Market Overview Analysis by Charles Hugh Smith covering: XAU/USD, Gold Futures, US Dollar Index. Read Charles Hugh Smith's latest article on Investing.com
When predicting the future, we're best served by following"what benefits the wealthy and powerful," as that is the likeliest outcome.
The consensus holds that there is no way to stop this decay of purchasing power to near-zero, i.e. hyper-inflation, once it starts. As in a Greek tragedy, the fatal flaw of the protagonist--in this case, fiat currency--leads inevitably to its destruction. The poor owe debt, the wealthy own debt: debt is an asset to the wealthy, who buy the loan for its income stream, while debt is a liability to the commoners that must be serviced out of their earned income.
At this juncture it's important to draw a distinction between ancient examples of hyper-inflation and the present-day economy. In the declining era of the Roman Empire, the government drastically reduced the silver content in the coinage to generate the illusion that everyone was still being paid in full with only a fraction of the silver contained in old coinage.
Wiping out the value of the nation's currency also destroys its value as a reserve currency and in global trade, two additional disasters the wealthy and powerful would seek to avoid at all costs. If we tote up the winners and losers of hyper-inflation, the commoners who owe debt win as long as wages rise with inflation, while the wealthy and powerful lose out.
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