Hyperinflation is a term to describe rapid, excessive, and out-of-control general price increases in an economy. While inflation is a measure of the pace of rising prices for goods and services, hyperinflation is rapidly rising inflation, typically measuring more than 50% per month.
In 1992, the first year of economic reform, retail prices in Russia increased by 2,520%. A major cause of the increase was the deregulation of most of the prices in January 1992, a step that prompted an average price increase of 245% in that month alone.
Michael Bburry revealed a massive bet that we are ahead for heavy inflation, so are we in risk of hyper inflation?
Even though the US is printing money, shoutout to stimiluls bills and the interest rates, it is unlikely that the high rate will become hyper. Major inflation yes. Hyper inflation, very unlikely, same odds as my grandpa getting a job at the Russian Tesla factory.
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In 1992, the first year of economic reform, retail prices in Russia increased by 2,520%. A major cause of the increase was the deregulation of most of the prices in January 1992, a step that prompted an average price increase of 245% in that month alone.
Michael Bburry revealed a massive bet that we are ahead for heavy inflation, so are we in risk of hyper inflation?
Even though the US is printing money, shoutout to stimiluls bills and the interest rates, it is unlikely that the high rate will become hyper. Major inflation yes. Hyper inflation, very unlikely, same odds as my grandpa getting a job at the Russian Tesla factory.
Get 10% Off The TipRanks Ultimate Plan Here - Affiliate Link:
https://www.tipranks.com/verify-purchase?sku=3256820&custom2=affiliate&custom3=TomNash&utm_source=TomNash&utm_medium=affiliate&coupon=TOMNASH&affiliates=TomNash
๐๐๐ Big shout out to our growing list of Patreons. For those of you want (and can) support our channel, here is how you can help: https://www.patreon.com/user?u=13016082
You can now book a live 1X1 call with me via Clarity here: https://clarity.fm/tomnashv2
I have a long position in PLTR
DISCLAIMER: All of Tom's trades, strategies, and news coverage are based on his own opinions alone and are only done for entertainment purposes. If you are watching To'ms videos, please Don't take any of this content as guidance for buying or selling any type of investment or security. Tom Nash is not a financial advisor and anything said on this YouTube channel should not be seen as financial advice. Tom is merely sharing his own personal opinion. Your own results in the stock market or with any type of investment may not be typical and may vary from person to person. Please keep in mind that there are a lot of risks associated with investing in the stock market so do your own research and due diligence before making any investment decisions.
I'm not here to say that inflation isn't coming, but in this video i want to explain to you why. I think the whole fear about hyperinflation is nothing but fud. It's mumbo jumbo! It's nonsense and it's being voiced by people who have no freaking idea about economics. It's just pitiful to hear this idiot stock.
My name is tom nash and i quit my corporate job as a senior financial analyst to break down companies for you there's one thing you need to know about me: i don't take from anybody. Let me tell you a thing about hyperinflation. Most of you have no idea what it actually looks like and feels like. However, since i was born in 1981, i know exactly how it looks like exactly how it feels like and trust me that ain't a pleasant sight.
Russia in the 90s, specifically 91 92, was a horrible place to live in, because prices went up by 2500. Almost overnight you woke up, you couldn't afford a lot for bread, svetlana loganov and her two kids will slide right past the black market, she's not interested in cigarettes or shoes today, but rather in getting enough food for dinner. It is the toughest job in moscow. These days before price controls were lifted in january, she and her husband vadim were making it but prices.
This trip to the market have doubled in some cases. By the time she comes back at the end of the week, they could quadruple. You have people hoarding bread and food, pretty much cash becoming useless people trying to spend as much of it as they can just to get food. You see the massive lines, the shortages, the problem for shoppers here these days isn't the long lines russians are used to waiting in line their concern is what happens when they reach the end of that line.
There they'll find either bread or milk three or four times higher than they were just weeks ago or worse, no food at all people just going berserk, because the money was losing its value so fast that, by the end of the day, your retirement fund was probably Worthless that was as bad as the was and trust me. I was 11 years old. I remember it very vividly. Here's the question for you, you hear all these fudsters talking about.
