Hyperinflation Likelyhood Poll - Your view

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Hyperinflation of USD within 10 years - Nailed on certainty or No chance - What is your view?

I bet the pension on it (much sooner - before 2015)
4
24%
Extremely Probable
5
29%
Probable
4
24%
50/50 (fence sitters of the world take over)
1
6%
Not Probable
3
18%
No Chance
0
No votes
 
Total votes : 17

Re: Hyperinflation Likelyhood Poll - Your view

Postby triple-agent » Fri Oct 18, 2013 11:16 am » Firefox 24.0 Firefox 24.0  Windows Vista Windows Vista  Screen Resolution: 1280 x 1024 1280 x 1024

still haven't changed my mind on this one - high inflation = yes ( a la Jim Rickards thesis), hyperinflation = nah (as in USD losing at least half its value every month)
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Re: Hyperinflation Likelyhood Poll - Your view

Postby Pixel8r » Fri Oct 18, 2013 11:36 am » Safari 6.0.5 Safari 6.0.5  Mac OS X Mac OS X  Screen Resolution: 1920 x 1200 1920 x 1200

If you agree there would be high inflation what do you think would cause it to not become hyper?

As far as I can see it is all a matter of time and hyperinflation is the ultimate outcome. I can't see how the US would ever be able to inflate their debt away via merely high inflation, it is just to large, meaning that things just continue to get worse. Eventually leading to a complete loss in faith of the currency.
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Re: Hyperinflation Likelyhood Poll - Your view

Postby triple-agent » Fri Oct 18, 2013 11:57 am » Firefox 24.0 Firefox 24.0  Windows XP Windows XP  Screen Resolution: 1024 x 600 1024 x 600

Pixel8r » Fri Oct 18, 2013 11:36 am wrote:If you agree there would be high inflation what do you think would cause it to not become hyper?

As far as I can see it is all a matter of time and hyperinflation is the ultimate outcome. I can't see how the US would ever be able to inflate their debt away via merely high inflation, it is just to large, meaning that things just continue to get worse. Eventually leading to a complete loss in faith of the currency.


one word pix.........time

look at a long term cable chart for example, one global reserve currency handing the baton over to another, next stop the yuan

Image

continual $ erosion, debt write downs, new paradigms, kicking the can down the road.

we only finished paying off our war loans to the US a few years ago

Jim Rickards at his best imo....http://www.financialsense.com/financial ... -inflation
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Re: Hyperinflation Likelyhood Poll - Your view

Postby Pixel8r » Fri Oct 18, 2013 12:44 pm » Safari 6.0.5 Safari 6.0.5  Mac OS X Mac OS X  Screen Resolution: 1920 x 1200 1920 x 1200

What level of inflation is classified as hyper inflationary? It all comes down to definitions really, according to wikipedia it gives the following factors for defining hyperinflation;

  • The general population prefers to keep its wealth in non-monetary assets or in a relatively stable foreign currency. Amounts of local currency held are immediately invested to maintain purchasing power
  • The general population regards monetary amounts not in terms of the local currency but in terms of a relatively stable foreign currency. Prices may be quoted in that currency;
  • Sales and purchases on credit take place at prices that compensate for the expected loss of purchasing power during the credit period, even if the period is short;
  • Interest rates, wages, and prices are linked to a price index; and
  • The cumulative inflation rate over three years approaches, or exceeds, 100%.


Losing 100% over 3 years is entirely possible IMO. We have already seen the price of gold (real money) move from $650 in 2008 to $1920 in 2011 which is over 100% move in 3 years, many other prices did double in that time.

This is also of interest from the wiki article;

Monetary inflation can become hyperinflation if monetary authorities fail to fund increasing government expenses from taxes, government debt, cost cutting, or by other means, because either

  • during the time between recording or levying taxable transactions and collecting the taxes due, the value of the taxes collected falls in real value to a small fraction of the original taxes receivable; or
  • government debt issues fail to find buyers except at very deep discounts; or
  • a combination of the above.
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Re: Hyperinflation Likelyhood Poll - Your view

Postby triple-agent » Fri Oct 18, 2013 1:33 pm » Firefox 24.0 Firefox 24.0  Windows XP Windows XP  Screen Resolution: 1024 x 600 1024 x 600

Pixel8r » Fri Oct 18, 2013 12:44 pm wrote:What level of inflation is classified as hyper inflationary? It all comes down to definitions really......


indeed

i always thought of hyper as being at least 50% loss of purchasing power each month

Ruinously high increase (50 percent or more per month) in prices due to the near total collapse of a country's monetary system, rendering its currency almost worthless as a medium of exchange.

