Can the same disastrous hyper-inflation that hit Zimbabwe also hit the United States too?
We’d better hope not, because that picture is not pretty.
I normally dismiss doomsday scenarios out-of-hand. People are always telling us the world is going to end, or some horrible fate awaits us, due to some goofy reason or another. But it never seems to come true, does it? I’ve learned to disregard such talk on principle.
But economic disaster is different. The risk is real, as we know from past history, as recently as September 2008, with the collapse of Lehman Brothers, where a bank run was already in progress. So, I encourage you to read the article above. Think about it. The pieces he mentions are definitely in place.
There is no doubt that Americans as individuals, and America as a country and a government, have been borrowing against tomorrow to live large today. And we’ve been doing it for a long time now. We’ve been more than happy to eat our cake and have it too, and politicians have been more than happy to let us do that, while insisting that there is plenty more where that came from.
And there is also no doubt that the Obama administration is ramping that whole process way, WAY up.
And finally, there is no doubt that while government does grow, it never, EVER shrinks.
So all the pieces are in place. The stage is set. These are facts.
Will it come to pass? I guess that depends on factors like how much money we print to pay our debts, and how big those debts grow over the next few years.
But economic catastrophe can’t happen here, right?
Why not? Americans like to imagine themselves immune to economic disaster, as if insane levels of wealth are a unique American birthright. And ever since the late 1800s, with a few interruptions, that has been more-or-less true, for much of our population.
But the reason it has been more-or-less true in the past is not just because America is America. The reason is the miracle engine of economic expansion. I.e., if we screw up our economy enough today, the wealth train stops. And some say it has already stopped, because we’ve been borrowing against our future and tapping into our home equity to finance illusory lifestyles, while jobs have been disappearing overseas. And there is much evidence to support that view, too.
So who knows? I don’t have the answers. Well, maybe I do:
STOP SPENDING SO MUCH FRIGGING MONEY!!!
Yeah, you can just cross that off the list, right now.
So, is hyper-inflation just one more doomsday prediction that never comes true? Let’s hope so. I really, really hope so.
But we have to consider the possibility that we might be whistling past the graveyard here. And even when viewed in the best possible light, it seems that our economy is not healthy when it relies so much on consumer spending.
Place your bets. And ask yourself: what does have real value when currency itself has none?
The obvious answers: weapons, your own supply of food and water, and firewood. Welcome to the year 1620!