Rand, the word is "hyperinflation". Why does nobody ever want to say "hyperinflation"? Obviously, if we print our way out of debt to the point of ruining the currency, as Rand describes, it entails a "hyperinflation". What Rand was referring to "when the currency was destroyed in 1923" as being the catalyst for electing Hitler, that was "hyperinflation". When Rand says that we've been exporting our inflation and if it ever comes back in a crisis of confidence, that resulting "chaos" he describes is "hyperinflation". When Matt Welch slipped in a reference to "Argentina", that was an allusion to "hyperinflation". But I guess that's just too crazy to think or talk about, so let's pretend that's not what it is!
I understand as a politician not enjoying the prospect of uttering that word and being inundated with name-calling. I mean seriously, what kind of whack-job would compare the great and powerful USA to a banana republic by suggesting we might hyperinflate? It's like some kind of disease that only the lowest class people get, like HIV. Nobody wants to admit they have HIV because it implies they are either a drug addict or gay. But not saying it doesn't make it any more or less true, or the disease any less real. In fact, denial only results in lack of treatment, complications, and a hastier death.
So let's stop the denial. "Hyperinflation" is the word we need to start getting out into the public so that people realize just how bad this is going to get. It's not some dry accounting issue where bankers and politicians can work it out over lunch. And it's not hyperbole. Hyperinflation is coming to this nation, and five years is optimistic. I think it gets here before the end of 2012.
Hyperinflation means that prices double in a matter of days or even hours. All of your savings are lost. Your wage today will not buy your food tomorrow. Complex economic transactions cease. Deliveries of food, heating oil, and gasoline stop. Electricity and clean water are no longer reliable. Theft, murder, and social chaos ensue on a wide scale. Thousands or even millions of people die from starvation, disease, and exposure. Hyperinflation is more damaging to civilization than all-out war. And we are inviting it right now.
Unless we cap the national debt and balance the budget and start paying it off, hyperinflation is our destiny. And not years out, but months. Democrats and Republicans are rearranging the deck chairs on the Titanic instead of repairing the hull. Cutting a few billion off a $1.6 trillion deficit is a joke! Don't believe the hype -- this country is not unsinkable!
Not only are politicians failing to say it, but the media isn't covering it either, and
Google searches indicate that public awareness is virtually zilch. That's because when politicians and media do discuss anything related to it, they use code words instead. They avoid not only "hyperinflation", but also "monetization" and "devaluation". Instead, they make up overly technical and confusing terms like "quantitative easing". Makes it sound almost clinical. Uncle Ben can just press the "quantitative easing" button until everything gets better and then stop pressing it. None the worse for wear. Unfortunately, that's not how it works.
When the government prints money out of thin air in order to buy government debt, i.e. monetizing the debt, it causes two adverse reactions: 1) currency already in circulation is diluted, i.e. devalued, and so prices increase proportionally, and 2) you encourage the government to keep spending money it doesn't have, making them ever more dependent on borrowing and printing. And as prices rise on the things government buys as a result of their monetization, they have to print ever larger amounts to keep up!
Right now, Congress cannot agree on a measly 2.5% budget cut. They will not reduce the nearly $4 trillion budget by a mere $100 billion. If they won't do this now, how can we possibly expect them to ever make substantial cuts? We can't. Not until the shit hits the fan [SHTF]. And that will happen sooner than most people expect. Interest rates only have to rise to the level they did in 1981 for the interest on the national debt to exceed total government tax receipts. And since the government still won't be likely to reduce spending, that means that our deficit will be bigger than total income and therefore impossible to pay off. Interest rates will continue to climb, trying to front run inflation. The government will be forced to monetize ever more just to keep paying the interest! This vicious cycle progresses mind-numbingly fast, resulting in prices rising thousands or millions of percent. It has happened dozens of times before in countries all across the globe. And now it's coming here.
It's time to recognize that fact and to start talking about it. I know that Rand Paul understands the concept of hyperinflation. It's time to say it.