by Chris Black
Many people are scared by the specter of hyperinflation, but I don’t see it becoming a problem anytime soon.
Allow me to explain:
The current problem (higher prices basically) has much to do with supply chain issues due to the pandemic lockdowns, stuff like China export/manufacturing restrictions (they still play covid) plus, most importantly, higher energy prices which drove up the price of everything, due to Russia sanctions.
Hiking rates in this environment doesn’t do anything to tame inflation (just fucks up the financial markets), because it’s not really a monetary problem but a real world problem, and contrary to general wisdom, the FED cannot print wealth/oil/energy, just zeroes in a computer.
Keep in mind that the FED was doing massive QE/helicopter money and shit like that since 2009 and inflation was never 8%. This is new, post-covid stuff.
Now, since the US is the world’s reserve currency, the US is basically exporting its inflation due to monetary expansion, hence no hyperinflation.
Makes sense?
The real problem, which I think it’s deliberate policy, is that the FED is hiking rates in a recession, sucking up liquidity from the markets and destroying the world’s hyper-financialized economy.
Basically, they are pushing us off the cliff, and they are using the hyperinflation scare as the reason.
Since we live in a democracy, you cannot petition your government with any grievance, because that would be racist and white supremacy, you know, the thing.
Interesting times, not gonna lie…