JP via RSS
What’s the Difference Between Deflation and Hyperinflation? Why do you ask?
Tuesday the IMF International Monetary Fund announced it sold 200 metric tonnes of gold to India at $1042 an ounce.
Gold soared over $1092 on panicked buying.
Should we rush right out now to buy Gold or Silver Eagles at a premium?
Maybe not. Decisions made in haste are often soon regretted.
So many are fearing hyperinflation, it behooves us to know what that really means, so we can protect ourselves.
Many older people have memories of 1923 wheelbarrow money in Weimar Germany after World War I that led Hitler to power and World War II. An ounce of gold, if anyone had one after it was made illegal, could buy an entire downtown block of commercial property in Berlin.
Younger people might have seen articles on Zimbabwe hyperinflation in the trillions to buy a loaf of bread. It seems Zimbabwe has survived by using dollars in a black market.
What is hyperinflation? How will it affect my bonds, gold or dollars? Is hyperinflation coming anytime soon?
We think not, for several reasons. The record shows hyperinflations follow depressions, not vice versa. Hyperinflations are the ultimate attempt to get a scarce something for nothing.
Hyperinflation is a monthly inflation rate of 50% or more.
Hyperinflation means the value of bonds, dollars, real estate and stocks go down when they cannot keep up with costs and prices rising faster than incomes can serve debts.
Gold seems to go up during hyperinflation. That is a monetary mirage as the dollars devalue down.
What causes hyperinflation?
