The Mythical Fear of Hyper-Inflation

 

A Quarterly Report:

A Long-Term Perspective On Inflation

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The Mythical Fear of Hyper-Inflation

You can hear the buzzword ‘inflation’ and, the even more fear-inspiring word ‘Hyper-Inflation’ every week without even having to strain your hearing. We’ve seen them used almost endlessly in advertisements and in the media.

Their purpose seems to be both:

  1. Manipulative (to persuade investors and traders into the opposite trading position of the institutional traders) or
  2. Promotional (selling gold, silver or ‘inflation-fighting investments’ to the uninformed.

But, where’s the real evidence of danger from inflation or hyper-inflation?

Does this danger even exist today? The short answer is NO, and the proof is provided by LONG-TERM price history as depicted in price charts.

The trick here is to note that promoters of investments or commodity ‘opportunities’ are forced to only use optimized or short-term price charts to make their case.

They have to do this because THERE IS NO CASE FOR INFLATION WHATSOEVER when the reality of historical price movement is presented in it’s entirety.

As the precious metals (GOLD, SILVER & PLATINUM) are one of the most familiar markets being promoted as a protection from hyper-inflation, let’s take an honest long-term view of their price history and the industrial metal COPPER in the following charts.

metals

                                     The Metals have been in a Deflation mode since 2011. – George

Inflation means higher prices in a local currency. Hyper-Inflation means exponentially rising prices in that same local currency.

What we see on these charts is the complete opposite of those two scenarios. In fact, prices have been declining in all these metal markets since 2011!

Instead of being in an inflationary mode, the metals are in a strong declining price environment.

This is called DEFLATION, where prices continue to decline over time (in terms of the US Dollar in this case).

What makes this situation a Global one affecting many nations is that the World Reserve Currency in which these metals have been decreasing in price is also the STRONGEST currency in the Western World; the US DOLLAR! Observe the following chart to confirm this for yourself . . .

usd

                     The US DOLLAR has been increasing in value since 2011, not Gold! – George

The combination of a strengthening Reserve Currency AND decreasing prices for Metals priced in that currency is creating Global Deflation and competition for lower prices everywhere. – George

  • November 9, 2015