Total sales are rising ten percent a year in nominal terms. Surprise surprise, shadowstats estimates ten percent inflation per year if we use the measure of inflation that was used in the the 1980s. Hawaiian Libertarian reports that that is pretty much what he is seeing when he puts his money down.
So what is the true rate of inflation?
There is no one true rate of inflation, since to estimate inflation, one has to compare apples and oranges, and there is no one valid way of doing this.
But if inflation is substantially less than ten percent a year, we are consuming substantially more goods this year than last year. Do you think we are consuming substantially more goods this year than last year?
But whatever the true rate of inflation might be, it is increasing. It is not increasing fast as I expected, not increasing very fast at all. It is increasing at about two percent a year, so if this year inflation was not ten percent, but eight percent, next year it will be ten percent a year, and the year after that, twelve percent a year. The rate at which prices increase, is itself increasing.
This does not sound all that terrifying, but recall that hyperinflation begins as the collapse of a paper bubble. Everyone wakes up one morning realizing that inflation is a lot higher than they thought and will only get worse, so they all try to unload their paper at the same time for tangibles: Land in productive use, gold, ammo, guns, non perishable food items, alcohol, and suchlike, also overseas non tangible assets, paper assets regulated by solvent governments.
Only to discover that they cannot all unload their paper money at the same time.
If the rate of inflation is high and increasing, sooner or later, it suddenly starts to increase a lot faster. Suppose inflation this year was seven percent, then next year it will nine percent, which is not imminent doom. If people are not panicking today, they are unlikely to panic tomorrow. The end is not nigh. But the end, nonetheless, is in sight.
