“America sits on an ever growing mountain of debt that will soon bring hyper-inflation.”
Folks have been saying this for quite a few years now. My question is, what is holding inflation at the pace it is at?
What is really heart-breaking is the little guy who gets suckered into flipping his IRA into Gold. Now it is melting. Should he buy or sell?
Massive withdrawal of capital. The reason there is no inflation is that the Feds are barely improving liquidity. Obama’s actions are scaring the markets. The Fed’s ZIRP is punishing the prudent and the wise and rewarding the frivolous and foolish, along with the politically connected criminal.
Yes, that is the trillion dollar question.
I think we are in uncharted waters. There has never been a superpower hyperinflating before.
-——what is holding inflation at the pace it is at?-——
One large factor in the inflation equation is wages. Wages are being held down by unemployment. In strong demand, wages reflect the supply and can rise. When there is an excess of workers, the cost can be stable.
There are two administration efforts to raise wages.Raise the minimum wage and increase the wages on union contracts.
What is keeping inflation from hitting the US is the weakness in the European and Asian economies. Right now the American dollar remains the world’s leading currency, because so many other currencies are weak. The situation is like a volcano. The pressure continues to build, but the top hasn’t yet blown off. When it hits, it will be sudden and massive. I am old enough to remember how quickly inflation spiralled in the early 70s.