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Signs Hyperinflation Is Arriving

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Signs Hyperinflation Is Arriving - by Gonzalo Lira

Back in late August, I argued that hyperinflation would be triggered by a run on Treasury bonds. I described how such a run might happen, and argued that if Treasuries were no longer considered safe, then commodities would become the store of value. - article continues at golzalo lira blog

His conclusions:

Therefore, I am confident in predicting the following sequence of events:

• By March of 2011, once higher commodity prices reach the marketplace, monthly CPI will be at an annualized rate of not less than 5%.

• By July of 2011, annualized CPI will be no less than 8% annualized.

• By October of 2011, annualized CPI will have crossed 10%.

• By March of 2012, annualized CPI will cross the hyperinflationary tipping point of 15%.

After that, CPI will rapidly increase, much like it did in 1980. 2012 will be the bad year: I predict that hyperinflation’s tipping point will be no later than the first quarter of 2012. From there, it will accelerate. By the end of 2012, I would not be surprised if the CPI for the year averaged 30%.

Full article at - http://gonzalolira.blogspot.com/2010/10/signs-hyperinflation-is-arriving.html

Edited by Errol

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However, I am no longer certain if there will ever be such a panic in Treasuries.

He made the rest up didn't he.

Even his ludicrous name I imagine. :D

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Signs Hyperinflation Is Arriving - by Gonzalo Lira

Back in late August, I argued that hyperinflation would be triggered by a run on Treasury bonds. I described how such a run might happen, and argued that if Treasuries were no longer considered safe, then commodities would become the store of value. - article continues at golzalo lira blog

His conclusions:

Therefore, I am confident in predicting the following sequence of events:

• By March of 2011, once higher commodity prices reach the marketplace, monthly CPI will be at an annualized rate of not less than 5%.

• By July of 2011, annualized CPI will be no less than 8% annualized.

• By October of 2011, annualized CPI will have crossed 10%.

• By March of 2012, annualized CPI will cross the hyperinflationary tipping point of 15%.

After that, CPI will rapidly increase, much like it did in 1980. 2012 will be the bad year: I predict that hyperinflation’s tipping point will be no later than the first quarter of 2012. From there, it will accelerate. By the end of 2012, I would not be surprised if the CPI for the year averaged 30%.

Full article at - http://gonzalolira.blogspot.com/2010/10/signs-hyperinflation-is-arriving.html

for all this hyperwiperinflationation we still perplexingly seem to be stuck below 2007 (somewhat different to the 70s, still im sure theres a good reason and we're off to hyperwiperinflatianation),

PPIACO_Max_630_378.png

Edited by Tamara De Lempicka

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for all this hyperwiperinflationation we still perplexingly seem to be stuck below 2007 (somewhat different to the 70s, still im sure theres a good reason and we're off to hyperwiperinflatianation),

PPIACO_Max_630_378.png

Can you do a log chart of that?;) -

doesn't look much like deflation either let the trend be your friend.

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Can you do a log chart of that?;) -

doesn't look much like deflation either let the trend be your friend.

youre right of course, the trend is up, but all bull and bear markets are prone to 60% countertrend corrections and its going to be a bit difficult to hyperinflate whilst it remains below 2007

[id]=PPIACO&log_scales=Left"]log

Edited by Tamara De Lempicka

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youre right of course, the trend is up, but all bull and bear markets are prone to 60% countertrend corrections and its going to be a bit difficult to hyperinflate whilst it remains below 2007

log

Yes, I can see why you chose not to use the log.

You always get deflation just before hyperinflation.

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Yes, I can see why you chose not to use the log.

You always get deflation just before hyperinflation.

the main reason for not using log is it wont link the address, the charts are the same, an identical percentage below 2007,

the opening post highlights clear hyperflationary signs, fair enough say that at new highs but theres fck all hyperflationary about lower commodity prices than 3 years ago

Edited by Tamara De Lempicka

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the main reason for not using log is it wont link the address, the charts are the same, an identical percentage below 2007,

the opening post highlights clear hyperflationary signs, fair enough say that at new highs but theres fck all hyperflationary about lower commodity prices than 3 years ago

You are impatient aren't you!

Some of the metals seem to be doing ok though.

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Where will (hyper-)inflation rear its ugly head first? Where will we witness the first inflationary calamity? Here a few contenders in my chosen order:

1. Saudi Arabia

2. China

3. Japan

4. UK

5. USA

6. EURO zone

IMHO, the West will fall after Japan, as the nitwits always cry "but look at Japan" when they want to prove that arbitrary amounts of money can be printed without endangering the currency. Japan going hyper will break their psyche.

EDIT: Oh, and whatever happened to Gonzalo Lira!?

