Great info as always. I must admit though that heavy inflation in the future is a definate possibility with trillions of dollars of new "money" printed with no backing. I see possibly deflation followed by inflation possibly followed by hyperinflation. Don't forget that the dollar has lost 97% of it's value to inflation since 1913.
Thanks for your comment. Losing 97% of it's value in almost 100 years means the dollar is a very stable currency. If the dollar lost 97% of its value in 95 years, this means there was about 3.6% inflation per year. Hyperinflation means 50% or more inflation PER MONTH. With 50% inflation per month, a currency loses 99.98% of its value WITHIN A YEAR.
Too bad we don't' have a currency backed by metals, or a mix of other valuable commodities. The inflation rate would be close to zero. I read a story about a contractor that found $185,000 in a wall of a house that was put there by a tycoon during the depression. The original value compared to todays dollars is $2,277,575.19. The only thing that makes me doubt a quick recovery is a 70% consumer based economy. What can we produce now that the world will buy to ignite our economy?
Of course retailers will reduce prices to raise cash - deflation for sure. However, I can asure you they will not be able to fill up their inventory again with reduced merchandise from their suppliers ! In China we reduce production for consumer goods ( being exported ) faster than shops are closing in the US or elsewhere. The only production increase I can see at the moment is the printing press - inflation to solve debt seems unavoidable !
Great info as always. I must admit though that heavy inflation in the future is a definate possibility with trillions of dollars of new "money" printed with no backing. I see possibly deflation followed by inflation possibly followed by hyperinflation. Don't forget that the dollar has lost 97% of it's value to inflation since 1913.
fishingthewatershed 3 years ago
Thanks for your comment. Losing 97% of it's value in almost 100 years means the dollar is a very stable currency. If the dollar lost 97% of its value in 95 years, this means there was about 3.6% inflation per year. Hyperinflation means 50% or more inflation PER MONTH. With 50% inflation per month, a currency loses 99.98% of its value WITHIN A YEAR.
ubseconomics 3 years ago
Too bad we don't' have a currency backed by metals, or a mix of other valuable commodities. The inflation rate would be close to zero. I read a story about a contractor that found $185,000 in a wall of a house that was put there by a tycoon during the depression. The original value compared to todays dollars is $2,277,575.19. The only thing that makes me doubt a quick recovery is a 70% consumer based economy. What can we produce now that the world will buy to ignite our economy?
fishingthewatershed 3 years ago
Of course retailers will reduce prices to raise cash - deflation for sure. However, I can asure you they will not be able to fill up their inventory again with reduced merchandise from their suppliers ! In China we reduce production for consumer goods ( being exported ) faster than shops are closing in the US or elsewhere. The only production increase I can see at the moment is the printing press - inflation to solve debt seems unavoidable !
kalatuppi 3 years ago