What is Hyper-Inflation and how does it effect a country's economy?
I’m sure you’ve heard the term inflation or hyper inflation floating around lately. But what does it really mean? Is it happening here in the United States? I think we’ve seen prices rise a bit. But are we headed towards a Zimbabwe or Venezuela situation?
Is it possible for the US dollar to become so inflated that one day when you go to pay for a cup of coffee it’ll cost you $200 bucks? With everything that has been happening in the world this past year. I wouldn’t put anything passed the realm of possibility.
A man in Zimbabwe
removing piles of money form the streets because it is worth nothing. He’s not transporting it to a bank. It is going to be burned.
Here is an actual headline recently put out from our friends over at Bloomberg.
"Tune Out the Hyperinflation Hype. It’s Just Meme Economics.”
My first response to the title of this piece is that they are trying to downplay the severity of where the dollar is headed. But have you ever asked yourself what is really backing our greenbacks. I challenge you with this. Go out and ask 10 people what is backing the US dollar. I bet you most of them still believe that it is gold.
Ok so obviously gold isn’t back it anymore. If that is news to you I invite you to do some more research on the matter on your own. Here’s another fun fact did you know that more and more countries are moving away from the dollar every year encouraging bi-lateral trading bewtween other countries that don’t want to transact in and out of our buckaroos! You’re not going to hear that in the news.
So what is the hell is going on?
Let’s rewind and go over then actual definition of inflation.
Inflation is a general increase in prices and fall in the purchasing value of money.
Now I don’t know about you but that seems a lot more horrible in real life than it does on paper. With that said is this what you are currently experiencing? I’m sure we are all paying more money for gas and groceries right? Are you able to get by? I suppose this is relative to your situation.
Here’s some information that most people either don’t realize or have never thought about it before because it is just one of those things that slip by. Hopefully this makes you angry.
Why? Because it should.
Inflation hits the poorest people in our country the hardest. I’m talking about family households that on average earn only $12 - $15k on an annual basis. Think about it this way. If you to have to pay an extra few dollars here and there for gas or groceries in the short term it really isn’t going to effect you all that much.
But if you are in that category of earning let’s say $12k a year. Those few dollars here and there over a long period of time can become hundreds or even thousands of dollars annually. Even if you were making the median salary of a single person in the US - I found it to be about $35k a year - before taxes of course. An period of inflation lasting 1-2 years can greatly affect you.
By this I don’t mean you won’t be able to hit the gym or miss out on that new purse. I’m talking about people not being able to pay their rent or mortgage. Missing their car notes and not being able to put food on their table for themselves or their loved ones.
This is the reality we are dealing with that goes unseen and unheard. You have current members of our presidential administration chalking up this situation to the pandemic or pent up demand from consumers.
Both of which I believe to be total BS. Now this isn’t a political website and I won’t delve into that when writing. I’m only reiterating what has transpired and my feelings towards the current events unfolding. What is being done about this? Why does the Fed continue to print more and more money? Is there an end game?
It is a sad and unfortunate situation and one you could not imagine getting any worse. But sadly I do believe it will get worse before it gets better.
Don’t forget about that headline Bloomberg put out that I Mentioned at the beginning of this piece. That is what they want you to believe. They write it off as trivial and blown out of proportion. It is disgusting and immoral. It goes against everything that this country stands for even though it seems as if right now she is laying down.
In closing.
No one has a crystal ball and if our current government isn’t protecting us it is our responsibility as individuals to safeguard ourselves. To protect ourselves financially by becoming literate in investing, credit, and basic money concepts and it’s application. You have to start somewhere and sometime.
Start today.
Jk
““Inflation is not caused by the actions of private citizens, but by the government: by an artificial expansion of the money supply required to support deficit spending. No private embezzlers or bank robbers in history have ever plundered people’s savings on a scale comparable to the plunder perpetrated by the fiscal policies of governments.””