Well we're headed to hyperinflation. Now you can't mistake me for a guy who loves what the fed is doing. You can't mistake me for jerome powell fan i've been on record, saying that we're heading into inflationary times, it's just inevitable when you're printing, so much money when you have the interest rate. So low it's inevitable that you're heading to inflation, especially when it's compounded by the shortages because of the logistical supply chain issues.
When you have more demand for goods, then you have goods in the market when you have much more money than actual physical goods or services. That's where you see inflation now, here's the thing in the us there's definitely inflationary concerns and they're, rightfully actually voiced. Just recently, we had four and a half percent in april, which is pretty much almost double, i think, even more than double than the standard. Two percent right, so i'm not here to say that inflation isn't coming, but in this video i want to explain to you why. I think the whole fear about hyperinflation is nothing but fud. It's mumbo jumbo! It's nonsense and it's being voiced by people who have no freaking idea about economics. It's just pitiful to hear this idiot stock. Let me explain this in a three minute: video, don't click, nothing! Don't smack nothing, don't buy nothing! I mean you can buy a t-shirt pretty much, that's the only thing i sell and even then like who cares.
I just want your attention because i want to educate you about hyperinflation and i want to avoid all these fosters from actually getting some space in your head check this out. So i just gave away my bottom line here, which is we're not headed to hyperinflation, but i do want to explain why, because i think most of my viewers actually want to hear the full analysis. So here's the thing: what is hyperinflation so hyperinflation is when hits the fan. Essentially, if you're talking about normal inflation numbers, it's about two percent per year, high inflation numbers is about four percent per year.
The highest we've ever seen in the us was in the 80s 15 per year, even that is nowhere near hyperinflation and just to give you a general idea in economics. Usually the threshold for entering the hyperinflation discussion is about 50, which is something unprecedented that we've never seen before. You have to understand that hyperinflation is an insane race to the bottom or the top wherever you're looking at it. Excessive price raises overnight, essentially you're waking up realizing well, my 401k is worthless.
Hallelujah, that's reality for a lot of russians that grew up in the 90s. That's not a fable. However. I'm going to explain to you why this is completely impossible in the u.s economic and monetary system, and even though i'm not a huge fan of jerome powell or the fed, i'm going to explain why.
I think what they're doing right now is actually the right thing to do so, as i mentioned earlier, we're definitely headed into inflationary times. Now you have john powell actually denying even that, which is something i don't agree with. However, the rest of this policy actually makes sense and, as you know in my videos, i like to give you the nuance, unbiased truth without any agenda, i don't want to promote any agenda left or right or politics or nothing just the truth, the nuance one. So i think the risk with the u.s monetary system is not of hyperinflation, which is literally impossible.
I'm gon na explain in a second. Why is actually the adverse effect? So let me explain how it works. When you have increased inflation, the fed raises the interest rates. Why? Because they want to encourage savings, if you encourage savings by increasing the interest rate you're, basically telling people hey. If you put your money in the bank, you can get a very nice interest, so you might want to do that instead of buying that new porsche. What that causes is less competition for the same amount of commodities, actually slowing down the inflation, but it's a really nasty pill. It's kind of a poison pill to the market, because what it does it cools down the market? It's like antibiotics, you can't just take it and say: well, i'm just going to kill the you know the bad cells, it kills everything, so it slows down the entire economy and a good example for how dangerous applying this interest increase policy is. Let's think about a car, let's say: you're going 85 90 on the freeway you're flying all of a sudden.
You pump the brakes all the way through you're gon na crash and obviously i'm not saying that the fed will do it. But i'm here to say that the only risk real risk to the us economy is that the fed is gon na overreact and actually pull the trigger much faster than it needs to to actually increase the interest rate and will actually push the market into a recession. So, based on the monetary policy of the us and john paul and the fed, you can clearly see that they have their finger on the trigger they're ready to pull that lever, and then they give it a moment to increase the interest rates to slow down inflation. Then letting inflation going over five or six percent is almost zero.
I don't think they'll ever do it now. Here's the thing. The real risk here is that they pull that lever way faster and stronger than it needs to be pulled. Going back to my example of the pumping the brakes all the way through that might push the market, the stock market and the general market into recession, not depression, don't listen to the hype, artist from the other side as well recession.