Read more: http://www.businessdictionary.com/defin ... z2i52B2qZ7
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Re: Hyperinflation Likelyhood Poll - Your view

Postby Pixel8r » Fri Oct 18, 2013 1:59 pm » Safari 6.0.5 Safari 6.0.5  Mac OS X Mac OS X  Screen Resolution: 1920 x 1200 1920 x 1200

The thing is once inflation takes hold there will be no holding it back in the US. To get control of inflation in the 70's Volcker needed to raise the interest rate to 2% above the CPI rate (as calculated then). So basically using the then calculations for CPI we are looking at nearly a 9% rate now, meaning interest rates would need to move to 11% currently!

The trillions of interest rate swaps in the derivative market means that there is no way they can raise interest rates to attempt to control inflation, hence once it takes hold we are in for a quick transition to hyper.

Here's a graph from shadowstats which shows the rate of inflation using the 1980 methods for calculation;

Image

As fwiw would say "there is no spoon" :)
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Re: Hyperinflation Likelyhood Poll - Your view

Postby Pixel8r » Fri Oct 18, 2013 10:59 pm » Safari 6.0.5 Safari 6.0.5  Mac OS X Mac OS X  Screen Resolution: 1680 x 1050 1680 x 1050


He appears to of changed his mind... deflationary depression or hyper inflation.

Watch on youtube.com
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Re: Hyperinflation Likelyhood Poll - Your view

Postby id5 » Sat Oct 19, 2013 7:55 am » Internet Explorer 10 Internet Explorer 10  Windows Seven 64 bits Windows Seven 64 bits  Screen Resolution: 1920 x 1080 1920 x 1080

triple-agent » Fri Oct 18, 2013 11:16 am wrote:still haven't changed my mind on this one - high inflation = yes ( a la Jim Rickards thesis), hyperinflation = nah (as in USD losing at least half its value every month)


I am with you on this as well, I expect it to be high interest rates not hyper.
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Re: Hyperinflation Likelyhood Poll - Your view

Postby Laura » Sat Oct 19, 2013 8:40 am » Google Chrome 30.0.159 Google Chrome 30.0.159  Windows Seven Windows Seven  Screen Resolution: 1440 x 900 1440 x 900

id5 » Sat Oct 19, 2013 8:55 am wrote:
triple-agent » Fri Oct 18, 2013 11:16 am wrote:still haven't changed my mind on this one - high inflation = yes ( a la Jim Rickards thesis), hyperinflation = nah (as in USD losing at least half its value every month)


I am with you on this as well, I expect it to be high interest rates not hyper.


:wtf: :yawn: but high IRs mean property & gold will collapse together :( :think: .... :silent:

No. I'm sticking with my ignore-it-all policy. Only when a wolf-pack of black swans all tap me on the shoulder, (or I see a Scottish polar bear from a train window), will I take a glance :snooty:
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Re: Hyperinflation Likelyhood Poll - Your view

Postby Pixel8r » Sat Oct 19, 2013 8:48 am » Safari 6.0.5 Safari 6.0.5  Mac OS X Mac OS X  Screen Resolution: 1680 x 1050 1680 x 1050

Laura » Sat Oct 19, 2013 9:40 am wrote:
id5 » Sat Oct 19, 2013 8:55 am wrote:
triple-agent » Fri Oct 18, 2013 11:16 am wrote:still haven't changed my mind on this one - high inflation = yes ( a la Jim Rickards thesis), hyperinflation = nah (as in USD losing at least half its value every month)


I am with you on this as well, I expect it to be high interest rates not hyper.


:wtf: :yawn: but high IRs mean property & gold will collapse together :( :think: .... :silent:

No. I'm sticking with my ignore-it-all policy. Only when a wolf-pack of black swans all tap me on the shoulder, (or I see a Scottish polar bear from a train window), will I take a glance :snooty:

I think he has just mistyped interest instead of inflation.

