Hyper-Inflation or Hyper-Deflation

Coin Toss: Hyper-Inflation Or Hyper-Deflation


Most people don't understand what hyper-inflation or deflation is. Even experts have confused themselves trying to describe it. Some believe that rising costs of food, gas, shelter, etc., is inflation and in a way it is but it has to do with currency creation. The more that's created, the more it's 'inflated'.

The inflation of currency by central banks manifests itself in the form of higher prices at the pumps and grocery stores. A home that cost $50,000 in 1982 now goes for half a mill or more. Some folks saw through the smoke and flipped houses, making a tidy profit while most ended up with a disparagingly high mortgage.

Inflation has been under way since the 1960s and really started taking off after Nixon decoupled the dollar from gold in August, 1971. Every time there's been a crisis, more money was printed. Instead of saving for any future crises, our dear leaders have borrowed us into oblivion, sentencing each us to a lifetime of income taxation.

Income tax was supposed to be temporary when it was first introduced during World War I. Looks like that was a fake news story, too.

Here we are today with the world awash in debt. This is the hyper-inflation so many have predicted. We are living through it right now. While central bankers are claiming to be tightening starting this spring, it has come to the point that no matter what they do, they will set off a recession, if we aren't in one already. If they print more... recession. If they don't print... recession!

Can there be a hyper-deflation? Yes, if things get too expensive, people will simply stop spending their money, crushing the velocity of money. Just like in the 1930s, they will hide their money 'under the mattress', only spending on basic necessities. Everything else will get impacted, forcing down prices. Until then, the people will cause a deflation by only spending on what they really need.

In a recession, you can have both a hyper-inflationary and a hyper-deflationary event, as I've explained above. Many will say you can't have both but I beg to differ. Did you know the 1930s created more millionaires than any other time in history. A hundred years from now, they'll be looking at us and saying, 'did you know more billionaires were created than any other time in history?'

I believe we are at an inflection point where central bankers must make one final move before it's all over, Weimar Republik / Zimbabwe style. Look to Gold, silver and Bitcoin to hedge against whatever move they make.

John Williams of ShadowStats.com says the present inflation rate is just under 15%, slightly higher than the 2% central bankers claim they can never hit. He says if central bankers raise rates, a depression will follow. I have to agree with him. USAWatchDog's Greg Hunter just published an interview with John Williams where he points all this out. I'll believe him before I believe government numbers.

 

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SweptOverNiagara
SweptOverNiagara

Name's Joe and I live in Ontario, Canada. I like writing on a wide variety of topics. I enjoy keeping track of markets, investing and commodities and the crypto sector. Also do some coding for web browsers.


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