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> A big part of what happened in Zimbabwe, by the way, was that land reforms caused a massive collapse in food production (a major part of their economy) and un

> A big part of what happened in Zimbabwe, by the way, was that land reforms caused a massive collapse in food production (a major part of their economy) and unemployment skyrocketed. They spent a lot in response Okay. Fed officials are predicting 30% unemployment, and we're seeing a massive collapse in goods and services production (not food, but it may as well be in a 70% services based economy) as cities go into lockdown. To respond to this, we intend to spend a lot. I'm a bit confused as to how the current situation doesn't mirror, nearly perfectly, the Zimbabwe example. We are literally printing and spending into a severe supply (yes, services follow supply curves just as much as goods do) and unemployment shock.

sykick 7y ago
Here is why the situation in the U.S. does not nearly perfectly mirror Zimbabwe. One word: confidence. People have far more confidence in the dollar than they do Zimbabwe's currency. As the global financial system is currently setup losing confidence in the dollar is highly unlikely. You might lose confidence in the dollar and buy gold and I might do the same but we aren't the people whose confidence the dollar's value relies upon. I'm not an economist but as far as I understand these things we won't get hyperinflation as long as there is confidence in the dollar as a currency.
vonmoltke 7y ago
> Fed officials are predicting 30% unemployment One official said it may happen: https://www.bloomberg.com/news/articles/2020-03-22/fed-s-bullard-says-u-s-jobless-rate-may-soar-to-30-in-2q https://www.bloomberg.com/news/articles/2020-03-22/fed-s-bul...