Jack Dorsey says ‘hyperinflation’ will happen soon

[Millionaire]

$100 invested back in 1900 would have turned into $1.2 million approx - adjusted for inflation $315k approx

To say that inflation takes a bite out of things is an understatement.

I think your figures are off.

The US stock market returned about 10% with dividend reinvestment over the last 121 years (since year 1900). That means $100 invested in the stock market would have become $10 million after 121 years (assuming you paid no taxes).

Inflation since 1900 has been 30x in total. So that $10 million your great grand kids would have today, buys about what $300K bought in 1900.

$300K back in 1900 was a lot of money.. The same as $10 million today.

 

[xandman]

$100 turning into $1.2 mill already has inflation baked in. You don't apply inflation twice.

 

[HeSaidSheSaid]

would China ask for trades settled in gold or in yuans in the future?
I think oil is going to hit $100 dollar / barrel.

Kellogg: "The company is offering to raise wages and benefits for the employees by an average of $120,000 a year. Workers, however, are not happy with the offer and said that they deserve more as the plants were fully operational during the peak COVID-19 times" from NASDAQ website.

Deer workers will instantly get a 10% salary increase under the new offer
https://pennsylvanianewstoday.com/d...ary-increase-under-the-new-offer-jobs/258048/

Costco, Amazon and 16 Other Companies That Raised Their Minimum Wage to $15 (or More)
McDonalds
Aetna
Bank of America
Ben & Jerry’s
Best Buy
Charter Communications
Cigna
Costco
Disney World
Facebook
Fifth Third Bank
Google
JPMorgan Chase
Santander Bank
Starbucks
Target
Wayfair
Wells Fargo

 

[piezoe]

Paul tudor jones has said the same thing

He said it's time to double down on inflation hedges...and also that inflation is the biggest danger.

What does this look like on the chart and what does it mean? The last, most euphoric stage / blowoff top, IMO.
View attachment 269937

There is a big difference between inflation, even double digit, and hyperinflation. Inflation yes, a small amount appears to be both practical and politically unavoidable in modern economies that run on fractional reserve banking, but hyperinflation is intolerable. The latter is a symptom of a breakdown somewhere in the economy. Here is something interesting that L.R. Wray wrote in 1998: [underlining is mine.]

In a sense, unemployment results because the government has kept the supply of fiat money too scarce, An increase (through deficit spending) would stimulate the private sector so that it would create more jobs and reduce unemployment. Since the government is the sole supplier of fiat money, and since fiat money is essentially a resource that is potentially unlimited in supply, it makes sense to restrict the supply of fiat money to the extent that this causes unemployment, unless unemployment serves a useful purpose...however, it is important to note that there are no real resource constraints to prevent raising of the deficit until unemployment has been eliminated. Beyond that point, real constraints intervene so that additional deficits will run up against the inflation barrier.

This does not mean that government defcits can only be inflationary when the economy operates beyond full employment. If the tax system breaks down, the governments fiat money can become worthless --- which is manifested as 'hyperinflation'. The government can print ever increasing amounts of money, but find little for sale even as resources sit idle. Clearly, this does not require full employment; indeed, most hyperinflations occur with substantial unemployment. This is not surprising because once the value of the fiat money collapses, it becomes virtually impossible to undertake 'money now for more money later' propositions (which is what most production involves). The only way a complete collapse of the economy can be avoided is if the private sector can contracts in an alternate money with a relatively more stable value... Alternatively, sometimes transactions resort to barter when the domestic currency has lost value. Even in transactions where legal tender is required, private parties can agree to accept domestic fiat money at the current exchange rate with the foreign currency of account.

In any case, the belief that hyperinflations are caused by the government 'printing too much money', running printing presses 'at full speed' captures only the effect, not the cause of the problem. It is usually the breakdown of the tax system, rather than the speed of the printing presses alone, which creates the hyperinflation. While it may be superficially accurate to call this a case of 'too much money chasing too few goods', this does not identify the source of the inflation.*

*L. Randall Wray, "Understanding Modern Money," pg 85, Edward Elgar(1998).

