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Sub 10% per annum inflation is hardly a crisis. Note that traditionally hyper inflation (which people often seem to conflate with our current status) is define

Sub 10% per annum inflation is hardly a crisis. Note that traditionally hyper inflation (which people often seem to conflate with our current status) is defined by economists to be 50% per month. The west is a long, long way from any sort of real crisis caused by inflation.

cableshaft 5y ago
That's the thing when you deal with exponents. Everything seems low until suddenly it isn't anymore. That's part of the reason why we handled the Covid pandemic so badly also, humans tend to be shit at exponential thinking[1][2]. Hyperinflation tends to work in an exponential fashion. Perhaps we aren't at the bottom of an exponential curve for this period of inflation, perhaps it can be prevented from going too high like it has in the past for the US (I still want to believe that's the case, but I'm converting my fiat into assets just in case that's wrong). But it's far from a guarantee. There's many countries suffering from hyperinflation out there in the world today that probably acted similarly when they were at the same stage as we are right now. [1]: https://thetyee.ca/Analysis/2020/07/16/Exponential-Growth-Proving-Lethal/ https://thetyee.ca/Analysis/2020/07/16/Exponential-Growth-Pr... [2]: https://purposefocuscommitment.medium.com/the-rice-and-the-chess-board-story-the-power-of-exponential-growth-b1f7bd70aaca https://purposefocuscommitment.medium.com/the-rice-and-the-c...
- wbsss4412 5y ago
  There is nothing less exponential about a 2% inflation target than there is about a 5% rate or even a 10% rate of inflation. All discussions about inflation are exponential in nature. The differences between 2,5,10 percent per annum vs almost 13000% inflation per annum are just categorically different, and you don’t get there by accident.
  - cableshaft 5y ago
    I never claimed we are getting there by accident. There's plenty of unprecedented shit the past couple of years coupled with policy decisions that have accumulated over time that's put us in a potentially precarious position. And sure, they're a different category (as I said, the US has had high inflation but not hyperinflation in the past and we've recovered from it, like in the 70s). But just because the US hasn't shifted from one category to the other in the past, doesn't mean it couldn't this time. You are right about all inflation itself being exponential, but I think you mean prices, whereas I'm talking about the percentages. You can't be talking about percentages because you're saying it's only going up 2, 5, 10% at the most (roughly). Just take Venezuela. In less than 2 years (from 2018 to 2019), their inflation percentage jumped from 9% to 10,000,000%. I.e. they went from your first category to an exponential increase in the inflation percentage. It can happen very quickly once the ball gets rolling enough. https://www.cnbc.com/2019/08/02/venezuela-inflation-at-10-million-percent-its-time-for-shock-therapy.html https://www.cnbc.com/2019/08/02/venezuela-inflation-at-10-mi...
    - wbsss4412 5y ago
      Plenty of things are possible, but just because something could happen, does not mean that it is likely. The west is not on the brink of runaway inflation by any means. It wasn’t in the 1970s either. Hyperinflation has historically only occurred under very specific circumstances, typically after widespread devastation due to war or outright government collapse. Edit: to add a response to the case of Venezuela, the 9% inflation rate had nothing to do with the ensuing hyperinflation. It’s not as if people’s expectations got out of control. They relied heavily on oil exports and oil production collapsed due to state mismanagement. They could’ve had 0% inflation to begin with and still would have been in this situation.
      - cableshaft 5y ago
        I don't even think it's that likely myself, although if I had to pick a percentage chance of it happening in the next five years I suspect would be much higher than yours (if I had to give a number today, I'd give it a 7% chance). Great Britain I'd peg a bit higher, around a 12% chance, based on some articles I've been reading about their Brexit and supply chain issues.
        wbsss4412 5y ago
        Do you really believe there is a 1 in 6 chance the UK sees hyperinflation? They aren’t even at their 20th century high point yet, and even then they didn’t crack 30% per annum. [1] [1] https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/czbh/mm23 https://www.ons.gov.uk/economy/inflationandpriceindices/time...
- imtringued 5y ago
  No, most countries suffering from hyperinflation either got bombed, hit by massive sanctions on their primary industry or intentionally shut down their agriculture industry. Yes, I am talking about the Weimar Republic, Venezuela and Zimbabwe.

