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⏰ Time Stamps ⏰
1:25 Global stage set for hyperinflation?
5:19 What is inflation?
6:37 Causes of inflation
7:41 Inflation can be good
8:35 Why inflation can be bad?
10:01 What can we learn from historical inflation?
12:27 Are we going to end up like Venezuela?
18:52 How am I protecting myself against hyperinflation?
22:24 Conclusion
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🔖 Sources 🔖
► Senate approves historic $2 trillion stimulus deal: https://edition.cnn.com/2020/03/25/politics/stimulus-senate-action-coronavirus/index.html
► Venezuela coffee hyperinflation tracker: https://www.bloomberg.com/features/2016-venezuela-cafe-con-leche-index/
► Bank of England inflation calculator: https://www.bankofengland.co.uk/monetary-policy/inflation/inflation-calculator
► FEDs monetary policy objectives: https://www.federalreserve.gov/faqs/money_12848.htm
► US inflation calculator: https://www.usinflationcalculator.com/inflation/historical-inflation-rates/
► Cost to produce US currency: https://www.federalreserve.gov/faqs/currency_12771.htm
► Household savings US: https://www.cnbc.com/2018/09/27/heres-how-much-money-americans-have-in-savings-at-every-income-level.html
► Breakdown of $2 trillion US rescue package: https://finance.yahoo.com/news/breaking-down-costs-2-trillion-224220924.html
► Advanced economies to shrink 35%: https://www.bloomberg.com/news/articles/2020-04-14/goldman-sees-advanced-economies-shrinking-35-amid-pandemic
► Paper silver market 205x bigger than physical: https://tavex.fi/en/the-paper-silver-market-is-250-times-the-size-of-the-physical-silver-market/
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📝 Overview 📝
The world in 2020 is one full of lockdowns, struggling economies and stimulus packages. Trillions of dollars are being pumped into the US economy and that begs the question: is all this going to lead to hyperinflation?
💰 What Is Inflation? 💰
Well, it’s when the cost of items rise, but the value of our money stays the same. This usually happens very slowly.
❓Causes of Inflation?❓
There are 3 main causes of inflation:
1. If there is increased demand and not enough production.
2. If there is an increase in production cost.
3. Built-in inflation which leads to a wage-price spiral.
😊 Inflation Isn’t Always Bad 😊
The US FED has an inflation target of around 2% per year. That’s good because the prices of certain assets automatically go up by that amount every year. Also, if we know the value of our money is falling every year, then it encourages us to go out and spend it. That’s usually good news for the economy.
😱 Why Inflation Can Be Bad? 😱
Some people hold a lot of cash and inflation reduces its purchasing power every year. Inflation is also a key mechanism which pushes up the price of assets like real estate. So, if you are struggling to get on that housing ladder then chances are that you have inflation to thank for that.
💸 Is $2 Trillion Enough To Cause Hyperinflation? 💸
What can be learned from historical inflation? Between 1917 to 1920, the US had double digit inflation thanks to WW1. This resulted in vast amounts of spending and the manufacturing of war supplies. A shortage of resources led to higher production costs and higher prices.
A similar thing happened after WW2 and the 1970’s were characterised by double digit inflation due to the US coming off the gold standard in 1971. This basically created our modern day fiat dollar.
🤔 Guy’s Thoughts On Hyperinflation 🤔
I’m sorry guys, you are going to have to watch the video for my personal take on this.
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📜 Disclaimer 📜
The information contained herein is for informational purposes only. Nothing herein shall be construed to be financial legal or tax advice. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Trading Forex, cryptocurrencies and CFDs poses considerable risk of loss. The speaker does not guarantee any particular outcome.
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