Now that can happen. If you cool down the market too fast too much too early, which is the real risk so before you go, and you listen to all these videos about hyperinflation from people who have no idea what hyperinflation is trust me, that's not the real risk. The real risk is that jerome paul needs to understand that they shouldn't increase interest rates until they're, confident that the market is actually speeding way too fast for its own good right now. That's definitely the case, and the good news are is that jerome powell is aware of that.
You can hear john powell going on tv and saying hey we're nowhere close to pulling that lever because we're not there. Yet. I absolutely love that statement, even though i don't agree with him that the future is inflation. He says that it's going to be inflation.
I think there will be inflation, but there is no way in hell. In fact, my grandpa has more odds of getting a job at the russian tesla factory that still does not exist than of hyperinflation in the us, and that's it i'm not going to waste any more of your time, because i respect every single minute of it. Thank you so much for the channel members. Thank you for the patreons. I hope that completely diffuses the fud about hyperinflation. It's nonsense. It's a meme! It's for everybody who keeps saying that you better sit your ass back down and listen to what i just said shout out to everybody, see you guys later.
Hey Tom
I just wanted to say I really like your channel. The way you present information. Get to the point, and maintain transparency and integrity
Care to explain how real estate and housing jumped 30-40% in the past year ? Itโs not just in California either , itโs happening everywhere. The greatest wealth transfer in history. Being in my early 20s with no real amount of wealth and assets already built I may as well rope now to save myself the heartache.
But Bernie said bread lines are a good thing. I thought that was the end game utopia ๐คฃ
But seriously we've printed more money in the past year and a half than in the entire history of the country. The value of the dollar is circling the drain. The fed isn't even publishing their dollar printing numbers anymore. Maybe not hyper inflation but enough inflation people won't be able to afford things.
@Tom Nash I respect the intelligence and financial acumen. However to say hyper inflation is impossible, I think does a dis-service to the argument. We've been on this trajectory for awhile, so now that we are finally seeing some serious signs of inflation, it only makes sense to consider those possibilities so people can best protect themselves from it.
Hyperinflation in the USA would mean a global financial collapse. Itโs not happening. Inflation that will result in slamming on the brakes to the money printer and raising rates aggressively? Very likely. And that will HURT BADLY for people that are over leveraged. Basically poor people.
Hyperinflation is a political phenomenon. It is created by excessively wasteful fiscal policy decisions combined with an economy that can't support the burden.
It is even worse than that.. the disconnect between what the market expects and what will happen with a faster than expected rate rise will be a massive literal shock to the system.
dude…you know Jack Squat about Economics…but you will learn …the Hard Way in Time…and so will everyone else..
1. Interest rate has been falling steadily for 40 years. It's been near zero for almost a decade for all developed countries. Increasing interest rates is impossible, it will cause everything go bankrupt because they will not be able to pay their interest. Business is going bankrupt all the time and the only reason economy didn't crash is an unstoppable torrent of money from the Reserve.
2. The only limiting factor here is amount of money in the Reserve. Which is virtually unlimited. Logically, that would mean that inflation will never happen, but we live in a real world, so eventually something will happen in real world that will result in hyperinflation OR economy crash, OR both.
Now I know that you are better economist than I am, tell me if there's anything wrong with this explanation even though I've been hearing this argument from left and right for the last 12 years.
I think you're a bit off about inflation. Money supply is high but inflation only happens when money velocity is high as well. Money will enter the market as debt. The thing is low interest rates can also signal lower lending due to banks not making much of lending at these low interest rates. So if there's lower lending then thats a deflationary pressure, same with low interest rates. I think everyone isn't realizing that covid and lockdowns created supply scarcity, which causes commodities to look like there is inflation. Give it time and when the dust settles then this will be fine. If anything theyre prevent deflation from happening.
Your argument was not made.. you only speculated that interest rates could be raised.
There is a high probability that there will be stagflation in the next few years as a result of current socialist policy. The government intervention broke natural economic processes. A lot of companies should have gone bankrupt and their place would have been taken by new more efficient companies. Now there are a lot of inefficient zombie companies which drag the whole economy because theyโre eating at profits of more efficient companies.
