Posted on 10/14/2008 12:18:31 PM PDT by Freedom_Is_Not_Free
Sorry, no body to post. Please click link above, then discuss...
Please click the link for a youtube video of Peter Schiff's prediction of future hyperinflation, ignoring the 2nd half of the video which is off topic about Martial laws.
Please discuss.
The Feds have proved they will merely print additional money to paper over any financial or fiscal issues that may arise.
Can you say, “Social Security”?
PING
On a scale of 1 to 10, 1 being no inflation at all and 10 being all out Zimbabwe style hyperinflation, how do you think this crisis is going to end.
Does Peter Schiff make a compelling case for true wheel-barrow full hyperinflation for the US future?
And please list your reasons associated with your 1-10 guesstimate.
Thank you.
So on a 1-10 basis with 10 being true Wiemar, Zimbabwe hyperinflation, do you see this ending in hyperinflation or something less?
Right now, I would say that we're at a 2 if you're going to use Zimbabwe at one end of the spectrum. However, that doesn't mean that our inflation won't be rampant and cause massive job losses.
Right now, I would say that we're at a 2 if you're going to use Zimbabwe at one end of the spectrum. However, that doesn't mean that our inflation won't be rampant and cause massive job losses.
You can surely bet hyperinfation is just around the corner....food isn’t coming down a bit.
Difficult to place it on a scale, but let's try; 5.
I think we will see another 100-200% decline in the fall of the value of the dollar, then they will introduce the amero.
Buy your dollars for about .25 amero.
Which of course is an additional devaluation.
By hyperinflation, I mean that in the course of a single year, you will need millions of dollar to fill the gas tanks and billions to pay the rent.
That is “10” on the scale.
Do you mean to say that is where we are going?
If so, please explain why.
“Past performance does not guarantee future results.”
It is very short-sighted to say “commodities are falling today, therefore there won’t be inflation tomorrow.” That is how people lost their ass at the top of the housing bubble. “House prices are soaring today, so they won’t fall tomorrow”. They did.
Please give me a reason based on economic fundamentals and the amount that the government is committing to spend (which will require future printing) why we won’t experience inflation.
Or do you just think that deflation will outpace inflation, regardless how much the government prints?
Thank you.
I have to scoot shortly, so I cannot lay out my thots in detail, but in brief:
I would expect a devaluation of the USD by 20-35%, but it will not show up in loss of purchasing power for MANY things; because it’s likely to be essentially a canard to preserve the apparent pricing of real estate.
I expect a considerable climb in long interest rates, which will negatively impact housing affordability. It MAY (but I am not strong on this particular conviction) produce the effect of housing prices apparently stopping their decline, but mortgages will climb in rate.
I expect short rates to fall, they are dropping like a rock now. Hence the yield curve will steepen. This MAY provide a boost to the stock market, despite lousy earnings, because it may become the view that the only way to keep up w/inflation is to be in risk assets. Longer term bonds IMO are headed for a particular disaster. I am trying to get my family members to consider this on their bond holdings but I’m not having much success.
Currency wise, virtually ALL currencies will have to devalue.
So to answer your question the way you posed it, I suspect between a 3 and 4 grade inflation.
You are right. It is too early to know, but that is why I’m asking for your best guess. Schiff is convinced we are heading for very high inflation and a real possibility of hyperinflation.
I think he is exaggerating the possibility of hyperinflation from what I can see the government doing at this time.
At the same time, Peter Schiff is a LOT more brilliant and knowledgeable and experienced than I am. So I refuse to fade him entirely.
So would your “2” be high single-digit inflation or low to midland double-digit inflation?
By 5, are you saying 20% inflation or more?
First, the goobermint will start raising taxes at all levels after Nov. 4 with significant increases being passed before the Holidays (back door behind closed doors voted in at midnight type increases).
Increases will most likely go into effect in January, 2009.
Secondly, we will see the cost of food go up even more as the dollar will devalue. Though the dollar may strengthen a little short-term, China is holding the cards.
Thank you for the detailed answer and excellent food for thought with realistic possibility of coming to bear.
Going off topic for this thread, I’m hearing a bond collapse can be in the offing.
But so far I am not hearing anyone support Schiff’s view that a US hyperinflation is even remotely possible. Good.
I agree completely with what Peter Schiff has said - it's just that you put Zimbabwe on one end of your scale, so I had to give a "2" because of that.
I wouldn't be surprised at all to see annual inflation easily get up past 20%, if not more. And that's 'real' inflation - not the bogus numbers that our government lies to you about.
Thanks for clarifying. I know we use the term “hyperinflation” a lot, but it really should be reserved for the out of control situation like Zimbabwe where literally wheelbarrows are needed to carry your money to the grocery store.
This is the risk of using a technical term with a specific meaning (”hyperinflation”) in a more casual way in normal conversation.
So thank you so much for clarifying your view. I would put your projections at about a “3” on my 1-10 scale of hyperinflation.
Thanks.
This is likely to be worse than the Carter era, but there are some major differences between the 1970s and today that will temper some of this inflationary pressure. For one thing, we now have a slave colony (China) whose currency is pegged to the U.S. dollar and who therefore allows U.S. consumers to make purchases from a major trading partner without any regard for the declining strength of the U.S. dollar.
It totally depends on if we go into a depression or have a deep extended recession. A mild short term, (one year) recession and inflation will be manageable.
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