There will be no hyperinflation, despite all this printing. you have no idea how many real estates are empty all over the world. how much computers, phones, cars, clothing, gas, coal, oil, energy, home equipment the world (mostly china) can produce. MUCH more than all the worlds people could consume. so huge is the enhancement in technology. without new taxes and buying on credit, the prices will FALL. with u.s. and europe buying less, the producers and sellers will have to cut prices... great times for anyone who have savings - more buying power (chinese, japanese, russian). bad times for those who have debts. interest rates are sure to skyrocket. can't wait to see more american cities with homes priced at $1, like detroit
How is that possible with our currency being devalued by excessive printing? Commodity inflation will continue while the value is sucked from our savings.
the dollar is only devalued against gold and chf. these are not things you can consume. these two rise against USD for two reasons: - liquidity (thats why real estate prices fall, very poor liquidity!!) - scarcity all things which can be manufactured or produced in automated factories have virtually unlimited supply. in the middle east, asia, africa there are so many people who have no skills, no wealth, nothing. they will sell you everything (chinese production) with ultra low margins, just to have something to eat. levis jeans cost 1.5 usd to produce. barrel of oil costs 2 dollars to produce from arab soil. there is more home space in usa and europe than citizens could possible occupy. there is no purpose in buying more real estate. poor people have no money/credit. rich people already own 15 homes.
there is no free market in a bridge business. the city or whoever charges for this, could easily rise it to $120. my estimation shows, the inflation adjusted cost of international flights dropped by some 50-70% in the last 10-15 years. nyc bridges, ny metro: people have no choice, they must use them.
I've got no real dog in this debate, but I would add that the verdict is still out on whether this commodity inflation wasn't really just the "herd" gunning risk assets with ZIRP and Bernanke broadcasting via his loudspeaker that he welcomes inflation and would keep rates "artificially low", basically forever. Remember, the lead up to the biggest bust in crude oil prices in 2007-08 followed on the backs of very similar herd instincts.
Research the velocity of money. When it stays consistently below 1 the Fed could pump a gazillion dollars into the economy and it would have absolutely no effect other than making the banking system much, much richer.
yeah yeah yeah..it's all good..you are smart ...kudos and all that...you forgot something else...oil..and how it's related to everything else..price of milk is up 30-50% for year...and it's not based on gold or chf.. not claiming to be genius in even basic economics..just an observations of everyday consumer..
To repeat, it's exactly what was happening in 2007-08. Except that this time, we've already exhausted the bag of tricks to get us back to these upper limits of what the Fed is willing to allow in so far as commodity inflation/oil prices, etc... The policy of weakening the dollar to boost asset prices has been played several times at this juncture. I'm sure that all of the supporters of this policy would be simply giddy if they could target the asset inflation (i.e. what they consider "good" asset inflation vs "bad" side effect inflation), but it just never works that way.
I'll take the other side of this argument. We now have millions upon millions of new wana be middle class. Who can now jump on the internet and see the good life. Have you seen some of the earnings from multinationals? China India Brazil. They all want a washer dryer, a car, barbecue. A better life. They have money and are spending it, not saving it. Have you looked at inflation in China? The world is hungry and they are going to tear through resources and these corporations are going bank. They are going to make more money than they ever have. Now there is a caveat of course to even my rosey argument. If they can't fix the financial system in the old world it will put a downer on things. But these corps are primed and ready to go. The world wants what they have, these people wana eat spend and live. And there is an asston of them. Now for the american average joe, this could be troubling times if we don't get to innovating and stop China practices. But corporations don't care, they are about to bank. And resources? Good luck. Food, oil, metals, rare earth. Up and away. Any respite because of financial liquidity issues is only temporary.