Skip to comments.Senator warns of hyperinflation rivaling the 1980s
Posted on 08/25/2009 12:10:00 PM PDT by Palin Republic
Grassley, speaking about the renomination of Federal Reserve Chairman Ben Bernanke to a second term as head of the Fed, asserted that Bernanke's ability to hold down inflation would be the metric by which the Fed's success would be measured.
"We won't know for a year if he's done a good job so far, because he shoveled money out of an airplane to save banks and the financial system," Grassley said in a conference call with Iowa reporters. "But shoveling money out of an airplane to solve problems can be inflationary in this case, hyperinflationary if he doesn't start mopping up some of the money that's out there."
Grassley, the ranking member of the Senate Finance Committee, said that inflation as a result from government spending on bailouts could result in inflation rivaling rates in 1980, when it hit a peak of 13.5 percent.
(Excerpt) Read more at briefingroom.thehill.com ...
Very good! Give that man a star. :-)
Seriously, I know that you and I disagree on many economic things. We'll see how this plays out and decide who's theories held the most merit.
If it's yours, then I will be happly to congratulate you.
As we are paying $9 for a gallon of milk, $6 for a loaf of bread, $5.69 per gallon of gas AND VERY FEW HAVE JOBS to give a rats ass about healthcare 0bama will get on TV while this is all happening and say it is Bushes fault he inherited it.
The banks and the FOMC are driving the deflationary spiral? How are they doing that?
The Federal government loves inflation.
The big banks put up with inflation for a period of time to build economic bubbles, but then pull credit out from under economies in order to steal the wealth and create more debt slaves.
Debt slaves? Is that what you call a guy who defaults on his mortgage? How do defaulted mortgages help the bank steal the wealth?
Your posts on this thread are too confusing to decipher your "theory".
Do you mind if I ask your background? Interesting.
Agreed with you. I don’t know how accurate it is saying the Fed did a great job last year- there are many I respect who believe there was a huge potential collapse- I’ll await the judgment of history on that. The real question is what the aftereffects are of the “fix”, which we have yet to see.
Sure there was heavy volatility then because the market was trying to find the bottom in the wake of a crash and a socialist President being elected.
But such huge volume is not typical. And we have had far from thin volume lately especially for summer. Just yesterday we had what could be considered a higher volume day.
Uh, we didn’t have hyperinflation in the 70’s or the 80’s. We’ve never had hyperinflation in America. Not that I think it isn’t possible but people need to remember just what hyperinflation is. Hyperinflation is a rate of inflation that is equal to 50% a month or 600% a year.
LOL! That's OK. I'm sure others might be able to make more sense out of them.
Why don't you tell us, in a few paragraphs, where you see the general economy heading over the next six months? I'd honestly like to know your thoughts.
The imminent run on the money markets last Oct. was a very large deal which is what prompted Bernanke-Paulson to act and quickly. That was a scary time.
real question is what the aftereffects are of the fix, which we have yet to see.
I'm a business analyst in the financial arena.
True. But the one thing about hyperinflation is this. If we ever did go into a stage where we emulated Weimar and you had to have a wheelbarrow of $1,000,000 notes to buy bread the one thing it would do is completely end the problems with foreclosure in the country. Not to advocate for hyperinflation or anything, but hyperinflation would be a Godsend for those who are up to their eyeballs in debt and the worst possible thing in the world for those who aren’t in debt and have savings.
I think we'll slowly improve. Unless Obama gets one of his huge government wishes thru Congress. Jobs probably won't be added, net, for another year.
“Inflation in the 80s was bad but it wasn’t, I don’t think, hyperinflation”.
The inflation wasn’t even in the 80s. The inflation was in the 70s, and was pretty much over by ‘83. I remember my first job out of college in 1983, when raise time came all the veterans were complaining. No more 6-10 percent raises like in years past. Only 3 to 5%. From 83 into the 90s, prices basically did not go up.
The Carter inflation, as bad as it was, was not “hyperinflation”
-11nobama needs to destroy the middle class in order to achieve his goals.
Okay Grass Ass. Enough about inflation. Are you going to buckle on Obamacare?
You're optimistic. You may be right, but my bet is that this will be a very slow recovery. I'm betting that we haven't hit bottom yet, not in real terms anyway.
I believe that the secular trend is Asia up, the west down. Schiff and Rogers have it right. Schiff likes to say; think of the world economy as a train. Most people think we're the engine. But we're the caboose.
Asia is going to rule this century. Couple of billion people there and they work hard, produce, and save like misers. We, on the other hand, go into debt and consume. We'll lose the battle unless we turn it around, and I don't see that happening anytime soon.
But while Schiff thinks the east will decouple quickly, my bet is that it will be a slow process. Things this big don't usually change overnight. They'll slowly pull away and leave us with our debt, our entitlement nightmares, our unproductive economy, but it will happen over time. The dollar IS the reserve currency, and there's nothing there to replace it yet. But if you're watching, you know that the Asians are moving away from the dollar as a long term store of value. They ain't stupid.
The dollar will have it's ups and downs, but over time - at least in relation to REAL money (gold) - thanks to the politicians, it will be down. Can't say what'll happen to the dollar in relation to other currencies, since that's all political too. I don't even try to play that game. Anybody who can... bully to you.
I don't even try to trade, I invest. As an investor, I'm completely out of the US market. We're looking to be pretty well hosed for awhile, although I'd love to be proven wrong. Meanwhile, I'm long PMs, Asia, and emerging markets. But unlike Schiff I'm sitting on a pile of dollars because I don't think the dollar is going to drop all that much all that soon. It may even strengthen over the short term. It's important to keep some of the powder dry and let this play out. So many political and unpredictable forces are at play.
Didn’t hyperinfaltion begin in 1978 after the minimum wage was raised twice in one year and then continue into the early 80’s?
Schiff and Rogers were recommending foreign stocks, foreign currencies and commodities last year. IIRC, that wasn't a very good call.
Asia is going to rule this century. Couple of billion people there and they work hard, produce, and save like misers.
The only problem is that whole Commie thing.
But while Schiff thinks the east will decouple quickly
He made (and lost) that bet last year.
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