Wednesday, July 28, 2010
Victor Sperandeo warns of hyperinflation
"Trader Vic" Sperandeo is on CNBC describing the historical pattern for the onset of hyperinflation, and says the conditions for such a runaway inflation are now here in the US.
We're getting more familiar with these types of extreme forecasts as our economy drifts into unchartered territory. It seems market watchers are almost growing accustomed to hearing predictions about a coming hyperinflation or a looming deflationary depression.
Still, it should be noted that Sperandeo is a serious guy and a very serious researcher (my observations based on reading his work and listening to his interviews). His knowledge of economic history and the nature of money creation and business cycles is profound. So while the forecasted event is an extreme and rare event, don't dismiss Vic as "just another scaremonger".
It is striking to note that while Vic is arguing his case for the likelihood of hyperinflation, in effect the spiralling collapse of a society and an economy, he is interrupted by the CNBC girl who wants to know "what the trade is" in this scenario. Cable TV never ceases to amaze.
Related articles and posts:
1. Dying of Money: causes of inflation - FSN broadcasts via Finance Trends.
2. Interview: Victor Sperandeo on hyperinflation - Tischendorf.com.
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4 comments:
David, a few months ago I started getting Bloomberg TV (I only subscribe to the most basic of basic cable and was pleasantly surprised to get it.)
The difference between Bloomberg and CNBC couldn't be more stark. CNBC has Rick Santelli, who is the real deal, but overall it isn't even close.
Pimm Fox's 5:00pm ET show is the best of the best, from what I've seen.
John, couldn't agree more. I almost cringe in advance of watching anything on CNBC, and thankfully my viewing is limited to these odd clips I come across on the web.
Santelli is a lone voice of sanity on that network; I also enjoy the writing of John Carney who recently joined CNBC.com
Bloomberg has, to date, maintained its more serious edge and focus on reporting and insight, leaving the loud shouting matches & entertainment to the other channels. And for those who don't know, you can also catch Bloomberg TV live on the web.
Hyperinflation requires the distribution of huge amounts of physical currency. This is because hyperinflation causes the credit markets to shut down quickly. Can you imagine paying 430% APR on your credits cards? Can you imagine a lender stupid enough to lend in a hyperinflationary environment?
The bottom line is that as long as the US is a credit-based economy, there will be no hyperinflation...
VegasBob:
You are incorrect. I would suggest reading Bernholz's book on almost all modern (i.e., the last 200 or so years) cases of hyperinflation and high inflation; then rewrite your glib dismissal of hyperinflation happening here. At this point it is not only possible, but given the idiot in the White House and the fool at the helm of the Fed, it is likely.
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