What do you think of the hyperinflation talk

[Benjamin Frank]

1.This isn't completely accurate based on the U.S History, but I remember somebody retweeted this which I gather was originally meant as a serious tweet: "I've been warning you for 46 years now how government deficits will lead to hyper-inflation!"

2.The hyperinflation chicken littles are either gold bug charlatans (or crypto charlatans now) or Republican economic elite charlatans to the degree that they aren't one and the same.

3.I don't know that people can't have a good grasp of economics, macro or otherwise, it's mostly just common sense of following a process through from one logical (or most likely) step to the next.   The main problem for most people I think is as Yoda (almost) said "you have much to unlearn."  Most people's understanding of economics is clouded by all the nonsense spewed by charlatans.

4.Inflation is a real concern as many commodity prices (inputs) are increasing.  This is especially the case with many nations all over the world deciding to deficit spend their way out of the pandemic, which will likely also lead to upward pressure on interest rates.

However, with the brief exception when oil prices rose significantly in 2006-2007, inflation has been largely non existent for 30 years now.  To claim the economy has not significantly changed from the 1990s to now and that inflation will return in the U.S in some significant way due to large government budget deficits is clearly not supported by reality.

So, all in all, I think there will be a return of inflation that may exceed the 2% upper target, to maybe 3% (I'm really purely guessing but...), but the Biden Administration seems to be aware of these concerns and the economy is so much more globalized, so I don't think there will be any inflationary spiral as we saw starting in 1966 and then again around 1986 (1987 actually, but I like the symmetry.)