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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

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...

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...