May 27 (Bloomberg) -- The U.S. economy will enter “hyperinflation” approaching the levels in Zimbabwe because the Federal Reserve will be reluctant to raise interest rates, investor Marc Faber said.
Prices may increase at rates “close to” Zimbabwe’s gains, Faber said in an interview with Bloomberg Television in Hong Kong. Zimbabwe’s inflation rate reached 231 million percent in July, the last annual rate published by the statistics office.
“I am 100 percent sure that the U.S. will go into hyperinflation,” Faber said. “The problem with government debt growing so much is that when the time will come and the Fed should increase interest rates, they will be very reluctant to do so and so inflation will start to accelerate.”
Prices may increase at rates “close to” Zimbabwe’s gains, Faber said in an interview with Bloomberg Television in Hong Kong. Zimbabwe’s inflation rate reached 231 million percent in July, the last annual rate published by the statistics office.
“I am 100 percent sure that the U.S. will go into hyperinflation,” Faber said. “The problem with government debt growing so much is that when the time will come and the Fed should increase interest rates, they will be very reluctant to do so and so inflation will start to accelerate.”
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Peacenik doesn't know what to think about the inflation/deflation debate. Faber is a respected pundit, but some accuse him of just trying to sell his book. On the one hand housing prices are still dropping, and some stuff seems to be getting cheaper. But not a pint of beer....yet. On the other hand world economies are running trillion dollar deficits, which in the past has led to inflation. The billion dollar Zimbabwean burger is a scary thought.
Ilargi and others argue that the black hole of debt is just mopping up all the liquidity that is being thrown into the system. He argues that there isn't enough money in the world to fill the black hole. Can the average Joe, someone with few assets and/or a chunk of debt, somehow hedge himself/herself against either eventuality? Can anyone? Can Peacenik?
Ilargi and others argue that the black hole of debt is just mopping up all the liquidity that is being thrown into the system. He argues that there isn't enough money in the world to fill the black hole. Can the average Joe, someone with few assets and/or a chunk of debt, somehow hedge himself/herself against either eventuality? Can anyone? Can Peacenik?
