Saturday, February 14, 2009

Is hyperinflation in our future?

Maria,

"In economics, hyperinflation is inflation that is "out of control", a condition in which prices increase rapidly as a currency loses its value. Definitions used by the media vary from a cumulative inflation rate over three years approaching 100% to "inflation exceeding 50% a month." In informal usage the term is often applied to much lower rates. As a rule of thumb, normal inflation is reported per year, but hyperinflation is often reported for much shorter intervals, often per month. " source: http://en.wikipedia.org/wiki/Hyperinflation

I have experience as you have a large percentage increase in the price of fuel. Recently, I went to the Home Depot to buy fertilizer. A 40# bag of Scott's citrus fertilizer last year was $12, about 6 months later the price is $19.98. That is a 66% increase in about 6 months.

A near trillion dollar economic stimulus is about to effect us. We might be in the early stage of hyperinflation. I never had the unfortunate experience of living through hyperinflation. We might be about to know what it feels like. I wish I could tell you what you need to know to survive.

I am going to the Home Depot now to see if I can find more inflation symptoms. [I did. Yes! There are others.]

Stephen

p.s.

"We are confronted with a broader and deeper slowdown than has been experienced in decades," said U.S. Treasury Secretary Timothy Geithner.

"We will work closely with our colleagues in the G7 and the G20 to build consensus on reforms that match the scope of the problem revealed by this crisis."

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