Hyperinflation is inflation that feeds on itself. It has got to the point where inflation begets more inflation and the increase spirals out of control. Just think of the famous image of the German woman burning Deutschemarks because they had more value as heat than as money. That is extreme hyperinflation.
But defined in relative terms, I think the US has already hyperinflated. Just take a look at a recent money supply chart if you can find one. I’ll try to pull one up for you.
I think the US Fed thinks it’s going to “pull back” some of the excess liquidity once the economy is back up, if it ever goes back up. But history shows that rarely happens, and when it does, it has little effect.
Here’s a couple of sources on hyperinflation to check out:
http://hyperinflation-watch.blogspot.com
http://thisishyperinflation.blogspot.com
And a great debate happening over here with the argument that
“Hyperinflation is impossible.”
Check it out and tell me if I’m wrong.
I’m not really worried about US hyperinflation, because that will be easy enough to protect your wealth from. I’m worried about the US forcing the rest of the world to hyperinflate with it.
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The US is by far the largest debtor in the world and just last week Ben Bernanke said he was going to print 1.2 trillion dollars to monetize the some of our debt. The world will soon be looking to sell their dollars, and when they do, the inflation will be upon us.
Global hyperinflation may happen. Japan and UK are printing money like US. If everybody sell UK and US debt the rest of the world end in domino. Hyperinflation is not 20% per year. Is 20% per day. And this finish with all. Economy recovery don’t occur in this scenario, and so US wouldn’t become a country like Mexico, US would become a country like Congo. Anual inflation limit is less than 8-9%. In this scenario, an inflation upper of this can be the trigger to hyperinflation, that begins overnight. Thus Fed would have to print money forever to government pay what it don’t get because tax revenues end. This occurs because “relative prices” among things end with the disorganization of all. The only book about Brazilian Inflation I wrote in 2000 (The Globalization and 30 years of indexation in Brazil – A Globalização e os 30 anos e indexação no Brasil). Inflation in this level like may be happen in US is like pregnancy. If begin, don’t stop more. Indeed the fear is what is blocking for while the worst. In 21th century and in First World big inflation or hyperinflation is anything as if Hitler resuscitate. Big inflation (for US standard) like 10%-20% per year induces hyperinflation automatically. In this scenario would be “END GAME” like Gerald Celent told. Maximum inflation rate in US must stay less than 6% in a year (real inflation). We may see another 1789 revolution if Geithner’s plan fail, and walk to unknown, to anything ever no seen in the history. G-20 summit must work.
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