Hyperinflation

Okay, so our system is broke and all we are doing is pumping trillions of dollars into it. Hyperinflation seems the only logical outcome of this. The question I have is, How long will it take before the dollar is virtually useless? How long before most peoples savings won't even buy them groceries for the week? Is this too extreme of a scenario, or a done deal for the near future?

edit:spelling

[edit on 13-10-2008 by unityemissions]

reply to post by unityemissions


I implore somebody to please provide a good response to this post...we can all speculate, but I really want to hear the response that has economic knowledge to provide a more clear understanding.

I'm getting scared now for sure.

Germany just approved $671 billion bailout.

reply to post by unityemissions


Give it a couple of years. Right now the banks have tighten lending, because they are trying to prevent themselves from going insolvent. Currently the BANKS are not 100% sure which loans are good, and which will continue to go bad. So to prevent more capital losses, they are waiting to see at the same time not willing to lend just yet, so they are sitting on their reserves...for now. (All the new money that has been thrown their way)

The FED will have to raise interest rates heavily in the near future, to prevent all of these reserves from falling into the market, if they want to prevent hyperinflation. Most likely, they will raise interest rates very slowly and it takes time for this new money to trickle down into the economy, so I say within the next four years we may have inflation, coupled with higher and higher interest rates. And also unemployment, in other words; expect stagflation.



[edit on 13-10-2008 by Gateway]

I duno I just paid 45$ for a turkey at safeway in edmonton alberta. I'm pretty sure that it's the most I've ever paid for a bird.

www.abovetopsecret.com...

Yep I was thinking the same thing several months ago. Started this same thread.

I ain't no economist here or anything, but...
the subprime mess and it's fruits seem to have created money out of thin air, which we all have kind of let out into the world by buying goods, ect....
now, this money is proven to be basically a fraud so to speak and it's being wiped off the books.

well, if the world economy has already gotten used to this money being circulated around, and now it's gone....don't see how us creating money to replace what has been lost will cause higher inflation in itself.....the inflation has already been racked up when it was initially created to begin with.

of course, the loss of trustworthiness in the systems, in the currencies would go a long way to causing inflation though.

As the US, France, Germany, England pump out an additional $2+ trillion injected into banks, is this money being created out of nothing or are they borrowing from other countries like China?

Yeah, they tank the market, we go through strong rapid deflation, In an effort to prevent deflation they inject hoards of cash into the economy. Because banks cant lend money to make money to increase the money supply.

The Feds over compensated, then the market jumps back up rapidly....LIKE TODAY....and hopefully not like tomorrow too. That cash in the system will be stuck in the system and the economy will then swing around and we will see strong inflation. It will depend on how fast the feds react. But they created this mess.

reply to post by dawnstar

Originally posted by dawnstar
I ain't no economist here or anything, but...
the subprime mess and it's fruits seem to have created money out of thin air, which we all have kind of let out into the world by buying goods, ect....
now, this money is proven to be basically a fraud so to speak and it's being wiped off the books.

well, if the world economy has already gotten used to this money being circulated around, and now it's gone.

The amount of Physical money actually in real $ notes or coinage is worldwide around 3% of the amount of wealth "written down" on paper.

The money isn't gone anywhere, bits of paper have been given from someone to another, and lots of $ exchanged in the form of 0000's on a computer screen has happened.

The amount of "money" you touch and interact with has been increased, both in terms of Dollars printed, and in terms of ooo's above in bits of paper and computers called Bonds and securities.

The issue is though lots and lots and lots of those OOOO's have been created. To explain but with not the actual answer, supply and demand, scarcity etc, the more common something is, the less it is worth. But it is much much deeper than that!
Anyhow then the cost of everyday and special purchases rises too.

Originally posted by dawnstar
...don't see how us creating money to replace what has been lost will cause higher inflation in itself.....the inflation has already been racked up when it was initially created to begin with.

As above however please look Here

Originally posted by dawnstar
of course, the loss of trustworthiness in the systems, in the currencies would go a long way to causing inflation though.

well the actions the Officials have been forced to take are indeed going to cause that.

I am pretty certain we are going to have no other route now than

At this point, the Fed will find itself between Scylla and Charybdis—between deflation and hyperinflation—it will be forced fast either to take its “classical medicine” by deflating, whereby it raises interest rates, thus inducing a major economic depression, a collapse in real estate, and an implosion in bond, stock, and derivative markets, with a total financial collapse, or alternatively, to take the Weimar way out by inflating, whereby it pegs the long-bond yield, raises the Helicopters and drowns the financial system in liquidity, bailing out numerous LTCMs and hyperinflating the economy.

Krassimir Petrov has received his PhD in economics from the Ohio
State University and currently teaches Macroeconomics, International Finance, and Econometrics

Kind Regards

Elf

with the credit crunch will be less jobs and spending cuts.

everyone will spend less.

supply will outweigh demand.

as the dollar declines the us will have to use more to get goods.

welcome to hyperinflation.

it will happen, it has to.

stock up now before it costs 5x more.

reply to post by perficio7


Timeframe, anyone? I realize the best we can do is speculate, but I'm just looking for a rough idea. Have been trying my best to get my parents to stock up on supplies, but they are in hard-core denial watching fox news every night. It's driving me insane dealing with their overly optimistic perspective.

Originally posted by unityemissions
reply to post by perficio7

 

Timeframe, anyone? I realize the best we can do is speculate, but I'm just looking for a rough idea. Have been trying my best to get my parents to stock up on supplies, but they are in hard-core denial watching fox news every night. It's driving me insane dealing with their overly optimistic perspective.

depends. if shtf and something big happens (terrorist attack etc) then it could happen really soon, as in a couple months...but even if nothing happens i see this happening at least to a small degree by feb-mar of 09. after that it will just get worse and worse.

by summer we will prob be sick of soup and hearing the word depression.