We have moved past the time when there could just be high inflation to deal with this, as Jim Rickards explains in the video above the choices now are deflationary depression or hyperinflation.
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Re: Hyperinflation Likelyhood Poll - Your view

Postby Laura » Sun Oct 20, 2013 4:47 am » Google Chrome 26.0.141 Google Chrome 26.0.141  Android Android  Screen Resolution: 960 x 544 960 x 544

Wee Macleod is now a Substantial Hyperinflationista with his new infra-guess FMQ method of chaos (or football result) forecasting.

http://www.peakprosperity.com/podcast/8 ... sperity%29
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Re: Hyperinflation Likelyhood Poll - Your view

Postby triple-agent » Sun Oct 20, 2013 6:56 am » Firefox 24.0 Firefox 24.0  Windows XP Windows XP  Screen Resolution: 1024 x 600 1024 x 600

Pixel8r » Fri Oct 18, 2013 10:59 pm wrote:

He appears to of changed his mind... deflationary depression or hyper inflation.

Watch on youtube.com


i haven't had a chance to listen to this yet - will do tonight

however, i will listen closely to what he says and see if it matches the sensationalist headline
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Re: Hyperinflation Likelyhood Poll - Your view

Postby Pixel8r » Sun Oct 20, 2013 7:42 am » Safari 6.0.5 Safari 6.0.5  Mac OS X Mac OS X  Screen Resolution: 1680 x 1050 1680 x 1050

6 minutes on is here he gets to the talk of inflation...
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Re: Hyperinflation Likelyhood Poll - Your view

Postby id5 » Sun Oct 20, 2013 10:07 am » Internet Explorer 10 Internet Explorer 10  Windows Seven 64 bits Windows Seven 64 bits  Screen Resolution: 1920 x 1080 1920 x 1080

Pixel8r » Sat Oct 19, 2013 8:48 am wrote:
Laura » Sat Oct 19, 2013 9:40 am wrote:
id5 » Sat Oct 19, 2013 8:55 am wrote:...

I am with you on this as well, I expect it to be high interest rates not hyper.


:wtf: :yawn: but high IRs mean property & gold will collapse together :( :think: .... :silent:

No. I'm sticking with my ignore-it-all policy. Only when a wolf-pack of black swans all tap me on the shoulder, (or I see a Scottish polar bear from a train window), will I take a glance :snooty:

I think he has just mistyped interest instead of inflation.

We have moved past the time when there could just be high inflation to deal with this, as Jim Rickards explains in the video above the choices now are deflationary depression or hyperinflation.


Definitely a typo on my part

But then I got to thinking what if..... There are already cases of fixed rate mortgages in Ireland being raised because of exceptional circumstances and SVR's in the UK that were meant to have a top rate guarantee in the UK. What if a high level of inflation occurs and banks use the "exceptional circumstances" clause raising the interest rates to cover. Once done the economy moves into hyper, still an outside possibility, and they do the same again. In either case the debt holder is screwed and I expect become very militant, I wonder at what point they would force a debt jubilee...before TPTB are overthrown.
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Re: Hyperinflation Likelyhood Poll - Your view

Postby Pixel8r » Sun Oct 20, 2013 10:36 am » Safari 6.0.5 Safari 6.0.5  Mac OS X Mac OS X  Screen Resolution: 1680 x 1050 1680 x 1050

Debt jubilee is a daft idea and will never happen these days, there are too many who have massive BTL portfolios and equity release loans. A better idea would be for the UK to adopt the US system where you can just hand the keys back.
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Re: Hyperinflation Likelyhood Poll - Your view

Postby id5 » Sun Oct 20, 2013 12:18 pm » Internet Explorer 10 Internet Explorer 10  Windows Seven 64 bits Windows Seven 64 bits  Screen Resolution: 1920 x 1080 1920 x 1080

Pixel8r » Sun Oct 20, 2013 10:36 am wrote:Debt jubilee is a daft idea and will never happen these days, there are too many who have massive BTL portfolios and equity release loans. A better idea would be for the UK to adopt the US system where you can just hand the keys back.


...these days...

