The necessity for hyperinflation to evolve, in my view, would be a dollar collapse which would cause imported goods to rise dramatically in price. That is in fact the scenario that John Williams thinks is inevitably heading our way starting this year. I'm not convinced of that unless the U.S. military suffers a very severe setback, which I think is very possible. However, the Chinese and Russians have said "enough" with regard to the U.S. trying to run over them and remove their sovereignty and they have not been silent about their wish to get rid of their dollar holdings and establish a monetary system of their own to compete with the dollar.
Those are my thoughts on the big inflation/deflation debate. But what are the markets actually saying with regard to asset prices?
This week my IDW registered another new high of 159.87, up from 159.34 the week before and 156.16 at the start of this year. But except for copper that has bounced back recently, most of the gains are still coming from the equity markets which are bolstered by money creation by central banks. And now we know that governments are pumping trillions of dollars into stocks in search of yield and to try to keep markets from imploding. But again they do that by creating more debt money. Policy makers never learn from their past. They continue to carry out the same policies and expect different results. It is sheer insanity. But it is what it is so we do the best we can to protect ourselves by understanding the damage they are causing us in the process.