N.B.: To understand Wray's remarks it is necessary to understand the basic relationship between Taxation, government Spending and Deficits. Government Spending is how government created money is put into the economy. Taxation is how money is removed from the economy. Deficits and Surpluses are the differences between Spending and Taxation. Deficits increase, and Surpluses decrease, the amount of money in the economy.

Just to be as clear as I possibly can be, in the short space and time that ET gives us, When we are speaking of government spending and taxation we are speaking of what economists call "outside" or "base" money. There is another kind of money called "inside" or "credit" money that is created by fractional reserve banking, and this "inside money" dominates our economy. "inside" money is created when a bank makes a loan, and it is destroyed when the loan is paid off. Perhaps it is correct to think of "outside" money as the seed money for creation of "inside" money. What we generally refer to as "the money supply" in an economy is dominated by "inside" or "credit" money.​

 

[piezoe]

the $1 trillion infrastructure bill is going to put the inflation in the high gear!

Biden to sign $1 trillion infrastructure bill on Monday
PUBLISHED WED, NOV 10 20214:02 PM ESTUPDATED 3 HOURS AGO

https://www.cnbc.com/2021/11/10/biden-to-sign-1-trillion-infrastructure-bill-on-monday.html

And let's not forget what it will do to the economy, and our children's futures. Can you say "ZOOM."

 

[HeSaidSheSaid]

BEA reported Q3 real GDP is 2%. if the inflation is factored in, does it mean we have negative GDP growth for Q3 2021?
Total value of all crypto currencies is at 2 trillion dollars. I mean we now have 2 trillion dollars more (in addition to amount of money that has been pumped into the US economy) to buy stuff. I wonder how it'd impact on the inflation where supply chain is being bottlenecked.

"Real gross domestic product (GDP) increased at an annual rate of 2.0 percent in the third quarter of 2021 (table 1), according to the "advance" estimate released by the Bureau of Economic Analysis."
https://www.bea.gov/news/2021/gross-domestic-product-3rd-quarter-2021-advance-estimate

 

[Cuddles]

Wait a minute, I thought we were all going to be beyond the tyranny of "fiat" currency and using crypto in no time. And BTC is deflating rapidly, heck, enough BTC to buy you a loaf of bread last year will buy you 4 loaves today. Except for that time in the spring when enough BTC to buy you a loaf of bread one week would only buy you 1/2 a loaf a week later. But anyway, no need to fear inflation, just switch to crypto. Just make sure you're not in any business where you buy inventory to make something you sell later, that probably won't work out for any of those suckers.

but BTC is like 68k$ per though?

 

[Overnight]

but BTC is like 68k$ per though?

Down to 59.x K as of like 4PM EST today, Not sure where it is now. Talk about inflation!

 

[piezoe]

BEA reported Q3 real GDP is 2%. if the inflation is factored in, does it mean we have negative GDP growth for Q3 2021?
Total value of all crypto currencies is at 2 trillion dollars. I mean we now have 2 trillion dollars more (in addition to amount of money that has been pumped into the US economy) to buy stuff. I wonder how it'd impact on the inflation where supply chain is being bottlenecked.

"Real gross domestic product (GDP) increased at an annual rate of 2.0 percent in the third quarter of 2021 (table 1), according to the "advance" estimate released by the Bureau of Economic Analysis."
https://www.bea.gov/news/2021/gross-domestic-product-3rd-quarter-2021-advance-estimate

" 'Real'... GDP" means the GDP figure quoted has already been adjusted to take inflation into account. Generally speaking, GDP is reported as real GDP. But of course when a politician is reporting it, beware. One should always be clear about whether the are reporting "real GDP" or nominal GDP before taking inflation into account.