Hyperdeflation Vs Hyperinflation: An Exercise In Centrally Planned Chaos Theory

Tyler Durden's picture

One of the recurring analogues we have used in the past to describe the centrally planned farce that capital markets have become and the global economy in general has been one of a increasingly chaotic sine wave with ever greater amplitude and ever higher frequency (shorter wavelength). By definition, the greater the central intervention, the bigger the dampening or promoting effect, as central banks attempt to mute or enhance a given wave leg. As a result, each oscillation becomes ever more acute, ever more chaotic, and increasingly more unpredictable. And with "Austrian" analytics becoming increasingly dominant, i.e., how much money on the margin is entering or leaving the closed monetary system at any given moment, the same analysis can be drawn out to the primary driver of virtually everything: the inflation-vs-deflation debate. This in turn is why we are increasingly convinced that as the system gets caught in an ever more rapid round trip scramble peak deflation to peak inflation (and vice versa) so the ever more desperate central planners will have no choice but to ultimately throw the kitchen sink at the massive deflationary problem - because after all it is their prerogative to spur inflation, and will do as at any cost - a process which will culminate with the only possible outcome: terminal currency debasement as the Chaotic monetary swings finally become uncontrollable. Ironically, the reason why bring this up is an essay by Pimco's Neel Kashkari titled simply enough: "Chaos Theory" which looks at unfolding events precisely in the very same light, and whose observations we agree with entirely. Furthermore, since he lays it out more coherently, we present it in its entirety below. His conclusion, especially as pertains to the ubiquitous inflation-deflation debate however, is worth nothing upfront: "I believe societies will in the end choose inflation because it is the less painful option for the largest number of its citizens. I am hopeful central banks will be effective in preventing runaway inflation. But it is going to be a long, bumpy journey until the destination becomes clear. This equity market is best for long-term investors who can withstand extended volatility. Day traders beware: chaos is here to stay for the foreseeable future." Unfortunately, we are far less optimistic that the very same central bankers who have blundered in virtually everything, will succeed this one time. But, for the sake of the status quo, one can hope...

Chaos Theory, via Pimco

  • Debating a future of inflation vs. deflation is radically new territory for investors. The chaotic nature of the choice facing societies is whipsawing equity markets and dominating bottom-up factors.
  • Equity investors seem to be pricing in a combination of outcomes, with the largest weighting going to a goldilocks, mild inflation scenario. But the market’s large daily swings reflect jumps back and forth as investors update the probabilities of very different destinations.

Once per quarter investment professionals from across PIMCO’s global offices gather in Newport Beach for our Economic Forum. These sessions have been the foundation of PIMCO’s investment process for years; we debate and update our short-term and long-term views for the global economy, and, from that, for individual asset classes, such as government bonds, corporate bonds, mortgages and stocks. Last month we gathered for our December Forum and the topic that dominated the discussion, as it has in recent quarters, was the fate of the euro. Will the eurozone break up? Will European governments impose extreme, deflationary austerity to control their deficits? Will the ECB monetize the region’s debts and risk inflation in order to preserve the common currency?

Listening to my colleagues make their arguments during the Forum, I was taken back to my days fifteen years ago when I was an engineering graduate student at the University of Illinois. You may wonder what a debate about the global economy has to do with engineering. It reminded me of one of my favorite classes: nonlinear systems – the study of natural and man-made systems that, at times, behave very oddly. Allow me to explain.

Most systems we interact with every day are linear: if you change an input to the system by a small amount, the output will also change by a small amount. Think about driving to work: if you leave your house 10 minutes early, you will usually arrive about 10 minutes early. If you turn up the flame on a stove a little, the pot of water will heat a little faster.

But some systems, under certain conditions, behave very differently. These systems are said to have “sensitive dependence on initial conditions” – very small changes of the inputs can lead to enormous variations of the output. Mathematicians have given these systems the label of being “chaotic” and experts in the field are called “chaoticians.” (The term “chaotician” always struck me as ridiculous. Could you imagine introducing yourself this way?) The weather is the best example of a real-life chaotic system. Predicting the weather beyond a few days is impossible because minor variations lead to large changes in the future. Go back to the driving example: if you leave 10 minutes late, rather than 10 minutes early, you might hit rush hour, and the extra 10 minutes ends up costing you an hour. Chaos theory describes the conditions under which a system changes from linear and smooth to highly nonlinear and violent, where minor changes to the inputs will lead to enormous variations of the output.

