Can the U.S. have hyper-inflation?

Yes, I believe it can but, not for the normal reasons. The other nations that had it didn’t have the world’s reserve currency and the world ending its use as the world’s reserve currency.

It is not the money in circulation here that will cause it. It is the trillions in the world market that will cause it. There was a study that determined the most likely cause of a collapse of the dollar (thus, hyper-inflation) would be a rumor or mistaken reading of a large sale of bonds by a nation. That would cause a chain reaction where each nation tried to sell ahead of the collapse and lose as little as possible.

At the world’s selling, then all the money here would start flowing as people moved to hard assets and sold off bonds and got out of money markets. They would also see higher prices each day in purchases to meet their basic daily needs, especially in food. Since many of our prices for food, imported goods and oil is determined, not by us, but by the world, we would see the nations ending the use of the dollar demanding payment in non-dollar currencies that were not collapsing and several will be when the dollar goes from what I am reading.

The world is making trade deal after trade deal in non-dollar terms. They are not seeking a new global currency, however, but rather, agreeing to accept each others currencies. Any trade deal done in non-dollar terms that use to require dollars reduces the demand for dollars.

Our nation could be in a depression, very little money circulating and unemployment over 20% and yet, bread could be $100 a loaf or a tank of gas $1,000.

Look at how far the dollar fell, when the price of oil was rising to $140 and other raw materials were going through the roof even though we were losing jobs in manufacturing and reducing demand for many raw materials. Then as the stock market bubbles and housing bubble crashed, people fled back to dollars because that is what they had used to buy those bubbles with. But, because they didn’t get back as many dollars the dollar only rose to 89 and oil only fell to the $30’s even though demand fell through the floor.

The reason is that the dollar remained weak and assets didn’t fall as far as they would have had the dollar been strong.

That is a small taste of what we face when the dollar starts falling again. For now, I believe a correction in the markets could drive the dollar up again, but, again, it may stall around the 90 level if it even gets that high. Prices are going to be the inverse of what the dollar is doing and long term, given the dollars spread around the world and the amount of spending coming from our government, we can have at the minimum, very high inflation if not hyper-inflation in the middle of a depression.

Our having the world’s global currency allowed us to “export inflation” but, that same benefit can become the dollar’s curse. Having said that, I hope the experts I have read on this, are wrong.

Related Posts:

• Dollar and it’s rivals
• China will back off buying our debit
• Use the term “devaluation,” not deflation.
• Regarding bull or bear. We may have both. A bull in price and a bear in value.
• This recession is crashing U.S dollar

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