Edited by Silverfinger

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Where will (hyper-)inflation rear its ugly head first? Where will we witness the first inflationary calamity? Here a few contenders in my chosen order:

1. Saudi Arabia

2. China

3. Japan

4. UK

5. USA

6. EURO zone

IMHO, the West will fall after Japan, as the nitwits always cry "but look at Japan" when they want to prove that arbitrary amounts of money can be printed without endangering the currency. Japan going hyper will break their psyche.

EDIT: Oh, and whatever happened to Gonzalo Lira!?

1) Venezuela (some might say already happened

2) South Africa (currency been weakening for quite a while)

3) Brazil

I started to read the excellent book "when money destroys nations", about Zimbabwean inflation (have not yet finished it).

One interesting thing is how far back the author placed the root of hyperinflation (it was about 10 years before the results we saw on our TV screens)

Edited by reddog

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We're still in the throes of a credit/debt hyperinflation, the UK especially. The world's central banks have spent the last seven years trying to prevent it from unwinding catastrophically but with little success. Wealth is yet again being destroyed at a faster rate than it can be created. Those holding leveraged financial assets are in the process of being wiped out.

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Hooray. !!!!

If it turns out to be true. Although 7 years later than it should have started.

The over leveraged have been propped up far too long imo.

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bit impossible to guess. Could be a huge deflationary period followed by more stimulus which leads to hyperinflation.

will certainly find out soon

Edited by jiltedjen

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It can be seen from the OP that many people in the past have predicted HI in the US or elsewhere in Europe. Apparently they were wrong or at least had the wrong time horizon. But I think a few things have changed recently, that make inflationary calamities in some of my contender countries more likely:

- ZIRP seems to be here for good. The economies now need ZIRP to function and plan with ZIRP. There will be no rate hikes to fight inflation, since immediate economic collapse would follow.

- The debt burden has exploded since 2008/2011.

- Oil is so cheap, that any price reversal (which must come) will act as an inflation shock.

- China is collapsing in time lapse, and maybe won't be able to suck up all those U.S. or other Western bonds anymore.

It is still a very slow process, but it does not look good. Given ultra low oil prices and what the nitwits call a deflationary collapse, we should be seeing everything half price. We don't, which should give reason for great concern.

Edited by Silverfinger

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Yes, The ECB Chief Economist Really Said It: "If You Print Enough Money, You Always Get Inflation. Always."

peter%20praet.jpg

And with that we can finally close the book on slippery central bank semantics on what precisely it is that they do, and what it is they plan to achieve.

I say: Exactly!

Edited by Silverfinger

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Printing money may well create inflation.....but hyper inflation creates defaults and non payment of debt and rent. We also now live in a global world, can the whole world go Weimar together in this day and age? ;)

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Printing money may well create inflation.....but hyper inflation creates defaults and non payment of debt and rent. We also now live in a global world, can the whole world go Weimar together in this day and age? ;)

Globalization could be one reason why the process would potentially be very slow. Also, strong inflation makes the debt burden more manageable, akin to paying the mortgage back with the equivalent of an apple and an egg (happened during Weimar, right?).

Edited by Silverfinger

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Globalization could be one reason why the process would potentially be very slow. Also, strong inflation makes the debt burden more manageable, akin to paying the mortgage back with the equivalent of an apple and an egg (happened during Weimar, right?).

So that you must be expecting hyper inflation of wages as well as prices.....we do not live in utopia you know, even though it would be TPTB finest scenario. ;)

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So that you must be expecting hyper inflation of wages as well as prices.....we do not live in utopia you know, even though it would be TPTB finest scenario. ;)

So, I have a 25-year fixed repayment mortgage at $1,000/month. I am a state employee earning an income that easily affords that. Now hyperinflation comes. The state will (has to) take care of me, my nominal income won't go down (after all, the state essentially just prints it), even if I live on food stamps. An apple costs now $1,000. No wage inflation needed.

Edited by Silverfinger

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So, I have a 25-year fixed repayment mortgage at $1,000/month. I am a state employee earning an income that easily affords that. Now hyperinflation comes. The state will (has to) take care of me, my nominal income won't go down (after all, the state essentially just prints it), even if I live on food stamps. An apple costs now $1,000. No wage inflation needed.

So tell me why the doctors are striking, departments are being sized down, money is not being spent on urgent infrastructure including flood defences and housing....why final salary state pensions are not so widely available......they have been printing for years, but still borrowing......what about private firms....ask tesco if they are paying the living wage to their lowest paid.......thousands are self-employed, see them paying themselves hyper inflation pay rises. ;)

Edit:.....the state is trying its best to reduce dependency on top-ups not increasing them.

Edited by winkie

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