USSR lost to US because it gave government loans to unprofitable companies. They where less efficient and produced goods which where not needed in the economy. There where tons of skipping ropes in the shops throughout the country though there was no demand for them. If the government would have allowed to bankrupt these companies a lot a people would go to more efficient market segments and made products that had demand in the market.
Right now the same is happening in the US. A lot of people go to work for inefficient companies, get salaries which are part of efficient companies profits and whatโs more, they are not enforcing efficient companies. The more time goes, the less valuable these people become. In the end the inefficient companies will still go bankrupt, but it will happen abruptly and this labour will flood the market. If they let inefficient companies go bankrupt, these people would experience soft transition. The government could have supported them with free education, so they become valuable for efficient companies. The government could also decrease taxes for the companies which would take these people as interns, so they gain new knowledge and have a salary at the same time.
Watched carefully the whole video, didnโt find an explanation. Could someone tell the time code for an analysis? What is the argument against hyperinflation?
Is it when he says that Powell will raise interest rates some time in the future?
I've heard that Tom's grandpa just got a job building the Russian Tesla factory, allegedly
Your false propaganda is leading many to a bad end. You must have missed the price changes in food, building materials, and energy.
I love the fact that you don't care about swearing on your channel ๐
If you are talking about Hyperinflation, you know it is already here. No matter how you try to package it, you will get a Reality Check whether you like it or not. I will be eating popcorn while watching MSM attempts to spin it. Here is a MSM headline: Why Hyperinflation is good for the Economy?
hey tom, maybe you shall do videos where you explain russian history and eastern european economics or perhaps talk about austrian economics? I know its tempting to make videos that include trending keywords like hyperinflation, but a more in-depth video on little topics regarding hyperinflation would be lit.
Always love you Tom because of your no nonsense facts and never hype
Our monetary system is a junkie… Desperate for his next fix of money printing…
Big week in the market this week, loads of fundamentals from all over the world that will have a high impact on the market. โฃ
Good job comrade. Keep them in the dark. Don't let them come even close to seeing the true picture ๐๐ผ
Dude the US is OVER LEVERAGED which means we all know Powell canโt risk raising rates that blows a huge hole in your non explainable explanation. Hyper inflation is very real and itโs a way to kill the US Dollar. Wonโt be long till they start pitching a new monetary system to us. You sound like my former coworkers that thought Lehman brothers would never go bankrupt. Yes the US can and possibly could go bankrupt.
โThereโs a higher chance of my grandfather getting a job at the Russian Tesla factory that doesnโt exist…โ ๐๐คฃ๐๐คฃ
That CRP channel is just ridiculous. Super arrogant dude calling you arrogant? My goodness what an idiot and his other videos areโฆ.well check out the titles, not gonna help his view count any further.
wouldn't raising interest rates possibly make the us default because of the insane debt???
Raising interest rates does nothing to inflation.
If people spend less then business produces less. Less production means less hours for workers which means people have less money to spend which furthers the cycle.
Itโs all about supply and demand. As long as supply can keep up with demand thereโs no inflation.
COVID caused a lack of supply but the demand didnโt change much for most things which caused inflation.
Hyperinflation is just a word that salty Trumpsters using to shame the current administration
In WW1 do you think they were Worried about inflation, World War II, Korean War, Vietnam war, those generations paid a big price, and weโre worried about paying a big price because of inflation, everybody should put themselves in check
With the US basically sending stimulus checks for a huge chunk of the population, the logical consequence is high increase in inflation. The inflation numbers right now are clearly flawed, and even though the FED stops the cocaine hit on the economy, banks will just eat your money away overtime, either way a break is necessary for a healty turnaround of the economy. Last century, the Austrian school of economics already showed how FIAT currency is a cancer that helps who's in power at the expense of the majority of the population, and with time your money, my money, our money will worth less and less.
I love you, Tom, you are the super few youtube producers who are still genuine, honest, and true for their origins, I am super sad to see a lot of finance gurus who is not really doing or continuing their legacy and making same contents as they did, they fully changed or get drunk from money or fame ๐ not sure the reason, but I just love you for your core values! thanks.