US Hyperinflation Is A MythSubmitted by Diamond Dog on Thu, 10/25/2012 - 23:42
It's time we do away with the notion behind the incessant flow of stories and warnings about upcoming hyperinflation in the US. It can't and therefore won't happen, at least not for years into the future. It would be a lot more constructive - and necessary - to focus on the reality we see before us than on such a purely mythological tale. Because that's all it is. Bubbles, and yes, that includes credit bubbles, have their own internal dynamics: they MUST pop when they reach critical mass.
Trying to prevent the pop, or even increase that mass, is futile. And even though that may be more about physics than about finance, why it is so hard to understand is beyond me. The deleveraging, a.k.a. debt deflation, has hardly begun, and it for now remains largely hidden behind a veil of QEs. That doesn't negate the fact that ultimately QE is powerless to stop it, even as it sure manages to fool a lot of people into thinking it can.
But don't take my word for it. You could start with - even - the IMF saying European banks will need to sell $4.5 trillion in assets through 2013. And then try to explain how that could possibly link to hyperinflation. For now: never mind.