Is Hyperinflation Coming Soon?

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Let's take a look at how hyperinflation has occurred throughout history and if it's likely to come in 2021 & beyond...

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In 2020 alone Jerome Powell printed 1/5th of the USA’s currency in circulation, around $10.5 trillion dollars. That’s about $27 billion dollars daily & this has left people with a big concern. That is, is hyperinflation on the horizon?

You see there’s a common pattern that occurs throughout history where 1 an unfortunate event happens, 2 the government looks to solve this through the mass printing of money which 3 leads to hyperinflation. 3 key steps we see this time and time again throughout history and it may be happening again today in the USA…

Let’s go back to Germany in the 1920’s. Germany had this goal of winning the war and using the bounty that it would reap to repay the money that they had created to fund the war. However an unfortunate event occurred and they lost the war. They were stuck in a lot of debt owing tons of money to France and a range of other nations. Germany struggled with the payments…

So instead of increasing taxes or increasing production & paying this off the natural way, they thought let’s just print more money. The government commissioned 130 printing companies to churn out piles of new currency.
It couldn’t be any surprise that what they did lead to hyperinflation.

Prices of goods and services started to get out of hand. Increasing 10’s of millions of folds in just a matter of years. All thanks to the mass printing of money the German mark had effectively become useless. There were some examples of people using the currency to burn as fuel rather as a note to buy something. A loaf of bread in Berlin that cost around 160 Marks at the end of 1922 cost 200 billion Marks by late 1923.

Yugoslavia a similar pattern occurred. In 1992 an unfortunate event happened. The country started disintegrating and fighting started in Croatia and Bosnia-Herzegovina. The United States placed a trade embargo on the republic. The government didn’t know what else they could do so they turned to the printing press and inflated the money supply in the country.

By Dec. 1993, the Topčider mint was working at maximum steam, issuing around 900,000 bank notes monthly that by the time the people got their hands on them they were practically worthless. Surprisingly hyperinflation had kicked in with prices doubling every 1.4 days, and the average daily inflation rate being 64.6%. That’s daily!

Now we fast forward to the year 2020, a situation which a lot of you will be much more familiar with. 2020 an unfortunate event occurs. We have a pandemic that spreads throughout the world and it requires everyone to stay at home. Businesses have to close doors, shops have to shut, the economy basically gets turned off.

So Jerome Powell head of the federal reserve does the one thing that he knows how to do best. He turns on the money printers, gets them heated up and starts printing money by the bucket load. And when I say this, this is all figuratively because these days they don’t need printing presses. Powell just has to press a button on a computer and money gets made out of thin air.

And Jerome did this to a large extent. The federal reserve committed to printing $10.5 trillion dollars in 2020 alone to offset the economic standstill. That’s almost 1/5th of the circulating U.S dollar. If we think about it that’s $27 billion dollars every single day. This is how it would look if bulldozers were pushing that money into a bottomless pit and it’s this amount that was made daily.

This is a visual outlook of $1 trillion dollars and they printed this 10 times over in just a single year. If you spent $1 million dollars a day since Jesus was born, you still would have not spent $1 trillion by now. Now think about 10 trillion…

So maybe now that inflation has started to go up in 2021, we shouldn’t be too surprised. Because as history teaches us, if we print a lot of money inflation follows. As the famous Winston Churchill paraphrased “Those who fail to learn from history are condemned to repeat it”.

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