Hyperinflation

The Disaster Of De-industrialization

Once a nation no longer produces essential goods and services, and depends on financial games or commodities to pay for industrial goods and food produced elsewhere, it becomes vulnerable to a collapse in the financial games and the commodity markets that made it all too easy to succumb to de-industrialization.

The Trajectory of Venezuelan Hyperinflation Looks Frighteningly Familiar...

Extreme shortages of food and power continue to ravage the country of Venezuela, and ordinary people have been paying the price. With triple-digit inflation, that “price” is expected to continue to soar even higher. Even scarier is the estimated pace of acceleration – by 2017, the IMF expects Venezuelan hyperinflation to climb to a whopping 1,642%. Our brains have trouble computing numbers of this magnitude, so we created today’s infographic to put things in perspective.

Nigeria Hyperinflation Looms As Central Bank Throws In The Towel, Devalues Currency

Less than a month ago, when looking at Nigeria's deplorable economic and reserve situation, we predicted that "Nigeria Currency Devaluation Looms As FX Forwards Crash To Record Lows." Ealier today this prediction came true when Nigeria’s central bank finally threw in the towel when it announced that the it will allow the Naira exchange rate to be market-driven, setting the stage for a devaluation of the currency, and unleashing the latest bout of hyperinflation.

This Is What The Unprecedented Chinese M&A Scramble In America Looks Like

The level of Chinese cross-border M&A chasing after US targets is literally off the charts. Notably, China has accounted for 26% of global cross-border activity YTD, which is nearly 3x higher than the next highest year. At $28 bn YTD, US-inbound deal flow from Chinese acquirers is already a record level and nearly 2x last year’s volumes

Deutsche Bank's Shocking ECB Rant: Warns Of Social Unrest And Another Great Depression

"In the 1920s the Reichsbank thought it could have 2,000 printing presses running day and night to finance government spending without creating inflation. Around the same time the Federal Reserve allowed more than a third of US deposits to be destroyed via bank failures, in the belief that banking crises where self-correcting. The Great Depression followed.... Today the behaviour of the European Central Bank suggests that it too has gone awry."

Steve H. Hanke's picture

Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke.

 

Most press reports about Zimbabwe’s fantastic hyperinflation are off the mark – way off the mark. Even our most trusted news sources fail to get the facts right. This confirms the “95 Percent Rule”: 95 percent of what you read in the financial press is either wrong or irrelevant.

Former Morgan Stanley Chief Asia Economist: "Don't Listen To The Ruling Elite, The World Economy Is In Real Trouble"

"Don't listen to the ruling elite," warns former Morgan Stanley Asian Economist, Andy Xie, "the world economy is on the cusp of a prolonged period of stagnation and instability." Xie points out that the ruling elite is blaming it on people seeing things (skeptic and fiction peddlers), and that "their strategy is to change people’s psychology." Unfortunately for them he concludes, "the world is catching fire and that fire will eventually reach their Davos chalets."

In Stunning Reversal, IMF Blames Globalization For Spreading Inequality, Causing Market Crashes

In a stunning reversal for an organization that rests at the bedrock of the modern "neoliberal" (a term the IMF itself uses generously), aka capitalist system, overnight IMF authors Jonathan D. Ostry, Prakash Loungani, and Davide Furceri issued a research paper titled "Neoliberalism: Oversold?" whose theme is a stunning one: it accuses neoliberalism, and its immediate offshoot, globalization and "financial openness", for causing not only inequality, but also making capital markets unstable.

What Would Ludwig von Mises Do In Venezuela?

The crisis in Venezuela is the most modern illustration of the horrific consequences of socialism and the devastating reality of hyperinflation. What makes this disaster all the more infuriating is that it could have been avoided with a basic understanding of history. We’ve seen the disaster of socialism and interventionism in various forms play out across the world time and time again with similar results, and yet new generations of central planners — backed by ideologically aligned intellectuals — are consistently able to fool people into believing that “this time will be different.”

Hedge Fund Billionaire Slams Democracy, Says The "Tyranny Of The Majority Is An Unhealthy Development"

In his latest letter to investors, OakTree Capital's Howard Marks goes political (slamming Trump's tariffs and Bernie's minimum wage machinations), shedding some blinding light on the economic reality of America, the dismal failure (and increasing impotence) of central bankers, and the ongoing "tryanny of the majority" warning that if everyone wants to tax-the-rich, soon there will be no rich to tax. As he concludes, short-term fixes simply cannot create wealth out of thin air (see Venezuela), as Churchill once said "for a nation to try to tax [or stimulate or devalue] itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle."

Nigeria Currency Devaluation Looms As FX Forwards Crash To Record Lows

Despite US equity investors' exuberance over bouncing crude oil prices, the world's crude producers continue to suffer and while Venezuela is in the headlines every day (having already collapsed into chaos), Nigeria appears the nearest to that abyss next. Having urged investors "don't panic" last year, and seeing dollar reserves drying up rapidly earlier this year, recent "lies" about the nation's statistics have raised fears of a looming devaluation as FX forwards have crashed to 291 Naira to the dollar (current peg is 199).