They would certainly no longer be these days, but a hand back a-la the US could be possible, it would at least remove the aspect of debt in perpetuity. Rent control on all handed back properties would also slow down any militancy.
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Re: Hyperinflation Likelyhood Poll - Your view

Postby triple-agent » Wed Oct 23, 2013 10:41 am » Firefox 24.0 Firefox 24.0  Windows Seven 64 bits Windows Seven 64 bits  Screen Resolution: 1366 x 768 1366 x 768

Pixel8r » Sun Oct 20, 2013 7:42 am wrote:6 minutes on is here he gets to the talk of inflation...


this is where its gets complicated.....

Having listened to the video you posted twice now, everything on the inflationary side that JR talks about is exactly that inflationary. Yes he does throw in the comment 'hyperinflationary' but to me this is a glib comment to highlight a highly inflationary event.

Turning to the podcast i posted, http://www.financialsense.com/financial ... -inflation

listen in from 15:00 - 16:00. JR talks about a gold revaluation scenario and indeed mentions an 'extremely hyperinflationary' event such that we have $7000 gold / $400 oil / $100 silver / $20 copper

so what is the point i am making i hear you say! well, whilst we may have an instantaneous revaluation event this in itself doesn't really fit the classic hyperinflation scenario where the currency becomes worthless, point being in JR's scenario, $400 dollars will still buy you a barrel of oil etc and hence is not worthless.

I actually feel we are in agreement on many things however, it is the nuances of the word hyper-inflation that bothers me, look at the Weimar chart of gold-mark relationship for a true hyperinflation:

Image

here the currency has become worthless and no amount of marks will buy you a barrel of oil.

so yes, hyperinflationary event but hyperinflation? i guess its down to the true agreed definition of hyperinflation
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Re: Hyperinflation Likelyhood Poll - Your view

Postby Pixel8r » Wed Oct 23, 2013 8:20 pm » Safari 6.0.5 Safari 6.0.5  Mac OS X Mac OS X  Screen Resolution: 1680 x 1050 1680 x 1050

triple-agent » Wed Oct 23, 2013 11:41 am wrote:so yes, hyperinflationary event but hyperinflation? i guess its down to the true agreed definition of hyperinflation

Yes we are basically in agreement then and yes it does come down to definition. This definition of hyperinflation which I posted earlier from wikipedia I expect to come true in the states over the next few years - my comment added in red

  • The general population prefers to keep its wealth in non-monetary assets or in a relatively stable foreign currency. Amounts of local currency held are immediately invested to maintain purchasing power - probably about half way there
  • The general population regards monetary amounts not in terms of the local currency but in terms of a relatively stable foreign currency. Prices may be quoted in that currency; - Not the case yet but starting to happen (gold & silver made legal tender in certain US states)
  • Sales and purchases on credit take place at prices that compensate for the expected loss of purchasing power during the credit period, even if the period is short; - Not the case yet
  • Interest rates, wages, and prices are linked to a price index; and - Sort of the case but tied to manipulated indexes
  • The cumulative inflation rate over three years approaches, or exceeds, 100%. - Happened already between 2008 and 2011 when looking at certain commodities
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Re: Hyperinflation Likelyhood Poll - Your view

Postby wee Jinky » Wed Oct 23, 2013 11:24 pm » Safari 4.0 Safari 4.0  Android Android  Screen Resolution: 1280 x 800 1280 x 800

I think we will see the introduction of a new currency before hyperinflation takes place
$100 old will exchange for $1 new, it will mask the effects of hyperinflation but without doing so
we would see a Weimar scenario.Prices will have to be revalued of course and this is where the theft
will be evident
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Re: Hyperinflation Likelyhood Poll - Your view

Postby Pixel8r » Thu Oct 24, 2013 10:16 am » Safari 6.0.5 Safari 6.0.5  Mac OS X Mac OS X  Screen Resolution: 1920 x 1200 1920 x 1200

wee Jinky » Thu Oct 24, 2013 12:24 am wrote:I think we will see the introduction of a new currency before hyperinflation takes place
$100 old will exchange for $1 new, it will mask the effects of hyperinflation but without doing so
we would see a Weimar scenario.Prices will have to be revalued of course and this is where the theft
will be evident

Crossing zeros of the currency wouldn't stop hyperinflation or fool anyone as what is happening.

I kind of think there will be a some new world reserve currency come in that is asset backed (a collection of commodities, inc. gold, silver, oil, wheat etc.). I don't think it will help the west from becoming a lot poorer though.
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