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Will We Get Hyperinflation? Economist Separates Fact From Fiction

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The definition of hyperinflation is a higher than 50% inflation rate on a monthly basis, for more than 30 days in a row, said Steve Hanke, professor of applied economics at Johns Hopkins University.

He noted that there currently is still insufficient money supply growth to push inflation to those levels.

“Money supply properly measured through M4…is growing at 29.5% year over year. That’s the highest rate we’ve ever had in recent history in the United States,” he said, but “that’s not even close to the amount of money explosion you would need to have hyperinflation.”

Should the Fed continue the same pace of monetary stimulus as this year, inflation will come, and at a higher rate than the central bank would like.

“Since the end of February, the Fed has jacked thins up so much that there has been a big bulge in the money supply in the United States, and that will eventually feed through to higher inflation rates. So, the idea that we’re going to have no inflation, I don’t think is correct. We’re going to have more inflation, and in fact, when that inflation reaches 3.5% to 4%, I think the Fed will get pretty nervous,” he said.

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