John wrote: Sun Sep 06, 2020 10:43 pm
Pundits have been predicting (hyper)inflation for almost 20 years, and
they've been wrong every time. They never learn. The economy is
still in a deflationary period, with probably many quadrillions
of
dollars
of interlocking debt outstanding. A financial crisis will
make all
of those quadrillions
of dollars go poof, and cash will be
scarce as hen's teeth, meaning extreme deflation.
There is no limit to the number
of quadrillions the Fed can print. They really want to fight deflation. They have the power to fight deflation. They have started with a few trillion to double the money supply. There is a finite amount
of deflationary pressure and an infinite supply
of money at the Fed. The Fed will eventually "win". Don't fight the Fed. From the chart on dollar purchasing power that Higgy just posted, it is clear in the long run the Fed is able to reduce the value
of the dollar and get inflation. Remember, gold used to be $20/oz and is now about 100 times that. The hard question is just when and how badly they will win. Inflation is hard to time, but a 30 year bond at 1.5% is bound to do worse than gold over the next 30 years. I am sure
of that.
