In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.The term "inflation" once referred to increases in the money supply (monetary inflation); however, economic debates about the relationship between money supply and price levels have led to its primary use today in describing price inflation.
In economics, hyperinflation is inflation that is "out of control", a condition in which prices increase rapidly as a currency loses its value. Formal definitions vary from a cumulative inflation rate over three years approaching 100% to "inflation exceeding 50% a month." In informal usage the term is often applied to much lower rates.
I think a lot of things will be much higher in price, including oil, next year or maybe later this year. But, don't confuse price with value.
If there is any economic recovery globally and the dollar is falling, we could see any possible price you want to imagine but, it would be in dollars, and not other currencies.
There are several analysts that are predicting a large drop in the dollar and that will even give the markets a boost. Using an extreme example, you could see DOW 50,000 by the end of the year if the dollar gets dumped but, while you would have seen over 40,000 more pts. you couldn't buy any more at 50,000 than now, if you sold it and probably a lot less.
The price of the DOW doesn't reflect value, just price. Oil is the same. If there is a recovery globally, oil demand will rise and with all the supply being cut now, it will cause oil to go back up for all nations but, if the dollar is falling, even if they don't pay more, we will. We could pay $1,000 a barrel or $10,000 a barrel or $1 million a barrel as that is what happens when a currency collapses.
For those who say that would crush our economy. Correct 100%. That too, is what happens when a currency collapses. The world basically moves on without you.
If that happens to the U.S. then the world will move on but much slower than before. Because we are such large consumers there is good news and bad news in that.
The countries that move on would find fewer buyers but, also less demand for copper, oil, steel, concrete, etc. and thus, they could still have profits even with fewer exports. They may not be large for years but, there are two sides to U.S. consumption. It drives up both the price of goods and the price of things to make goods with when we consume a lot.
Peter Schiff goes as far as to say the world's exporters would actually be better off without us increasing demand for raw materials so much due to our consumption.
However, just as it takes a depression for us to go from debtor nation to creditor nation, it will take a global recession at the minimum to go from a global economy dependent on us to one that isn't.
Consumption is touted as this big "cure all," but, it isn't. Production and making things faster than debt rises, is the cure all. Spending less than you earn, saving so you can spend in down times, budgeting, and sensible investing vs. "gambling" on stock moves is the "cure." Less government, not more, less government spending, not more, fewer programs not more at the federal level is what we need.
If we aren't already there then soon we will be more of a drag on the global economy than aid to it. Peter Schiff, if not right now, soon will be.
Think of it this way. You make things. I buy from you but, to keep buying from you, you have to keep loaning me money from what I pay you. To make it worse, I pay you back with devalued money so that you are even losing buying power with every new loan to me.
How long are you going to keep selling to me? You end up better off making something else and selling to somebody else or just making the stuff for "trade" and "sale" with people you buy your raw materials from.
In the last couple of years, one oil nation, Venezuela has done just that. It "trades" some of its oil instead of selling it for things it needs from nations that don't want to "buy dollars" to buy oil with and that have materials that Venezuela needs.
Iran stopped using dollars, too. It even got Japan to buy the oil it gets from Iran in Yen as well as sell in euros to other nations.
In short, there are no certainties going forward except that we have to change the way we run this nation from top to bottom.
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