There is an increasing number of investors who are afraid of rising inflation in the aftermath of the current economic crisis. The arguments are eerily similar to the ones made after the financial crisis of 2008 when investors expected an increase in inflation because all that new government debt had to be financed with freshly printed money.
The question is how would it extend to values of inflation outside the boundaries of the graph – to rapid deflation or even prolonged deflation on the one hand or to chronic inflation or hyperinflation on the other?
The US has never had chronic inflation or hyperinflation, but both those phenomena may be a political consequence of extreme wealth concentration – I recall reading that there have been countries where the top one percent received as much as 56 percent of all income. Class envy under such a situation is very likely to cause chronic inflation, as it is more acceptable to the super-rich than the complete expropriation advocated by groups like the Socialist Equality Party.
Interesting graph with quite good correlation.
The question is how would it extend to values of inflation outside the boundaries of the graph – to rapid deflation or even prolonged deflation on the one hand or to chronic inflation or hyperinflation on the other?
The US has never had chronic inflation or hyperinflation, but both those phenomena may be a political consequence of extreme wealth concentration – I recall reading that there have been countries where the top one percent received as much as 56 percent of all income. Class envy under such a situation is very likely to cause chronic inflation, as it is more acceptable to the super-rich than the complete expropriation advocated by groups like the Socialist Equality Party.