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Acommmenter on Seeking Alpha Debunked this article here it is as follows:
David Haggith
The article is a total fail.
The fact that the author has "gold" in his name is telling. It's an attempt to sell gold. He's talking his book.
Almost the entire article that claims in its title we already have hyperinflation is really an article about hyperinflation in money supply. We all know we have had that to the tune of trillions of dollars for an entire decade. The author's claim is that, since we have hyperinflation in money supply, it is almost a foregone conclusion we have it in prices (dollar-value loss). It's an article that essentially says, "It is theoretically supposed to happen; therefore, it is happening."
The author, however, does almost nothing to justify any claim of devaluation of money or inflation of prices. We've seen stocks inflate and bond prices, and now we are seeing housing prices inflate. All are assets so not exactly cost-of living, except with housing it becomes both-- a rise in the price of a highly valued asset that is also essential for living.
He mentions some obscure inflation index most of us have probably never heard of as if we should accept it at face value. It's almost irrelevant anyway. Outside of housing, you can quote any inflation gauge you want, and it doesn't matter. Each of us can look to our own lives and say, "How bad is inflation hurting me? Is it worse than any other time in my life." Outside of housing, I do NOT experience that price inflation (dollar value deflation) is hurting me any differently than it has for most of my life. It is nothing compared what I felt during the Nixon years; and even that was far from hyperinflation.
So far.
So, the article is almost click-bait because it does not prove or even present much realistic evidence for the kind of inflation it is talking about that erodes our standard of living -- price inflation / dollar-value deflation. Inflation is always a loss for all of us, so I'd rather not ever have inflation; still, it is so far still percolating along as usual, except in housing right now. (edited)
He can't just use "except for housing" and claim article was wrong, housing is significant monthly expense, it dwarfs other essential bills. Even if you don't own a house the rents will increase to match the housing prices.
Hyperinflation requires a feedback loop through workers, and I see no evidence that most US workers have enough bargaining power to demand higher wages to match. I expect further asset inflation and a continued âkâ shaped divergence.
20 years ago a "six figure salary" meant you were rich, and was exclusively the domain of corporate executives, wall street traders, doctors and lawyers.
10 years ago a "six figure salary" included developers at FAANG companies, mid-level managers and late-career roles in more industries, highly-tenured individuals in government roles.
Today, a "six figure salary" qualifies you for low-income housing in the bay area and is paid as entry-level or mid-career salary to an incredibly wide range of jobs.
Six figures is only low income for certain areas (not the whole bay area), and only for _households_ with _enough children_. For households, two 50k parents is an easy 100k.
I do not believe six figures entry level jobs are common outside the highly trained professional fields, but I don't have data on hand for it.
Seeking Alpha is a site with the worst usage of dark patterns I have seen on the internet, both in it's website design and in it's actual content. This article actually misses a lot of key macro points like that the Fed stopped expanding mzm months ago, and that the expansion of money supply has to reach consumers to become inflationary.
A genuine expansion of the money supply might take time to reach consumers, but it WILL reach consumers. Thought experiment.
A crisis, COVID2029, puts everyone out of work for a year:
1) I print 9 trillion dollars, and allow 300 million recently-unemployed Americans to pay their mortgages during a global crisis. Crisis ends, and everyone goes back to work with 9 trillion new dollars printed. During the crisis, everyone gets a bag of cash, but there's no inflation. Crisis ends. Boom. As soon as everyone's back at work, the inflation kicks in, since there's 9 trillion dollars of new currency in play.
2) I issue zero-interest loans to 300 million recently-unemployed Americans, allowing them to push back their mortgages by one year. I've injected 9 trillion dollars into the economy, but I naturally suck it back out after the crisis. No inflation.
The article makes a great point that velocity of money is a magic fudge factor to make two unbalanced things match up.
However, the huge flaw in using the Chapwood Index is that it claims the US economy is shrinking when the official stats say it is growing. Feel how you may, that is an extraordinary claim and requires stronger evidence than "I have a really professional website" and "it makes sense to me".
I personally think the idea that the M2 growth we're seeing is OK is absurd and I've been very happy with my gold holdings. If it isn't doing a great deal of damage, empires would have been using this tactic to great effect for centuries. But nobody has come up with a watertight case linking monetary recklessness to anything, so it really is still a personal judgement call.
There's a line between hyperinflation (spiraling out of control) and high inflation. My opinion has been and continue to be that to deal with the crisis, we would need to roughly double our money supply, and use that to prevent structural damage during shutdowns.
The alternative would have been to delay all fixed obligations -- loans, mortgages, etc. -- by the duration of the shutdown. No interest accrues for some number of months.
Those both would have required coordinated, thoughtful efforts. Neither of those happened, so hyperinflation is certainly possible at this point, as is economic collapse.
We'll see!
Be on the watch for the people always warning this and selling gold. The true cause for hyperinflation is where the government resorts to seigniorage as taxes and bonds fail to raise money. We haven't seen it at least openly.
Inflation can be desirable and there is not much robust evidence that we have even low level inflation yet. Without strong inflation it will be extremely difficult to deal with the consequences of superheated global commodity markets. Those boomer McMansions are not worth a million plus each, period, so we have to turn the dial down one way or another. Debasing the currency is a terrible way of going about that, but appears to be what we as a society have decided upon.
> Debasing the currency is a terrible way of going about that, but appears to be what we as a society have decided upon.
Why?
It seems the least evil of all possible evils.
the japs are looking for help to produce some inflation...
Once Hedge Funds bought farms... now we are here.