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Why not? Is there something that makes the US immune? Also, people fixate on the "hyper" part and assume the US is going to go full Zimbabwe/Venezuela where a

Why not? Is there something that makes the US immune? Also, people fixate on the "hyper" part and assume the US is going to go full Zimbabwe/Venezuela where an egg costs a trillion dollars, but even sustained non-hyper inflation of 10% or 20%/year would wreak havoc on most people's retirement funds or mortgages.

XorNot 6y ago
The highest rate of inflation the US ever hit was in the 1980 (https://www.usinflationcalculator.com/inflation/historical-inflation-rates/ https://www.usinflationcalculator.com/inflation/historical-i...) at 13%. The world did not end, and the rate was not sustained. This time period corresponds to high interest rates because it has to, but the value of loans was depreciating rapidly. Since then the Federal reserve has had a target inflation rate of 2% over time and if you look at the data they've hit it. So yes, the US has substantial protections against uncontrolled changes in the inflation rate - that's the Federal Reserves mission statement.
- bdefore 6y ago
  The rate was not sustained because the books have been cooked. How the US measures has been periodically tweaked to keep the 2% story going. Using the early 1980's metric of inflation we've been at roughly 10% annually since the turn of the millennium: http://www.shadowstats.com/alternate_data/inflation-charts http://www.shadowstats.com/alternate_data/inflation-charts
martinald 6y ago
Wouldn't it be "good" for people's mortgages, especially if they've got a long term fixed rate?
chii 6y ago
Inflation only happens if the production cannot keep up with demand. I believe that the US's productive capacity is very high, and have a huge slack (due to heavy mechanisation and automation). If demand grows, production can keep up - and thus, no inflation. Countries that import most of their supply (like in venezuela) cannot have slack in their production, and thus you see high inflation in times of high demand and low supply.

XorNot 6y ago

The highest rate of inflation the US ever hit was in the 1980 (https://www.usinflationcalculator.com/inflation/historical-inflation-rates/ https://www.usinflationcalculator.com/inflation/historical-i...) at 13%. The world did not end, and the rate was not sustained. This time period corresponds to high interest rates because it has to, but the value of loans was depreciating rapidly. Since then the Federal reserve has had a target inflation rate of 2% over time and if you look at the data they've hit it. So yes, the US has substantial protections against uncontrolled changes in the inflation rate - that's the Federal Reserves mission statement.

bdefore 6y ago
The rate was not sustained because the books have been cooked. How the US measures has been periodically tweaked to keep the 2% story going. Using the early 1980's metric of inflation we've been at roughly 10% annually since the turn of the millennium: http://www.shadowstats.com/alternate_data/inflation-charts http://www.shadowstats.com/alternate_data/inflation-charts

martinald 6y ago

Wouldn't it be "good" for people's mortgages, especially if they've got a long term fixed rate?

chii 6y ago

Inflation only happens if the production cannot keep up with demand. I believe that the US's productive capacity is very high, and have a huge slack (due to heavy mechanisation and automation). If demand grows, production can keep up - and thus, no inflation. Countries that import most of their supply (like in venezuela) cannot have slack in their production, and thus you see high inflation in times of high demand and low supply.