Inflation Ghosts: Past, Present & Future

Individuals dream about winning the lottery, stock market profits, reducing debt, earning more income, attractive sex partners, and tasty food. But our dreams can turn into nightmares filled with inflation ghosts and monsters.

The derivative monster is a destroyer. Deutsche Bank stock closed at $6.76 on June 7, 2019, down from over $100 in 2007. A repeat of 2007 is possible. Price on July 25 is $7.89 – still sick.

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THE GHOST OF INFLATION PAST devastated many countries. Heavy debt chains clanked as the ghost walked. He wept knowing the human destruction that inflation and hyperinflation created during the past century and that more inflation lies ahead.

Monetary inflation appears innocuous at first. Governments and economies need liquidity, print currency units and feed them into the economy. People feel wealthier. Prices rise, usually faster than income. Debt payments become more onerous and the standard of living declines. The central bank prints more currency.

Prices rise further. Currency units buy even less. Prices for gold bullion, stocks, food and housing spike higher as people convert dying currency units into anything that will retain value.

Defining hyperinflation as 50% price increase per month for at least 30 days, there have been (per Professor Steve H. Hanke) 55 hyperinflations in the last century. There will be more.

Believing that a government or central bank can create wealth by printing currency units is a dangerous delusion. Politicians and economists should know better, but they often indulge in excessive currency “printing” that causes higher prices.

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THE GHOST OF INFLATION PRESENT stalks the halls of congress and the Eccles Building (Federal Reserve), beguiles everyone, and encourages Quantitative Easing, Modern Monetary Theory (MMT), Magic Money Tree thinking, ZIRP, and other nonsense. Nobel Prize-winning economists proclaim that governments need more debt while over $13 trillion of sovereign debt “pays” negative interest rates. Craziness!

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Miles Franklin will exchange digital or paper dollars for real silver and gold. Call 1-800-822-8080.

Disclosure: None. 

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