Western societies are facing a seemingly minor choice, but that choice will lead to vastly different endpoints for the global economy and for asset prices.

In a “normal” economic environment investors debate a narrow range of outcomes: will the U.S. grow by 2.8% or 3.2%? Will inflation remain at 2.0% or climb to 2.3%? Debating a future of inflation vs. deflation is radically new territory for investors. The chaotic nature of the choice facing societies is whipsawing equity markets and dominating bottom-up factors.

While we don’t know with certainty which path societies will choose, we can identify a few potential outcomes and make reasoned assessments of what they mean for the economy and for equities:

1. Austerity and deflation

Borrowing money to consume allows families and societies to live beyond their means – for a time. Once the debt accumulation has run its course, reality has to set back in. For a family that may mean getting rid of a second car, dining out less often or cuts which are far more painful. It necessarily means consuming less, and to the extent that consumption equates to standard of living, it likely also means a reduced living standard. Societies face a similar challenge. The U.S. and parts of Europe have enjoyed exaggerated living standards enabled by borrowing from our future. Now that creditors are warning us they won’t let this continue forever, governments may reach consensus to cut spending and/or increase taxes to bring budgets into balance. Whatever the mix, by definition this likely means lower economic growth and perhaps a lower level of overall economic activity until debts are worked off and real growth restored. Deflation runs the risk of creating a vicious cycle, where prices fall, causing wages to fall, causing spending to fall, causing prices to fall further. This is a lower risk for a growing population such as in the United States, whereas Japan continues to suffer from such stagnation today. Europe’s demographics are much worse than America’s. The outlook for equities in this environment is negative in the short run and potentially very negative in the long run if a deflationary cycle kicks off. Corporate earnings at some point must be linked to economic growth, and stock prices represent the present value of a future stream of earnings. In a deflationary environment cash will be king – because your purchasing power will increase by just sitting on the sidelines.

2. Explicit default

The scenario of governments not paying back their creditors is extremely unlikely for countries that have their own currencies. Why default on your debt, which would trigger a crisis of confidence in your economy, when you can simply print more money? Of course, unpredictable politics can make the unthinkable possible, as we came dangerously close to seeing this summer with Washington’s debt ceiling debacle. In Europe it is likely some smaller countries, such as Greece, will default on their debt. They simply have taken on more debt than their economies can reasonably hope to pay back. And they don’t have their own currency, so printing drachma is not an option. It is hard to imagine a scenario where an explicit default would be good for equities. Just how bad depends on the size of the country defaulting and the extent of the preparations put in place to minimize the damage. For example, if countries have capitalized their banks to withstand the losses from a Greek default and the ECB funds Italy and Spain so they are not at risk of contagion, the impact to equities should be more muted. An uncontrolled default, or a default of a larger country would be very bad for risk assets and could trigger a deflationary spiral described above.

3. Mild inflation

Mild inflation is the goldilocks scenario: central banks print money to help fund governments while they employ structural reforms to make their economies more competitive and generate long-term growth. Such structural reforms take time to produce results, often many years. Printing money provides governments with that time while, in theory, reducing the sacrifices citizens must make, and the inflation that usually follows makes the fixed debt stock easier to service, because prices (and hence taxes) increase. It often results in a falling currency, which makes exports more competitive. It is easy to see why countries with their own currencies usually choose inflation as the preferred response to overwhelming debt. Although creditors suffer because the purchasing power they were expecting has been reduced, society has to make fewer hard choices and can continue to enjoy its exaggerated standard of living until the pro-growth economic reforms come to the rescue. In a scenario of mild inflation, equities should do well. Prices are contained, the economy functions and corporate profits should continue increasing. Of course, if policymakers do not use this time to implement real economic reforms, which can still be painful for certain constituencies, mild inflation doesn’t solve anything. It just delays the necessary day of reckoning.

4. Runaway inflation

The danger of mild inflation is that it may not remain mild. Inflation is driven by expectations, the collective beliefs of what the future holds that reside in the minds of millions of people. If people expect prices to go up, they will demand higher wages so they can maintain their standard of living. This will increase the cost of labor, pushing the cost of goods higher. A vicious cycle of inflation can take hold as prices climb higher and higher. The U.S. suffered from double-digit inflation in the 1970s, and in an extreme case, Germany suffered from hyper-inflation following World War I. Runaway inflation is devastating because an economy loses its anchor. People are afraid to hold cash because their purchasing power drops rapidly and so they must hoard real assets. Interest rates soar causing investments to plummet. Central bankers are generally afraid of attempting to induce mild inflation for fear they may nudge expectations more than they hoped. Nudging the collective beliefs of millions of people is an inexact science. The Federal Reserve is cautiously experimenting with its expectations-nudging-arsenal with its recent communication innovations. Runaway inflation would be very bad for most risk assets and equities in particular because of the devastating affects on real economic growth and the increases in costs of production and of capital. A loss of faith in paper currencies would mean gold and real assets would likely be king.

5. Miraculous growth

A list of potential solutions to our unsustainable debt load would be incomplete without including a high growth scenario. It is true there could be a major breakthrough in, for example, energy technology that spurs extraordinary economic growth, which would drive tax revenues higher and enable governments to pay down their debt without asking their citizens to give up their exaggerated living standards. In such a scenario, equity returns would likely be very strong, especially for the sector enjoying the innovation. The technology sector in the 1990s was an example. However, such a scenario today is low-probability. We invest based on what we think is likely to happen, rather than what we would like to happen. Policymakers can’t count on a growth miracle and neither can investors. And don’t forget the bumper tax revenues of the 1990s actually led to increased government spending in some cases when politicians wrongly assumed the increased tax revenues would last forever.

While the expected value of two equally possible outcomes, 0 and 1, is 0.5, there is zero chance the outcome will actually be 0.5. It will either be 0 or 1. Based on the level of the stock market today, with a price to earnings ratio of about 13x in the developed world and 11x in the emerging economies, equity investors seem to be pricing in a combination of these outcomes, with the largest weighting going to the goldilocks, mild inflation scenario. But the market’s large daily swings reflect jumps back and forth as investors update the probabilities of these very different destinations.

I believe societies will in the end choose inflation because it is the less painful option for the largest number of its citizens. I am hopeful central banks will be effective in preventing runaway inflation. But it is going to be a long, bumpy journey until the destination becomes clear. This equity market is best for long-term investors who can withstand extended volatility. Day traders beware: chaos is here to stay for the foreseeable future.

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Mongo's picture

Hyperponzination is guaranteed


Yup, it's a ponzi either way.

bank guy in Brussels's picture

People who write articles like this hardly ever credit Jim Sinclair:

"QE to infinity!"

Which he said years ago, would be the programme.

NotApplicable's picture


I like how the "Goldilocks Scenario" is Friedman's managed descent into Hell known as an inflation target, where our only hope is that they can "muddle-through" the disruptions, keeping them a manageable size.

Hopefully, they've got a new drug lined up for the municipal water systems to pacify the herd, who will be the ones adjusting to the "ever lower standards of living."

Buckle Up!

SheepDog-One's picture

"QE to infinity! ZIRP4EVA!"

All wrong, people cant see the big picture...this is just Crazy FEDdies going out of business sale before the wrecking ball is wheeled in.

Anyone who believes the Central Bankers plan is just to keep printing money so YOU get 'reasonably priced' food and gasoline 4EVA is going to get a real rude awakening real soon.

kito's picture

yep sheepie, the qe'ers cant get it through their head that ben wont take the dollar down with the ship. 

Thomas's picture

"Central bankers are generally afraid of attempting to induce mild inflation for fear they may nudge expectations more than they hoped." Still lying after all these years.

The average investor has one falopian tube and one testicle. By that model, I could imagine a Goldilocks outcome.

GoinFawr's picture

not a surprising comment, coming from a ZH'er who presents the words of a non-voting member of the fed to be as inevitable as God's own truth.

GoinFawr's picture

Not quite sheepdog. I've outlined this before: the purpose of the mountains of interwoven debt created and then sequestered into opacity (derivs and the like) exist solely as an ever handy mechanism for those with easy access to the 'printing' presses to create the illusion of scarcity/value. So, whenever they perceive that the likes of you or I are beginning to catch on to the inherent worthlessness of their issued paper, they begin calling in that debt, all the while freely ZIRP-ing themselves into whatever wealth you or I might still have left. And they ease off 'calling it in' whenever they perceive that  enough of the likes of you and I (or whoever else, big or small, that they happen to be looking to rob blind on that particular day) have been forced coerced and cajoled back to paper, again all the while printing themselves into whatever real wealth your or I might have left.

'Deflation' and 'inflation' are nothing more than tools used to modify our perception of value (Jim Sinclair) in a world of fiat currencies; tools that stand ready to obey the whims of those who control those who control those who add/subtract zeroes from the world's fiat money supply, an easily manipulated form of currency which historically has a long term trend that has always, everytime, without fail, undeniably, eventually resulted in the same thing: an utter and complete collapse in confidence. Do you honestly believe the duped MMT'er fanatics who think that this time it is different?

Ah, I see that I have struck a nerve on one of the faithful.

ffart's picture

Why would anyone want these fucks to succeed? Things won't get any better until everything's completely burned down, might as well get a head start.

DoChenRollingBearing's picture

@ bank guy

I have always admired Sinclair, and I think he has it right.  Lots more QE, whether now or later.  

But that's the rub.  Which of the article's scenarios will happen and when?  I contend that we cannot know, and so the best that each of us can do is prepare ourselves for ANY scenario or combination.

Gold is certainly part of how each of us can protect ourselves.  10% in gold is a great amount, very comfortable.  But, having cash/fiat$ there at home (ideally a few months worth of expenses) is a good idea too.  For now, I will pass on commenting about other preparations for the extreme scenarios (TEOTWAWKI) as they have been explored adequately on other threads.

"Miraculous Growth"?  That's why it's OK to hold some stocks and bonds too.  Anything can happen.

The Deleuzian's picture

Baudrillard was a bastard!...But a correct bastard!!

TheSilverJournal's picture

How many fiat currencies have gained in value when their host country goes bankrupt?...None.


bernorange's picture

Before or after they go to war?

akak's picture

How many fiat currencies have gained in value when their host country goes bankrupt?...None.

Excellent point, but one which the clueless and disingenuous deflationary flat-earthers will NEVER attempt to address, as their grasp of monetary history is consistently weak to nonexistent --- as it must be for them to espouse their absurd, nonsensical theories of appreciating fiat currencies, something which the world has NEVER ONCE experienced, much less in the face of exponentially rising governmental debt.

Stupidity, thy name is deflationist.

WonderDawg's picture

So, it's my imagination then, that the dollar is rising? Looked at a dollar chart lately?

akak's picture

You know damned well that the dollar is NOT rising --- it is merely the case that the euro is (temporarily) falling faster than the dollar.  If you are even going to try to use the idiotic and essentially meaningless propaganda tool of the US Dollar Index to attempt to claim that the dollar is rising in value, then you will have instantly discredited yourself from being taken seriously in this discussion.

The US dollar is NOT the US Dollar Index!

And show me all the prices that are falling as your dollar is supposedly "rising".

Really, why can you be so intelligent so often, and so clueless and disingenuous when it comes to this myth of fiat currency deflation?  There has NEVER been such a thing, not once, in all of monetary history, and I am hardly willing to bet that this time will be the very first.

WonderDawg's picture

First of all, you need to use a little more discretion with your word choice. Your favorite word is "disingenuous". You use it in just about every post. It means "insincere". I am obviously very sincere with my posts on this subject.

Second, there has never been, in the history of money, this much global debt. I've said it before but I'll repeat it: I don't think TPTB have as much control as you think they do, and they will be overwhelmed by defaults, which is deflationary. This will trigger CDS, which is also deflationary. TPTB will be overwhlemed for a while. THEN, after a deflationary collapse, we'll have your inflation. But not until then.

A lot of things have never happened until they do. A lot of people are going to get caught with their pants down. I won't be one of them.

akak's picture

Second, there has never been, in the history of money, this much global debt.

I find that to be a totally specious argument, as well as superficial and irrelevant.

The fact that the debt is global is really not relevant in any way --- it merely means the the eventual financial and currency collapse (which will be accompanied by rapid currency debasement, as ALL such events have always been) will affect most or all of the world, instead of just one nation or one region.  But the essence of the situation is no different than it was for any number of overly and unsustainably indebted individual nations and regions in the past.

When the finances of the wildly overindebted Latin American nations of the 1980s finally collapsed, did it result in their currencies GAINING value?  That is fucking insulting to even suggest!  Of course it did not --- the values of their currencies, EVERY ONE, plunged in value.  And so it was for EVERY --- and let me repeat that --- EVERY single nation in THE HISTORY OF THE WORLD!  Each and every one whose government found itself in the situation in which ours are now today ended up in currency depreciation and/or collapse.  Are you trying to tell us that each and every such occurrence was just COINCIDENCE?

(The one consistent factor that I have noted with all these deflationary flat-earthers (and I call them "flat-earthers" because they ignore the abudantly obvious) is a total ignorance of, and disregard for, ALL of monetary history.  Whether supposedly hard money advocates (such as Mish Shedlock) or fiat lovers, they share with the Keynesians and other pro-status-quo economists an obsession with theories over facts, and their arguments consistently favor the pro-Establishment position, which makes it instantly suspect to me in and of itself.)

Relative to the size of their economies at the time, the Latin American governmental debts of the 1980s were VERY analogous to ours today --- but again, you want us to believe, not only in the face of logic, but in the face of ALL historical evidence, that "this times is different".  It may be different in scale, but not in its essentials --- and if you are actually willing to bet that one of those essential characteristics is going to be an APPRECIATING fiat currency of a bankrupt government, then I pity you, as you are setting yourself up for financial suicide. 

TheSilverJournal's picture

We're already at basically the floor of deflation, which can be exemplified by the collapse of MF Global. If asset prices go down any further from here, then depositors lose their money. Everyone that has anything in the bank will lose it all.

The game is to keep the banks solvent so depositors can withdraw their money, which is possible until the amount of currency being printed in order to do so approaches infinite.


WonderDawg's picture

Time will tell who is right. Obviously, I believe I'm right, but I'm also nimble and willing to admit I'm wrong. If that turns out to be the case, I'll adjust my strategy and positions to suit the circumstances. Whatever the case, interesting times to be alive. They'll be talking about 2012 centuries from now.

akak's picture


And while I may at times get heated with you, WonderDawg, we have had many good exchanges, and I thank you for them.

Funny, the other day I was discussing with a friend, who holds most of their savings in precious metals, the idea that it might be a good idea to hold at 5% to 10% of those savings in cash (actual, folding, physical cash), because in the short run, I do believe that almost anything can still happen, including "bank holidays" and other events during which cash, and not gold or silver, would be the best asset.  Then I realized that what I was suggesting to them was the mirror-image of what many conventional financial advisers would suggest (or used to suggest), that being holding 5-10% of one's assets in precious metals.  Strange times indeed.

WonderDawg's picture

Yep, cash isn't cash unless you can put your hands on it. Bank holidays, bank failures, etc., and your "money" can be inaccessible in an instant (MF Global, it ain't just for brokers anymore). Just like PMs, if you can't put your hands on it without having to go through a banker or a broker, you don't own it. The percentage, I think, depends on your circumstances. If you can keep 6 months worth of expenses in cash (and expenses will change if TSHTF), I'd advise anyone to do it. Cash means you can put your hands on it, otherwise, it's just digits in an account to which your access can be denied.

Jam Akin's picture

Good dialog: flexibility and diversification (on as many dimensions as possible) will be the key to survival in what lies ahead.

Corn1945's picture

Inflation is devastating to virtually everyone except the very rich.

How long has the median wage been stagnant in the US? How many people are going to get a raise in the age of globalization?

Are these douchebags from PIMPco unable to do simple research? The answer to that appears to be "Yes."

I would fade the daylights out of anything that comes from Gross and his gang of perpetually wrong losers.

bob_dabolina's picture

That's a curious comment. 

I looked at the numbers/charts going back to the 70's and in every post recession period home values go up markedly with inflation. So that's typically good for most home owners and 401kers as stocks normally go up as well. So inflation isn't entirely a bad thing if you pay attention to your money and what's going on.

This case is a little different because we have had inflation during this "recovery" (like oil going from 30-100) and food based inflation was 6% last year; the DOW eeked out gain etc. However, home prices are for the most part flat/stagnant and some areas prices are going back down. The median home price in Detroit is $6,000 dollars. 

So in this "recovery" the middle class is actually shrinking and most people are getting fucked which is the natural consequence of the government/FED nourishing malinvestment. 

bob_dabolina's picture

Thanks...in addition: 

A lot of people don't realize this (100% of the OWS crew) but it was FDRs policies that actually prolonged the Great Depression and even in some ways made it worse. 

The government really needs to get out of all these markets because the market will eventually get it's way and when it does...it...will....be....bad. 

I wonder how the Greeks feel about how central planning has worked out for them.

TheSilverJournal's picture

Housing didn't go up because of inflation. Housing isn't like oil or gold. Mortgage holders have monthly payments and lower rates means lower monthly payment, giving people the ability to pay a higher price. Greenspan lowered rates to almost 3% in 1993 and 1% in 2004. Then he raised rates in 2006 to 5% and whala..housing implosion.

That coupled with the growth in the socialization of housing with Fannie / Freddie and other housing programs. Now, the socialization of housing is just about all in with 95% of newly issued mortgages being backed by government. And the US is about to role out another socialization plan by selling foreclosures as rentals in $1B bulk sales. 

Towards the top of the housing bubble, there was so much momentum with rates being lowered and socialization of housing that prices were going up just because housing prices were going up.

My point is there are now simply too many houses and housing will go down for awhile no matter what happens with inflation. In real terms, housing is set to fall 70%-80% considering hyperinflation will remove the easy credit because the printing press will be rendered worthless, the Fed will be ineffective in backing mortgages, and American’s will become much poorer because hyperinflation is economically devastating. In order to save on housing maintenance and utility costs, more people will will living in each household. In addition, many will altogether leave the country, which will further expose the overbuilding of housing that cheap money and government backing of mortgages has created.


Now is the time to take the equity out of your home if you would like to keep that equity. The best way to save is with silver. Gold is a great option too. If you’re looking to save in USD, nickels now have a melt value of more than $.05.



aphlaque_duck's picture

Peak oil changes everything this time. Biflation bitchez.

CPL's picture



All anyone needs to do is type diesel shortage into google news and that much is appearent.  These countries make everything we use everyday for a fraction of the cost in labour.  Without that diesel, trucks, factories and boats don't move.  People stand still for a while until they snap, like Pakistan currently kicking out their PM about 30 minutes ago.



mayhem_korner's picture

Inflation is devastating to virtually everyone except the very rich.

How long has the median wage been stagnant in the US? How many people are going to get a raise in the age of globalization?


I know you're not suggesting that hiking wages would help with the inflation problem...are you? 

Inflation is a tax, avoidable only by the ability to store currency in things you will need later.  Most people don't have that ability, which I think is what you're saying.

Kaiser Sousa's picture

for all REALMONEY soldiers...

"This afternoon, FOX Business Network’s Charlie Gasparino reported that “a breakup of the CME is on the table” as the firm’s executives face increasing scrutiny over their involvement in the collapse of MF Global."


NotApplicable's picture

How could it not be?

Just another part of the plan to destroy everything while securing the loot.

Irish66's picture

EU regulators officially nix NYSE Deutsche Bourse deal; NYSE to appeal to EU commissioners NYSE informed

toadold's picture

"The firm faild by breaking the law." Uh....uhm....then why hasn't anybody been arrested, convicted, and jailed yet?

GeneMarchbanks's picture

If you're OJ: hyperinflation if you're Las Vegas housing: deflation. In the end... hyperinflation is a political event not monetary.

Also, Kashkari is an enormous piece of shit or put another way a former Goldmanite.

Quinvarius's picture

I am pretty sure we are not waiting for them to choose inflation.  They already did choose it.

NotApplicable's picture

However, this is not a one-time event, but rather a daily decision for the PPT, as well as a periodic decision by the Fed board to try the next failed round of QE (which of course is an ever shortening time-frame).

In other words, it's all about timing.

morning_glory's picture

They will NEVER let deflation happen.


Act accordingly.

WonderDawg's picture

THEY might not have a choice in the matter.

No cryptic suggestion.

The Axe's picture

Nothing but computers left  there is no investors

Oquities's picture

deflation and inflation are now happening simultaneously in USA. this process is simply being disguised. policy miscalculations will upset this equilibrium, pulling the curtain back on the ongoing fraud in govt statistics and balance sheets, and the confidence will be lost. then, while their goal may have been goldilocks slinking away quietly, the large bear will awake and take back his porridge of hyperinflation.