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by PolygonSheep
1528 days ago
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How can we tell if Zimbabwe/Venezuela style hyperinflation is a real risk in the US? I used to read ZeroHedge 10 years ago where every day they would point to an increase in the Fed balance sheet/money supply/deficit/debt to GDP ratio/something and proclaim hyperinflation and the end of the world as we know it is right around the corner. Obviously that didn't happen (and after a few missed predictions, I abandoned all "doomer" media). But what are the warning signs that stuff is seriously going off the rails and it's really time to worry? |
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I dont believe that will happen. As you know hyperinflation is >50%/month. At the current 500%. It would be over in 10 months. That's moving awfully fast for the economy. No if hyperinflation does happen, it will be something else that sparks this. That something else could be happening right now and won't be reported on because everyone who knows will be busy GTFO.
>I used to read ZeroHedge 10 years ago where every day they would point to an increase in the Fed balance sheet/money supply/deficit/debt to GDP ratio/something and proclaim hyperinflation and the end of the world as we know it is right around the corner.
10 years ago is 2010. Middle of financial crisis where this all starts. They are correct in a book smart point of view. In practice we know say X,Y,Z happen and therefore A, B, C happen later. We don't have exact science saying it happens exactly 93 days, 4 hours later. People also having read the zerohedge criticism will look at the problem again and may make a change that in their estimation fixes the problem. Perhaps only delaying the inevitable.
When the tires hit the road... things are murkier.
>Obviously that didn't happen (and after a few missed predictions, I abandoned all "doomer" media). But what are the warning signs that stuff is seriously going off the rails and it's really time to worry?
https://www.federalreserve.gov/econres/notes/feds-notes/pred...
They do it by yield curve.
https://www.incrediblecharts.com/economy/yield_curve.php
Here's the live data: https://www.marketwatch.com/investing/bond/tmubmusd10y?count...
Basically if a longer maturity tbill provides less return than a shorter tbill; financially it makes no sense to choose less money. The prediction suggests people are making decisions, money/mouth, expecting bad things to happen soon.
While yes, there is an inversion. It's between the 3 and 10 year. So I don't expect this predicting disaster this year.