One of the more prevalent themes mentioned has been the possibility, or probability, of hyperinflation. Hyperinflation is often mentioned due to the degree of “money pumping” and other intervention measures that have occurred in the last two years to combat this period of economic weakness.
However, despite all of the predictions of hyperinflation, there appears to be no signs of it. One would think that if a hyperinflationary environment were present, gold would be a strong performer. However, gold is currently near $945, a level near the upper range of its movements since 2008.
Of course, hyperinflation can still yet occur, but so far no manifestations appear evident.
SPX at 996.36 as this post is written
1 thought on “The Hyperinflation Theme”
Demand for liquidity has been exceptionally high (flight to quality and all that). This has allowed the Fed to increase the base aggressively to avoid deflation and contraction.
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