Tuesday , 24 May 2022

What Would It Take For Hyperinflation To Occur in the U.S.? (+32K Views)

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There is a difference between inflation and hyperinflation…and there is no gradual path from one tobth_hyperinflation the other. To wind up with true hyperinflation, some very bad things have to happen. The government has to completely lose control… the populace has to completely lose faith in the system… or both at the same time. [Will the U.S. go down that path? Let’s review the situation.] @A Financial Site For Sore Eyes & Inquisitive Minds

The comments above are edited ([ ]) and abridged (…) excerpts from the original article by Justice Litle

Do You Still Have Faith in the Monetary System?

Faith in the system is a very important concept and it is very hard to kill and by “faith” I don’t mean liking what the government is doing, or being happy about the direction the country is going… @HELP

@$Here are a few simple questions to determine whether you still have “faith” or not:

  • Do you still have a meaningful amount of cash in checking or savings accounts?
  • Do you rely on electronic payment systems (credit cards, bill pay etc.) for most of your transactions?
  • Are you still comfortable with your employer paying you in legal tender or, if you own a business, with your customers paying in same?
  • Does the percentage of your net worth tied up in physical hard [i.e. gold and/or silver] assets amount to] less than 50%?

If you answered “yes” to the above questions, then…you are still invested in the functioning financial system as we know it. You still have “faith”… not in your heart but in your deeds.

Inflation Versus Hyperinflation

Inflation, even double-digit inflation, can be handled within the confines of the system. The unofficial inflation rate in Argentina is somewhere around 25% right now, and people aren’t even rioting in the streets. They aren’t super-happy, obviously, but they are adjusting. (The government is pumping up wages, so that may have something to do with it.)

Hyperinflation, in contrast, means that all hell has broken loose. To get true hyperinflation,

  • the economic engine has to break down
  • or there has to be a clear sense the government has lost all control.

This is why hyperinflation tends to come:

  • in the aftermath of wars,
  • or at the tail end of badly mismanaged regimes where the economy has been going from bad to worse for a very long time.

@$$The possibility of rapidly accelerating inflation in the United States is very real…but hyperinflation is a much darker prospect. To get to that point, cash has to be seen as not just undesirable, but worthless. [You would be in a] real-life nitty-gritty panic mode  [going] to the grocery store as soon as your paycheck hit on Friday knowing [full well] that prices [would be going] up again on Saturday; buying two months of food at a time; fighting for the last loaf of bread on the shelf; turning off the heat because the gas bill is double the rent.

Hyperinflation in the U.S.

[While] hyperinflation could come about in the United States I would argue [that it would not happen] quickly or easily. Americans won’t just wake up one day and say “Gosh, look at that.” In fact, to get to U.S. hyperinflation, I believe something else would have to happen first — the onset of a new Great Depression scenario, even worse than the last one.

Already the deficit hawks are yelling and screaming [citing] high inflation risk… In Washington, this is playing out as dramatic lip service to austerity – massive budget cuts and a timetable for raising interest rates so here’s the thing: If the inflation problem becomes too serious for the hawks to be ignored [one of two scenarios could unfold:]

  1. eventually the Federal Reserve will be forced to…pull a “Volcker” and hit the inflation mule over the head with a sledgehammer. This “Volcker action” could then trigger a collapse in the value of paper assets, as all the rebuilt Ponzi schemes pumped with Federal Reserve money come tumbling down again. [Why? Because] the underpinnings of the U.S. economy were much stronger in Volcker’s day [back in the 70’s when]  there was far less debt and leverage built into the system… [or]
  2. the stock market could crash on its own, as investors realize the stimulus rainbow has delivered them to the edge of a cliff.

Either way, some aggressive action will be taken to stop the build-up of inflation, be it through Washington policy backlash or the organic effects of another Wall Street meltdown. (As a side note, China and the Middle East are two other strong candidates for “meltdown catalyst.” If the China miracle implodes, the global economy goes with it. If the Middle East goes up in flames, oil becomes the $200 a barrel grim reaper.)

@$$$When…[such an] inflation-stopping event drops [our current] recovery in its tracks positive sentiment will quickly collapse. The dreaded “D” word, deflation, will be back on everyone’s lips – and that is one of the great ironies at this juncture of financial history. The deflation monster still has not been vanquished! It is simply hiding under the bed, biding its time until the Fed-and-China-created stimulus bubble pops and when that bubble DOES pop, that’s when things [will] get really frightening.

What Would Cause Hyperinflation to Occur in the U.S.?

When the global economy encounters some domino chain combination of Japan/Middle East/China/America implosion, the threat of Great Depression 2.0 [will] come roaring back, bigger and uglier than before [because] all the “extend and pretend” actions [that have been] undertaken until now [will] have only made the problems worse… [Those past] attempts to stop “normal” inflation [will] trigger an economic collapse that rivals [the conditions experienced during the] Great Depression… At that juncture, it will be apparent to all that the Federal Reserve has run out of bullets – that “more stimulus” simply cannot work – that trillions have already been thrown down the drain. That is the point where true panic comes in.

