Brice Timmons

What Effect Will Hyperinflation Have?

Hmm... I'm not going to get all the way on board with this analysis. Some poor analogies are drawn between the status of Wiemar Germany and the U.S. at present. Further, there is an underlying assumption that the economy generally is the same or similar. I think we're already seeing the first signs of hyperinflation, but not Wiemar-like hyperinflation. I would definitely go for hard assets over dollar-based paper, though. Heck, I'd convert dollars into RMB in a heartbeat. China's coastal middle-class will continue to increase their domestic consumption, thus making up for our decreasing consumption and protecting the Chinese economy. I suspect that this will allow them to hold more reserves in RMB, deflating their currency a bit as their diversification undercuts ours.