? I did some googling and the closest I found was an assumption that spending will ultimately lead to deflationary austerity, not a claim that spending itself causes deflation.

Debt financed spending is taking dormant savings and inserting them into the economy, it is pretty universally accepted to be an inflationary action by increasing money in circulation.
https://hoisington.com/economic_overview.html

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Re: Is Hyperinflation On The Horizon?
« Reply #35 on: April 02, 2021, 11:50:29 AM »
Debt financed spending is taking dormant savings and inserting them into the economy, it is pretty universally accepted to be an inflationary action by increasing money in circulation.

You are oversimplifying things and ignoring important factors.

Increased money supply (and there's a bug argument if that is even occurring) is countered by falling velocity of money (partially due to the need to service debt).

Debt financed spending is taking future spending and bringing it forward. As debt grows, a larger portion of money needs to go into servicing that debt, curtailing consumption. Debt servicing is a non-productive expenditure. Spending can either contribute to growth or be totally wasteful.
I've been waiting over 5 years with bated breath for someone to say that!
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Offline cgr

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Re: Is Hyperinflation On The Horizon?
« Reply #36 on: April 02, 2021, 01:31:53 PM »
What about the consequence of a lot of young people having a lot more money than ever before that wasn't earned? I have 2 family members that earned a few K just prior to the pandemic (barely out of their teens) and are now sitting on 50k+ due to unemployment and PPP (not to mention BTC and day trading). I recognize that this might be a localized example and not indicative of the country as a whole, but if it is how does this affect the economy? These kids aren't going to be spending their funds on stuff to stimulate the economy, and if the average 20 year old now has 50k when before he had 5k, doesn't that devalue us all monetarily?

Offline Kobe Bryant

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Re: Is Hyperinflation On The Horizon?
« Reply #37 on: April 02, 2021, 01:47:23 PM »
What about the consequence of a lot of young people having a lot more money than ever before that wasn't earned? I have 2 family members that earned a few K just prior to the pandemic (barely out of their teens) and are now sitting on 50k+ due to unemployment and PPP (not to mention BTC and day trading). I recognize that this might be a localized example and not indicative of the country as a whole, but if it is how does this affect the economy? These kids aren't going to be spending their funds on stuff to stimulate the economy, and if the average 20 year old now has 50k when before he had 5k, doesn't that devalue us all monetarily?
Of course it does. And itís not an isolated incident.

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Re: Is Hyperinflation On The Horizon?
« Reply #38 on: April 02, 2021, 02:06:33 PM »
What about the consequence of a lot of young people having a lot more money than ever before that wasn't earned? I have 2 family members that earned a few K just prior to the pandemic (barely out of their teens) and are now sitting on 50k+ due to unemployment and PPP (not to mention BTC and day trading). I recognize that this might be a localized example and not indicative of the country as a whole, but if it is how does this affect the economy? These kids aren't going to be spending their funds on stuff to stimulate the economy, and if the average 20 year old now has 50k when before he had 5k, doesn't that devalue us all monetarily?

More than monetary devaluation, I am concerned about moral devaluation. Easy money has a moral and character cost.

I actually just checked out the movie "The Ultimate Gift" to see if it's OK to let (some of) my kids watch.

Though talking about all of this without mentioning that it might be one of the סימני הגאולה would be a disservice. We are beginning to witness מעדנים מצויין כעפר (both interpretations: abundant as dust, and valued no more than dust). 
« Last Edit: April 02, 2021, 02:11:23 PM by ExGingi »
I've been waiting over 5 years with bated breath for someone to say that!
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Offline drosenberg88429

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Re: Is Hyperinflation On The Horizon?
« Reply #39 on: April 02, 2021, 02:50:34 PM »
What about the consequence of a lot of young people having a lot more money than ever before that wasn't earned? I have 2 family members that earned a few K just prior to the pandemic (barely out of their teens) and are now sitting on 50k+ due to unemployment and PPP (not to mention BTC and day trading). I recognize that this might be a localized example and not indicative of the country as a whole, but if it is how does this affect the economy? These kids aren't going to be spending their funds on stuff to stimulate the economy, and if the average 20 year old now has 50k when before he had 5k, doesn't that devalue us all monetarily?