It is then, when the monetary authorities wet their pants in the face of a new deflationary panic, that the real threat of hyperinflation [will] return to the fore. If all hope becomes lost… we could see the Fed desperately propose something like QE2 times 10, on the order of not $600 billion but $6 trillion. That is when the real horror would begin.

Not since the Civil War has there been a crisis serious enough to tear families apart at the seams – but we believe this one will turn brother against brother.


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  3. If China was to back their currency with precious metals and rare earths (the old gold standard) how would this affect world currencies?

    • It would be a good thing. A stabilised and protected Yuan couldn’t do too much harm for stability of worldwide fiat; however I doubt USD and EURO pundits share my sentiment and may feel slightly threatened of such; as gatekeepers of the world based currency and runner-up

    • “.. how would this affect world currencies?”. As idiotically as the nonsense that’s brought us to this point. ALL ‘currencies’ including ‘Fiat currencies’ and ‘crypto-currencies’ have NO intrinsic value other than a ‘token’ of convenience for the barter system. The same applies to ” precious metals and rare earths (the old gold standard)”, and Monopoly Money, etc etc. Even toilet paper (as seen recently!) has more ‘value’ than ‘bank-cheques’ and other ‘tokens’, all of which have a ‘price’, but NONE of which has any ‘VALUE’. Consider: If you fall overboard in mid-pacific would you rather I threw you a lifebuoy or a bucket of gold, dollars or bitcoins? If the world is to avoid disaster it needs to get back to the basics which provided PRODUCTIVE ~ repeat PRODUCTIVE~ work for anyone who wanted it (ie. ‘RULE OUT’ pencil-pushers, politicians and other POINTLESS pricks!) and rely upon the ‘INTRINSIC value’ system that actually CREATED our ‘wealth’ in the first place. Bottom line when TSHTF:- if you can’t eat it, and can’t wipe your arse with it, it has NO intrinsic worth.

  4. “Liberty Lost: How Debt Destroyed Our Freedoms” is a novel that tells a story of what could happen if the U.S. experiences hyperinflation. Everything discussed above is explored in an exciting narrative. Check it Out!!

    • Propagandistic gobbledegook! ANY ‘system’ that needs enforcement to exist is NOT, by definition, ‘FREE’. (For one thing you don’t have the FREEDOM to OPT OUT! Moreover, it’s NOT possible to make ‘rules’ that serve the purposes of 1000 individual people, let alone many MILLIONS of them. The wombats at the bottom of my garden (not noted for (what we call ‘intelligence’) know THAT! THEY don’t have their ‘freedoms’ dictated by multi-layers of politico-viruses fed by a self-serving ‘Taxes-on-Demand’ system, which shares the motto taken from the handbook of Mafia Protection Rackets:- Give Us Your Money Or We’ll Hurt You! But they soften the imposte a little by declaring the NEED for control to defend the hand-on-heart, tear-jerking, stiff-salute ambition of ‘Democracy’. You know: the (again!) System based upon the credo that ‘Two Morons Are Smarter Than One genius’.

  5. Well now that some of this is taking place, I’m buying and gold and I can’t believe I’m saying this but some Bitcoin, much easier to get at this point where I am.

    • OMG!! And I’ll bet you vote for politicians and pay taxes, too!. Incidentally, HOW do you intend to PAY for your gold and Bitcoins? With dollars? Y’don’t wonder why ANYONE who actually OWNS gold and (NON-EXISTENT!!) cryptocurrencies would be willing to swap them for eek! dollars??

    • Overlooked your comment first time around. After much thought I’ve narrowed down the best ‘buys’ to ride out, with the VALUE of your wealth intact, the financial holocaust engineered by self-serving political systems. Among the forerunners (due to long-shelf-life, relatively light weight and ease of concealment) is cocaine. Why do you suppose it’s ‘illegal’ (in an allegedly FREE society!)? Because governments and their grasping, sucker-armed tentacles CAN’T CONTROL IT.

  6. That’s exactly what the Fed has done now, they have created ,$6 trillion out of thin air and will bail everyone out this time, if this doesn’t cause inflation, the Fed is cooking the books, and manipulating the stats

  7. How does a Republican Senate approve of such deficit spending? Wasn’t a balanced budget the drum beat of the Republican party?

    • hehehehe. ANY political dictatorship “does” such things because the idiot population ‘democratically’ elects it to DO such things. Remember Lazarus Long, who made the point that ‘Democracy is based on the precept that two morons are smarter than one politician’. Ever wonder why nobody has established a ‘Democratic Dictatorship’ party on the basis of being the only political movement HONEST enough to PROMISE the gang-rape of the electorate.?

  8. Hi there, your post is very interesting and in fact, a lot of what you said last month seems to be happening right now. What is your take on what is happening right now with the fed and this “stimulus” package? Thank you so much for your time and I hope to hear from you soon.

    • I’m here thinking the same thing on the same day. I do not have faith they are doing it right and it’s not just American citizens that have to have faith in this system. If the world decides they are tired of being paid in monopoly money and America just printing there way to prosperity, things can change very quickly.

  9. What would it take, exactly what we’re doing that’s what.