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Page added on September 26, 2010

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How Hyperinflation Will Happen

Business

Right now, we are in the middle of deflation. The Global Depression we are experiencing has squeezed both aggregate demand levels and aggregate asset prices as never before. Since the credit crunch of September 2008, the U.S. and world economies have been slowly circling the deflationary drain.

To counter this, the U.S. government has been running massive deficits, as it seeks to prop up aggregate demand levels by way of fiscal “stimulus” spending—the classic Keynesian move, the same old prescription since donkey’s ears.

But the stimulus, apart from being slow and inefficient, has simply not been enough to offset the fall in consumer spending. For its part, the Federal Reserve has been busy propping up all assets—including Treasuries—by way of “quantitative easing”.

seekingalpha.com



2 Comments on "How Hyperinflation Will Happen"

  1. KenZ300 on Sun, 26th Sep 2010 11:57 pm 

    The recession has reduced the growth in demand for oil and has given us some time to transition to alternative energy sources.

    The question is are we using this time wisely and ramping up our transition to alternative fuels fast enough to offset the coming spike in oil prices?

  2. KenZ300 on Mon, 27th Sep 2010 4:06 am 

    Inflation !

    What will the impact of sky rocketing
    oil prices have on inflation?

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