Dr. Doom on Hyperinflation

Dr. Doom

Dr. Doom

Many economists are scoffing at the potential for hyperinflation here in the United States as housing price declines, unemployment and auto sector weakness dominate the headlines.

I don’t know if scoffing is the best idea right about now. 

I have frequently been discussing the possibility of hyperinflation both with clients and here on TRB.  Earlier this month, I featured an op-ed by Dr. Allan Meltzer on inflation fighting.

This morning, Bloomberg Television in Hong Kong did an interview with Marc Faber, the author of the Gloom, Boom & Doom Report.

FT Alphaville picked out some choice quotes to give you a flavor of how serious of an issue Faber predicts inflation will be for us:

“I am 100 percent sure that the U.S. will go into hyperinflation,” Faber said. “The problem with government debt growing so much is that when the time will come and the Fed should increase interest rates, they will be very reluctant to do so and so inflation will start to accelerate.”

And this nugget:

The U.S. economy will enter “hyperinflation” approaching the levels in Zimbabwe …Zimbabwe’s inflation rate reached 231 million percent in July

Other notable Fed watchers have repeated the refrain that Bernanke may not be politically able to raise rates while employment data continues to be ugly.

This growing fear of inflation may be a good reason for why the hedgies are back to the commodities trough of late.

Something to keep an eye out for.

Sources:

Faber on Hyperinflation (Bloomberg)

FT on Faber (FT Alphaville)

Read Also: 

Will Bernanke Have the Stones?

The Coming Inflation Fight

What's been said:

Discussions found on the web
  1. The Scrub commented on May 27

    We need hyperinflation for like 20 minutes. That way I could sell my neighbor a can of tuna for a few million bucks and then pay off my student loans.

    Seriously though, do you think we’ll end up anywhere close to Zimbabwean levels of hyperinflation? I can’t picture the Fed being THAT concerned with public opinion if it means we end up with Mugabe and cholera outbreaks.

  2. The Scrub commented on May 27

    We need hyperinflation for like 20 minutes. That way I could sell my neighbor a can of tuna for a few million bucks and then pay off my student loans.

    Seriously though, do you think we’ll end up anywhere close to Zimbabwean levels of hyperinflation? I can’t picture the Fed being THAT concerned with public opinion if it means we end up with Mugabe and cholera outbreaks.

  3. The Scrub commented on May 27

    We need hyperinflation for like 20 minutes. That way I could sell my neighbor a can of tuna for a few million bucks and then pay off my student loans.

    Seriously though, do you think we’ll end up anywhere close to Zimbabwean levels of hyperinflation? I can’t picture the Fed being THAT concerned with public opinion if it means we end up with Mugabe and cholera outbreaks.

  4. Joshua M Brown commented on May 27

    yeah, the Zimbabwe comparison was clearly meant to grab headlines, but the direction sounds accurate

  5. Joshua M Brown commented on May 27

    yeah, the Zimbabwe comparison was clearly meant to grab headlines, but the direction sounds accurate

  6. Joshua M Brown commented on May 27

    yeah, the Zimbabwe comparison was clearly meant to grab headlines, but the direction sounds accurate

  7. ian in hamburg commented on May 27

    Faber makes his living being a contrarian, and he’s good at coming out with outrageous stuff that tv producers love. He’s been doing it for ages. I guess Bloomberg was desperate for material that day.

  8. ian in hamburg commented on May 27

    Faber makes his living being a contrarian, and he’s good at coming out with outrageous stuff that tv producers love. He’s been doing it for ages. I guess Bloomberg was desperate for material that day.

  9. ian in hamburg commented on May 27

    Faber makes his living being a contrarian, and he’s good at coming out with outrageous stuff that tv producers love. He’s been doing it for ages. I guess Bloomberg was desperate for material that day.

  10. Manshu commented on May 27

    This was just to grab some headlines. Considering the number of places on the web this has appeared I think it worked pretty well.

  11. Manshu commented on May 27

    This was just to grab some headlines. Considering the number of places on the web this has appeared I think it worked pretty well.

  12. Manshu commented on May 27

    This was just to grab some headlines. Considering the number of places on the web this has appeared I think it worked pretty well.

  13. Joshua M Brown commented on May 27

    @Manshu. IanInHamburg…you guys are right, it was click bait, and I ran with it too…oops

    Faber is on ignore for awhile as are the rest of the PT Barnums of Wall Street

  14. Joshua M Brown commented on May 27

    @Manshu. IanInHamburg…you guys are right, it was click bait, and I ran with it too…oops

    Faber is on ignore for awhile as are the rest of the PT Barnums of Wall Street

  15. Joshua M Brown commented on May 27

    @Manshu. IanInHamburg…you guys are right, it was click bait, and I ran with it too…oops

    Faber is on ignore for awhile as are the rest of the PT Barnums of Wall Street

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