High Inflation AlwaysTransitory Ends in Recession/Depression
Jun 26, 2021 18:05:49 GMT -5
Post by schwartzie on Jun 26, 2021 18:05:49 GMT -5
High Inflation is Always “Transitory” and Always Ends in Recessions or Depressions
BY DOHMEN CAPITAL RESEARCH
SATURDAY, JUN 26, 2021 - 9:08
By Bert Dohmen, Founder
Dohmen Capital Research
An interesting article on Zerohedge on Friday was titled: “BofA Crashes The "Transitory" Party: Sees Up To 4 Years Of "Hyperinflation."
Such a headline gets my attention. Bank of America shocked some observers by saying it expected a period of 2-4 years of “hyperinflation.”
I don’t agree with “hyperinflation.” Generally it is defined as a 50% rise in prices PER MONTH. We won’t have that. However, double-digit inflation should be considered, except for the faulty measures from Washington. What are my reasons for that conclusion? Well, the Bible tells us that in the soon-coming Tribulation it will cost a day's wages for a loaf of bread...
Over the past year I have given my view on future inflation. Here is what I see now.
INFLATION IN 2021:
The most recent inflation numbers are the highest in 29 years. Fed Chair Powell calls that “transitory.”
He could be right, depending on the definition. It is true that all high inflation periods eventually end. In that way, they are all “transitory.” Life is also “transitory.”
What causes high inflation periods to end? Only one thing ends inflation: tight money, meaning the unavailability of credit, and a resulting deep recession-depression.
Given the current attitude in Washington, tight money is a long ways off. Any signs of serious economic weakening would be countered by the Fed and Congress. The latter will do what they can to create more money out of thin air to avoid losing votes. And they do it with OUR taxpayer money, to be repaid in the distant future by our children and future generations.
To say that inflation now and in the near future is “short term” is a joke, or intentional deception. All factors for inflation are in gear as never before at this time in an economic cycle, including:
Unprecedented governmental spending programs flooding the markets
Unprecedented federal reserve support programs
Supply shortages
Labor shortages
Unprecedented household savings because of federal programs, all triggering what we call…
“Supermarket inflation,” which eventually trickles down into...
Higher prices for everything, including “services.”
Continued at link
BY DOHMEN CAPITAL RESEARCH
SATURDAY, JUN 26, 2021 - 9:08
By Bert Dohmen, Founder
Dohmen Capital Research
An interesting article on Zerohedge on Friday was titled: “BofA Crashes The "Transitory" Party: Sees Up To 4 Years Of "Hyperinflation."
Such a headline gets my attention. Bank of America shocked some observers by saying it expected a period of 2-4 years of “hyperinflation.”
I don’t agree with “hyperinflation.” Generally it is defined as a 50% rise in prices PER MONTH. We won’t have that. However, double-digit inflation should be considered, except for the faulty measures from Washington. What are my reasons for that conclusion? Well, the Bible tells us that in the soon-coming Tribulation it will cost a day's wages for a loaf of bread...
Over the past year I have given my view on future inflation. Here is what I see now.
INFLATION IN 2021:
The most recent inflation numbers are the highest in 29 years. Fed Chair Powell calls that “transitory.”
He could be right, depending on the definition. It is true that all high inflation periods eventually end. In that way, they are all “transitory.” Life is also “transitory.”
What causes high inflation periods to end? Only one thing ends inflation: tight money, meaning the unavailability of credit, and a resulting deep recession-depression.
Given the current attitude in Washington, tight money is a long ways off. Any signs of serious economic weakening would be countered by the Fed and Congress. The latter will do what they can to create more money out of thin air to avoid losing votes. And they do it with OUR taxpayer money, to be repaid in the distant future by our children and future generations.
To say that inflation now and in the near future is “short term” is a joke, or intentional deception. All factors for inflation are in gear as never before at this time in an economic cycle, including:
Unprecedented governmental spending programs flooding the markets
Unprecedented federal reserve support programs
Supply shortages
Labor shortages
Unprecedented household savings because of federal programs, all triggering what we call…
“Supermarket inflation,” which eventually trickles down into...
Higher prices for everything, including “services.”
Continued at link