Hyperinflationists Come Out of the Woodwork Again
CoinDesk asked me to share my opinions on the chance of hyperinflation. My thoughts are below.
From CoinDesk
Hi Mish,
I am working on an article for CoinDesk about recent fiscal and monetary splurge by governments and central banks across the globe and the impact on gold and bitcoin. As I see, a majority of analysts and economists are calling for hyperinflation and rally in gold.
Could you please share your take?
Thanks
CoinDesk
Matter of Definitions
Before there can be a rational debate on anything, people must agree on definitions.
I believe most people would accept this definition: Hyperinflation is the complete collapse in currency against every other asset.
Pick a currency, say the US dollar. To bet on hyperinflation and be correct, the dollar would have to go nearly worthless vs the Euro, the Pound, the Yen.
Alternatively, 50% in a single month would quality. Professor Hanke defines Hyperinflation as a 50% Currency Collapser in a Month.
Q: How likely is that?
A: Close to zero.
Replay Discussion
Curiously, this is a replay of my 2010 article Williams Calls for “Great Hyperinflationary Great Depression”.
Williams is John Williams of Shadowstats. He was not alone. Here is a snip changing the name Williams to “Hyperinflationsists” in the first word of these four points.
- Hyperinflationists focus on money supply, ignoring credit although credit is far more important.
- Hyperinflationists ignore numerous global interconnections. Calling for hyperinflation in the US alone ignores happenings in Europe, Japan, and China. I remain amazed at how US-centric hyperinflationists in general are.
- Hyperinflationists ignore US gold holdings, the largest in the world.
- Hyperinflationists ignore the massive influence of consumer attitudes and bank attitudes towards lending.
To expect the US dollar to go to zero vs the Euro, Yen, Food, gold, Yuan, etc., was then and is now pure silliness.
…click on the above link to read the rest of the article…