Why won't they be spending on stuff to stimulate the economy? On the contrary, I would assume that a very large amount of the money they are gaining with no sweat, and is going to the lower income segment, which always spends a much larger percentage of its income on goods and services than the higher income segments do, will be going straight back into the economy in the form of personal consumption purchases.

I don't think this money is going to be saved or invested responsibly, nor do I think that doing so would be the intention of the stimulus bill.

Offline Lurker

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Re: Is Hyperinflation On The Horizon?
« Reply #40 on: April 02, 2021, 03:02:02 PM »
I don't think this money is going to be saved or invested responsibly,

The vast majority of it will end up in the pockets of those who have already made fortunes preying on the less savvy.
When you find yourself agreeing with me more often than not, it's time for a cheshbon hanefesh.

Offline cgr

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Re: Is Hyperinflation On The Horizon?
« Reply #41 on: April 02, 2021, 03:02:40 PM »
Why won't they be spending on stuff to stimulate the economy? On the contrary, I would assume that a very large amount of the money they are gaining with no sweat, and is going to the lower income segment, which always spends a much larger percentage of its income on goods and services than the higher income segments do, will be going straight back into the economy in the form of personal consumption purchases.

I don't think this money is going to be saved or invested responsibly, nor do I think that doing so would be the intention of the stimulus bill.
I don't know if it's so much about the income bracket a kid grows up in or if it's more about the values they're taught, but they (and from what I've heard many of their friends) are planning on saving up so that they can eventually use it to purchase a home a few years down the line. Will it eventually end up back in circulation? Yes. Will it be within the next 2-3 years when it will probably be most important? I don't think so.
And if it doesn't go back into the economy in the next 2-3 years the damage could already be inflicted so that they'll have no reason to put it into the economy in the next 5-10 years either.

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Re: Is Hyperinflation On The Horizon?
« Reply #42 on: April 02, 2021, 03:05:38 PM »
I don't know if it's so much about the income bracket a kid grows up in or if it's more about the values they're taught, but they (and from what I've heard many of their friends) are planning on saving up so that they can eventually use it to purchase a home a few years down the line. Will it eventually end up back in circulation? Yes. Will it be within the next 2-3 years when it will probably be most important? I don't think so.
And if it doesn't go back into the economy in the next 2-3 years the damage could already be inflicted so that they'll have no reason to put it into the economy in the next 5-10 years either.

This is assuming they actually have that $50k+ in cash and they aren't still day trading and playing with crypto.
When you find yourself agreeing with me more often than not, it's time for a cheshbon hanefesh.

Offline drosenberg88429

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Re: Is Hyperinflation On The Horizon?
« Reply #43 on: April 02, 2021, 03:07:15 PM »
I don't know if it's so much about the income bracket a kid grows up in or if it's more about the values they're taught, but they (and from what I've heard many of their friends) are planning on saving up so that they can eventually use it to purchase a home a few years down the line. Will it eventually end up back in circulation? Yes. Will it be within the next 2-3 years when it will probably be most important? I don't think so.
And if it doesn't go back into the economy in the next 2-3 years the damage could already be inflicted so that they'll have no reason to put it into the economy in the next 5-10 years either.

Those are responsible well raised young adults that will do well in life. That's a lot better than blowing it on a car or dream vacation because easy come easy go and YOLO, even though our stock market thrives on fiscal idiocy.

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Re: Is Hyperinflation On The Horizon?
« Reply #44 on: April 02, 2021, 03:34:01 PM »
I don't know if it's so much about the income bracket a kid grows up in or if it's more about the values they're taught, but they (and from what I've heard many of their friends) are planning on saving up so that they can eventually use it to purchase a home a few years down the line. Will it eventually end up back in circulation? Yes. Will it be within the next 2-3 years when it will probably be most important? I don't think so.
And if it doesn't go back into the economy in the next 2-3 years the damage could already be inflicted so that they'll have no reason to put it into the economy in the next 5-10 years either.

You've just explained why there's no concern of inflation. If anything the concern is the opposite.
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan