tisonlyi

The hyperinflation gambit comes in the form of the attempt to re-inflate the economy, no matter the cost.

Think of a set of old fashioned scales, with a weight on one side and an empty bucket with some holes in it on the other.

Trying to re-inflate the economy by pumping out cash is like filling the bucket from a fast flowing hose, aiming to bring the scales into balance. Just.

The Fed are already buying bonds across the curve. This is where hyperinflationary behaviour starts. Bond rates are starting to trickle outwards...

Yes, the position now is a liquidity trap. The attempt to get out of it has already seen the US govt and Fed pump in up from $7.5 to $11 trillion in spending, insurance, guarantees, asset programs, bailouts, etc, etc...

CNBC are very, very conservative in some of their numbers.

If 'the bucket' has too much water in it, then the whole system very quickly tips over towards hyperinflation. Things to look for will be more monetization of govt debt by the fed, a blow out of bond rates, a fall in the dollar, and god knows what else...

And that's just one hyperinflationary scenario... from govt... There are others, just as possible at the moment.

Deflation for now, but beware the 'cure'.

Economics is a social science instead of a natural science for a reason.

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"I do not agree that the dog in a manger has the final right to the manger even though he may have lain there for a very long time. I do not admit that right. I do not admit for instance, that a great wrong has been done to the Red Indians of America or the black people of Australia. I do not admit that a wrong has been done to these people by the fact that a stronger race, a higher-grade race, a more worldly wise race to put it that way, has come in and taken their place." - Winston Churchill, 1937 --{ORLY?}--