iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
21,399 Blog Posts

Buzzword: Hyperinflation

All of the cool kids have ostensibly hopped on the hyper-inflation bandwagon.

The term “hyperinflation” is often tossed around by cromagnons and homo erectai in a very laissez faire manner, likely promulgated whilst imbibed and induced by narcotics and/or excessive quantities of IPA swill. The idea that hyperinflation could impose itself on us, land of the imprisoned home of the gay, is impossible. Dare I say, lest you have an army that can remove the Unites Steaks from its European brethren, the notion of hyperinflation snaking its way into our society is something only a moron would conjure up.

What is hyperinflation? Let’s define it first.

Ah, I see 50% per month. In other words, the world’s currency reserve will fall victim is a Zimbabwe tier destruction, all the while monies and assets are ferried where? Oh, I see — they will be transferred into Bitcoin.

Got it.

Go fuck yourself.

On the other hand, inflation of the reasonably annoying sort is here and likely to persist. People like Gundlach are sober and don’t grow long beards and threaten to live in Africa because of white shame and guilt. Under a Gundlach scenario, you’ll want to be long TMV (short treasuries), long oil/copper/other metals — basically anything but gold. Reason being, if you want inflation protection — cryptos are far more preferabble since it has proven to be main stream.

On the issue of Bitcoin — I am long Dec31 40s and 41s for new futures ETF BITO. It’s a dice roll. But if BTC erects to $100k by New Year’s — those fuckers will rip ~400% from current levels.

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15 comments

  1. edge

    In addition to tons of other crypto plays, I bought the BITO 40 AND 45 calls, because I like to buy something with good open interest. Also bought some 35 puts, because tons.
    You’re 100% correct about hyperinflation. It is hyped mainly by subhuman preppers who are praying that they haven’t wasted their stupid lives and the most tawdry of gold salesman.

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  2. soupbone

    This might get interesting. Many have never experienced inflation of the 4%-5% sort. Blindly chasing inflation hedges on their part will result in big gains on my part, if they should be so inclined. Gold has always sucked.

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  3. roguewave

    Our inflation is transitory. If it lasts longer than 5 years; I will be very surprised.

    Hyperinflation does require massive printing but by itself that’s not enough.
    It requires loss of confidence.

    I have to re-read When Money Dies, but if I recall in Weimar they first had price controls – even gluttony was a crime. Then did they tax the rich? leading to a loss of confidence?

    Bu Bu Bu Bu Biden would never do those.

    One thing simply did not exist back then. The world has never had a currency with a fixed supply. Bitcoin. And we never had negative interest rates.

    Central Banks have been doing unnatural things that had never been possible or imagined.

    At a market cap of 1.1T BTC is tiny. If 10T is added it matches gold’s market cap. (600k / BTC) If some Central Banks blink and start to buy…we would find out what fixed supply really means.

    Crazy, unlikely, yes, but the chances are not zero.

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    • Mr. Cain Thaler

      It really was just the printing. The German central bank decided to just print to dilute war reparations and every day destroyed the country more. Then finally his eventual successor at another bank said “enough”, issued his own currency, it was adopted virtually overnight everywhere, and the whole affair was over.

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  4. Mr. Cain Thaler

    Yeah that is just retarded. The US is in no way on the cusp of experiencing hyper inflation. Good grief, Hjalmer Schacht, calm down and tinker with your bird site.

    Now we are going to get 5%+ inflation for probably 3-5 years. And I think people are really underestimating how much damage this can do to financial markets.

    It comes from how yield is priced, since for whatever incomprehensible reason stock investors decided to chase bond yields on their treck zero.

    y is yield, e is earnings and p is stock price.

    y = e / p

    Then if yield changes

    a * y = a * (e / p)

    And if e is fixed

    a*y = e / (p / a)

    That gets nasty. If inflation pushes up bond yields, stock yields are sure to follow and if they double stocks will be halved.

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  5. purdy

    Yeah ..his “over 4%” is a uselessly safe bet.

    As for your defining hyperinflation as 50% a month…well that makes it easy for you to be right this time …ah hem …now that you apparently are no longer repeating Fed talking points about “transitory”.

    I have no clue where prices will go. I thought the Fed would have acted by now. Maybe they believed their own press releases about “transitory”. But maybe they have something else planned and stability is not the goal.

    Anyway, there’s a lot of cash that’s been stashed by those who saw no value in earning 0% at the local Savings and Loan. Anticipatory buying …supply chain fuck-ups …there’s a lot to fix and subtle hints about taper down the road are not enough.

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  6. edge

    As long as the upper 1/100th of the upper 1% are allowed to suppress the wealth accumulation of the bottom 2/3 deflationary risk will prevail. This is indeed tempirary.

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    • edge

      BTW- there is no political intention in that. It’s just the way advanced (consumer driven) economies work.

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  7. soupbone

    Transitory is double speak. 5% reduction in purchasing power is 5% reduction in net worth and it is permanent. If it happens for 4 years that is a 20% reduction in net worth. What is transitory about that? This will not be allowed to continue for long.

    Which brings us to the point of hedges. There is no hedge against this. The so-called hedges have to be obtained at the correct price which occurred a while back. Every one of the famous hedges has to be sold and gains taken when they are ripe. Prime example energy.

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    • metalleg

      Agreed. They use the word ‘transitory’ and the fools think that means prices will go back down after the period of high inflation. Wrong!

      As for hyperinflation, it is a loss of confidence in the currency. While Fly thinks it can’t happen, I believe they want it to happen but will act like they never saw it coming.

      Jack is controlled. He didn’t tweet that without a thumbs up from his masters.

      I think they want total control which means a transition to something that is not the USD. In order to achieve that, they need to kill off the USD and bankrupt the masses.

      Anyone who thinks they wouldn’t do such a thing should look at the whole Covid scam from beginning until now.

      These folks will say or do anything.

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  8. Mr. Cain Thaler

    Energy markets starting the week out looking spicy.

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  9. tha pirate

    #Let’sGoBrandon!

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  10. emersonlakepalmer

    92 cargo ships fagging around off the Californication coast is the primary cause for this inflation.

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  11. Mr. Cain Thaler

    Natural gas now up 10%, preparing to retest the highs with energy and food prices following behind and my dudes.. this rally is not built to last.

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