Hyperinflation isn’t as scary as it sounds. It’s really just a fancy way of saying inflation, and inflation isn’t necessarily bad. However, when inflation gets really high, it becomes problematic.
The government needs more currency in circulation to make up for the extra products or products being sold. It does this by borrowing money from banks, creating money on its own printing press, or taking money from citizens with their cash reserves in their bank accounts.
Hyperinflation is characterized by a rapid increase in the general price level of goods and services. When this happens, it can be very difficult for people to afford basic necessities of life. Goods and services that once cost $1,000 may now cost $2,500. This is largely because the country’s currency becomes rapidly devalued on the global market which causes prices to rise quickly.
How hyperinflation affects you.
First, inflation in the United States was caused by a low supply of money and large amounts of public debt and obligations. These debts and obligations grew and grew, causing hyperinflation. Today, the high inflation in the United States affects you because it makes international exchanges difficult. Companies that trade internationally are negatively affected due to the high prices of goods.
“Hyperinflation” is the situation where the inflation rate gets so high that it has an impact on the purchasing power of money. When the government prints too much money, there are problems such as people trying to exchange their old currency for goods and services before it becomes worthless. This leads to shortages in goods, causing price hikes due to supply and demand rules.
Inflation can be a financial disaster to any person or business. Today’s economy means that the best way to protect against inflation is to invest in assets that grow steadily over time.
Why are Countries Fleeing Dollar-Denominated Debt?
Analyst foresee countries will be fleeing debt denominated in American dollars as the U.S. Dollar is becoming less valuable as this debt becomes more expensive to repay, and a good possible example is China which has been accumulating gold reserves to limit their exposure to the dollar. Countries are beginning to reduce their debts denominated in American dollars because of the growing inflation in the dollar. This is a result of America’s practice over many years of providing capital at low interest rates abroad while allowing its own economy to run hot with high interest rates, thus creating a “global savings glut” with an oversupply of printed money
What’s wrong with the economy and what will happen next?
The US Economy is currently in a state of stagnation, but the government is trying to fix this by making changes in areas such as tax reform and tradeand to pump in a Multi trillion dollar
One of the consequences of this economic stagnation is that the number of people living in poverty has increased. The US Government is trying to take steps to change this including making changes to both trade agreements and tax reform and to boost on infrastructure reform , to rebuild America , all this at the blessing of Senate if they approved the Bill
“The recent rise in the number of COVID-19 cases could hurt the U.S. labor market and lead to higher inflation. With the possibility of the Omicron variant, the worries about the virus could deter people from the labor market, which could slow the economy with further disruptions.”
Despite recent turmoil in the world market, there is no question that the Biden administration has begun to deploy some levers to control inflation. Still, there is a serious charge that the administration’s investment plans aren’t as well thought-out as they have claimed. In particular, the Build Back Better plan still needs to be voted on in the Senate, and while it has passed the House of Representatives, it is not clear whether it will be approved by the Senate yet .
The Republicans have suggest to Yellen, as well as Jerome Powell, by saying that there could be an inflationary impact from the plan. It was obvious to everyone that high inflation wasn’t temporary this time , but acknowledging it was a game changer as the Bill showed possible revamp to the economy
The stock market is currently experiencing a long period of high inflation. In order to protect themselves from this inflation, the market must begin looking for investments that will protect them.And again, you know that the best-performing solution right might be Bitcoin.
Bitcoin’s performance during the COVID-19 pandemic has shown that it is now replacing gold as a store of value. Despite Bitcoin having a market cap that is only 10 times larger than gold, its market share is currently rising, and is expected to overtake gold within the next decade. Bitcoin can become more popular by sticking to a long-term strategy, even if it means not buying now.
It is now apparent that there is a concerted attempt by those who wish to see a return to gold standard based economics to undermine confidence in the Federal Reserve and to replace it with a new independent central bank.
This has, of course, led to calls for the US dollar to be replaced as the world’s reserve currency by a basket of currencies. Such a move would have devastating consequences for American manufacturing and for US to retains its Superpower Status . However, it would be far more serious for the world economy than any temporary deflationary effects.
That being said, we can’t afford to sit idly by and allow inflation to continue, because when inflation hits a critical level, people lose their ability to work. We are at that critical point right now, and it is vital that we take steps to stop it before it’s too late.
Inflation is one of the most dangerous forces in the world today, and it is being carefully managed by the Federal Reserve. However, there are other ways to manipulate the system, and we have seen that recently with Crypto technology
The US Dollar Is In A Massive Global Debt Bubble
I am very concerned that if you are doing nothing with respect to the coming down of the USD and the deleveraging of the world’s banks and investment houses, then you are putting yourself in a precarious situation, because the system might collapse without any more external help , if any things goes wrong with the new infrastructure Bill
So there are going to be problems and I don’t think anyone wants to talk about them, but that doesn’t mean we don’t know what they are.
We do, The world stock market is a barometer of our collective fears. It is one of the best indicators of the level of stress in the system. When the US stock market crashes, the rest of the world will follow. If the US stock market drops by 20%, then you know something bad is happening. If it drops by 40% or 50%, then we are talking about serious problems.
The last major stock market crash of 1987 was caused by people looking to the wrong places for capital and liquidity, and not looking to the right places. The market went down because a lot of people were too optimistic, and over-invested. This was not just an American problem, and this time, it might be many time worst due to many countries are already facing recession
Globalization has made all countries vulnerable to stock market bubbles. We are all now playing with fire. The lesson is that we need to be careful where we invest our money, because a crash can cause huge losses. the stock market bubble will pop again anytime soon .
When it happens, you will know that the world economy is in trouble. When the US stock market crashes, the rest of the world will follow.
The aricle is originally published on Medium on 3 Dec