Inflation? Hyperinflation?

"You would think investors would demand more of an inflation hedge if the threat of hyperinflation was real."

Do you mean like they should have demanded more of a risk premium on sub-prime mortgage backed securities? =)

Yeah, but have you seen the value of Gold versus the US dollar lately?

Here's some historical stats, rounded:

April 99 - $300
April 00 - $290
April 01 - $280
April 02 - $300
April 03 - $350
April 04 - $400
April 05 - $430
April 06 - $720
April 07 - $700
April 08 - $1,010
April 09 - $900
Source: http://www.kitco.com/charts/popup/au3650nyb.html

If you see the last four years, that's a big spike. Gold is the biggest investors hedge since the birth of capitalism, and if it's tippled in value in just four years, that sounds like a run to it. If that's the case, then is hyperinflation possible?

Chris,

TIPS can not forecast future inflation. You must be referring to the TIPS yield curve being 1.4% on average. The number is the real return after inflation, not forecasting the inflation.

Michael
http://www.mzcap.com

Remember, we are not just talking about inflation here in the US, but inflation globally. There are other countries that are pumping their economies mattresses full of cash.
Just think of what cooperative inflation is going to look like revealed in oil, food prices, etc..
We are in a disinflation period now, but in the next 1-2 years, we will see the pendulum swing towards global inflationary pressures, and possible hyperinflation for America.

Chris,

I might agree with you if :

- so many Americans hadn't borrowed so much money, unable to pay it back.
- the U.S. housing market wasn't messed with in unscrupulous ways by certain big banks and Gov. officials.
- the U.S. Govrnmnt. still had precious metals to back the dollar.
- America had it's industrial base which was lost years ago.
- The Fed wasn't manufactuering so many paper $$$'s with no real backing.
- trillions of $$$'s weren't cast out on a whim with hopes that they may actually fix something w/o the Gov.really knowing.
- the U.S. was still in control of oil.

We as a nation were fiscally leading the world in the late 40's,50's and 60's. That's not the case NOW.Until we make REAL changes, we're only fooling ourselves.

Unfortunately as to where the U.S. is now, I don't think that there are any definitive answers to back up your point.

Chris,

I might agree with you if :

- so many Americans hadn't borrowed so much money, unable to pay it back.
- the U.S. housing market wasn't messed with in unscrupulous ways by certain big banks and Gov. officials.
- the U.S. Govrnmnt. still had precious metals to back the dollar.
- America had it's industrial base which was lost years ago.
- The Fed wasn't manufactuering so many paper $$$'s with no real backing.
- trillions of $$$'s weren't cast out on a whim with hopes that they may actually fix something w/o the Gov.really knowing.
- the U.S. was still in control of oil.

We as a nation were fiscally leading the world in the late 40's,50's and 60's. That's not the case NOW.Until we make REAL changes, we're only fooling ourselves.

Unfortunately as to where the U.S. is now, I don't think that there are any definitive answers to back up your point.