Hyperinflation?
Monday, July 16, 2012 at 5:00AM 
There are two viewpoints in the "hard money" school of economics—one predicts inflation, the other predicts depression. I think they are both right, and wrong. I think stagflation is the most likely outcome. But as Yogi Berra said, "The future is hard to predict because it has not happened yet." When the crisis comes in 3 to 7 years, I cannot begin to predict which option the "powers that be" will choose.
The blog post for today is an interview I saw from a member of the hyperinflation school—John Williams from shadowstats.com. He points out in this clip that while inflation is currently calculated at 2%, if the same method was used today as was used in 1990, the inflation rate would be 5%. If the same method that was used in 1980 was used today, inflation would be 7%. There is an almost constant pressure on the average person as their income is not going up by 7% a year.
Personally I expect "modest" inflation in the 10 to 20% range while unemployment goes up. I know this is supposed to be impossible based on the Phillips Curve, but I think it will happen.
Yes there are people who are more pessimistic than me! Here is one:
Economics 
Reader Comments (1)
It also means that if inflation were calculated at the 1990 method, applying the deflator to GDP would mean our economy is contracting at a 3% annual rate.
I haven't done any research, but I know the classic quote attributed to Yogi is, "It is tough to make predictions, especially about the future." Maybe this is not right. Abe Lincoln said to be suspicious about quotes on the internet.