Will the United States and our politicians learn from the errors made by other countries, or will they allow mismanagement and corruption drag us down?
I’ve written a great deal about the possibility of an economic or societal collapse in the United States’ not-so-distant future, often using Venezuela as an example. Although most of the mainstream media is not covering it, we are witnessing the collapse of another country, mostly because of financial problems. As detailed in this article, that country is Lebanon. Here are a few data points from the article:
Continue reading “As one Country Collapses, Will we Learn a Lesson?”
- Lebanon does not have GDP growth. Instead, its GDP shrank 40 percent from 2018 to 2020.
- Not coincidentally, the jobless rate is also 40 percent.
- They have moved from inflation to hyperinflation
- Because of hyperinflation, their currency (the lira) has deteriorated until minimum wage that previous was worth $450 a month is now worth the equivalent of $35.
- Bank runs led to bank closures which prevent many people from accessing their savings.
- Despite being in the oil-rich Middle East, they are rationing gasoline.
- An estimated 1,200 doctors have left the country and drugs are running out.
- Power outages that last “most of the day” plague the citizens.
Are you prepared for runaway inflation? Is anyone? We discuss what hyperinflation looks like and tactics to survive it.
The Bank of America recently warned of “transient hyperinflation.” That sounds bad, but how bad depends on how you define hyperinflation.
The definition of hyperinflation is “inflation at a high rate,” as “uncontrollable inflation,” or “when prices raise uncontrollably,” all of which are not very precise.
What is hyperinflation? Is it double digit inflation? If so, does it start at 11 percent, or closer to 50 percent? Does 100 percent annual inflation count as hyperinflation? Or do you have to reach absurd levels of annual inflation, like 7,000 percent?
Hyperinflation appears to be like art: Economists know it when they see it. And so will you and I, because with runaway inflation, we won’t be able to afford anything.
Continue reading “What is Hyperinflation and How to Survive it”
The government and the Fed keep telling us that inflation is transitory. Don’t believe them. Some inflation is transitory, but too much of it is not and that will keep prices rising.
I spoke to a smart guy in the financial industry whom I have known for more than 20 years, and I asked him, “Do you think inflation is transitory?” His answer: Yes and no. Some of it probably will be transitory, but some of it definitely is not.
Here’s a boiled down version of his explanation:
Examples of Transitory Inflation
When prices rise because plant closures lead to shortages, because shipping costs escalate or for other reasons that we can expect to be cured in the next year to 18 months, then it is fair to call those transitory. For example, when more microchips reach the market, car and truck production will return to their traditional rates or better, and the number of new cars on dealer lots returns to a reasonable number. If supply and demand is the only reason for the increase in care prices, then car prices will stabilize.
Continue reading “Is Inflation Transitory? Some, Yes, but Most is Not”
I head down the mountain to revisit society and the news isn’t good. Gas is more expensive, food is costly, and the word “hyperinflation” is no longer just used to describe other countries,
I am on the road today, and after spending seven hours in the truck, I don’t think I have an original essay in me and I really need to get some sleep. So, instead I am giving links to important stories and adding a few comments.
The Bank of America’s new Inflation Meter is pointing to transitory hyperinflation, according to this article in ZeroHedge. I have been writing about inflation or months, but this was still a “WTF” moment for me. If we have already moved from inflation into hyperinflation, transitory or not, things are pretty bad. Read their article and if it freaks you out a little, read these recent posts of ours:
Continue reading “Transitory Hyperinflation is Here and More Bad News”