cableshaft 5y ago

That's the thing when you deal with exponents. Everything seems low until suddenly it isn't anymore. That's part of the reason why we handled the Covid pandemic so badly also, humans tend to be shit at exponential thinking[1][2]. Hyperinflation tends to work in an exponential fashion. Perhaps we aren't at the bottom of an exponential curve for this period of inflation, perhaps it can be prevented from going too high like it has in the past for the US (I still want to believe that's the case, but I'm converting my fiat into assets just in case that's wrong). But it's far from a guarantee. There's many countries suffering from hyperinflation out there in the world today that probably acted similarly when they were at the same stage as we are right now. [1]: https://thetyee.ca/Analysis/2020/07/16/Exponential-Growth-Proving-Lethal/ https://thetyee.ca/Analysis/2020/07/16/Exponential-Growth-Pr... [2]: https://purposefocuscommitment.medium.com/the-rice-and-the-chess-board-story-the-power-of-exponential-growth-b1f7bd70aaca https://purposefocuscommitment.medium.com/the-rice-and-the-c...

wbsss4412 5y ago
There is nothing less exponential about a 2% inflation target than there is about a 5% rate or even a 10% rate of inflation. All discussions about inflation are exponential in nature. The differences between 2,5,10 percent per annum vs almost 13000% inflation per annum are just categorically different, and you don’t get there by accident.
- cableshaft 5y ago
  I never claimed we are getting there by accident. There's plenty of unprecedented shit the past couple of years coupled with policy decisions that have accumulated over time that's put us in a potentially precarious position. And sure, they're a different category (as I said, the US has had high inflation but not hyperinflation in the past and we've recovered from it, like in the 70s). But just because the US hasn't shifted from one category to the other in the past, doesn't mean it couldn't this time. You are right about all inflation itself being exponential, but I think you mean prices, whereas I'm talking about the percentages. You can't be talking about percentages because you're saying it's only going up 2, 5, 10% at the most (roughly). Just take Venezuela. In less than 2 years (from 2018 to 2019), their inflation percentage jumped from 9% to 10,000,000%. I.e. they went from your first category to an exponential increase in the inflation percentage. It can happen very quickly once the ball gets rolling enough. https://www.cnbc.com/2019/08/02/venezuela-inflation-at-10-million-percent-its-time-for-shock-therapy.html https://www.cnbc.com/2019/08/02/venezuela-inflation-at-10-mi...
  - wbsss4412 5y ago
    Plenty of things are possible, but just because something could happen, does not mean that it is likely. The west is not on the brink of runaway inflation by any means. It wasn’t in the 1970s either. Hyperinflation has historically only occurred under very specific circumstances, typically after widespread devastation due to war or outright government collapse. Edit: to add a response to the case of Venezuela, the 9% inflation rate had nothing to do with the ensuing hyperinflation. It’s not as if people’s expectations got out of control. They relied heavily on oil exports and oil production collapsed due to state mismanagement. They could’ve had 0% inflation to begin with and still would have been in this situation.
    - cableshaft 5y ago
      I don't even think it's that likely myself, although if I had to pick a percentage chance of it happening in the next five years I suspect would be much higher than yours (if I had to give a number today, I'd give it a 7% chance). Great Britain I'd peg a bit higher, around a 12% chance, based on some articles I've been reading about their Brexit and supply chain issues.
      - wbsss4412 5y ago
        Do you really believe there is a 1 in 6 chance the UK sees hyperinflation? They aren’t even at their 20th century high point yet, and even then they didn’t crack 30% per annum. [1] [1] https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/czbh/mm23 https://www.ons.gov.uk/economy/inflationandpriceindices/time...
imtringued 5y ago
No, most countries suffering from hyperinflation either got bombed, hit by massive sanctions on their primary industry or intentionally shut down their agriculture industry. Yes, I am talking about the Weimar Republic, Venezuela and Zimbabwe.