> Open letter to Jason Ginger, StudSupreme and James "Krunkme" Howard:

ImperialExecutive wrote:

So what do you foresee happening? It can't be hyperinflation of the US Dollar since that's impossible to achieve. The wealthy are dollar-denominated and they won't let that happen.


Will poorer nations inflate and hyperinflate, undermining their desires to build a native consumerist middle class?

I don't see hyper inflation.  That would take a complete lack of faith in the dollar.  There just isn't a nation with a large and stable enough economy to eclipse us with their own fiat currency. For hyper-inflation to happen IMHO would involve us being in a world war.  There was a time during WWII where dollars were refused and gold demanded instead to pay for imported oil. The sellers were in doubt if we would still be around.  The Federal Reserve Note  in their minds might go the way of Confederate dollars.

I do however see up to double digit inflation like we had right after WWI, in the 50's, and lastly in the 70's till early 80's.  There is just so many dollars sitting overseas or in deposit at banks (some banks are starting to charge fees on these huge deposits instead of paying interest) that if the economy shows strength, we could see a flood of liquidity hitting the street.

This happened in the 1950s when we had huge amounts of dollars printed to pay for WWII. As soon the the economy started to grow, we got hit with high inflation (high considering the fact the dollar was still supposed to be tied to gold) and then the economy would crash back into recession.  That happened multiple times until the early 1960s.  Tax cuts, technological innovation, and a booming population in the early 60s finally put an end to the inflation-bust cycle.