USD Hyperinflation: A possibility?

[Abiky]

With rising economic uncertainty in the US, many are wondering if we're already in a recession. Donald Trump's tariffs have further exaberbated the problem, raising the possibility for higher inflation rates in the long run. Not the US is getting affected by Trump's economic policies, but other countries too (China, Canada, Mexico, etc). President Trump promised the pain will be short-lived, but what if the damage is irreversible in the long run?

This makes me wonder if hyperinflation will take over America soon. The USD is still the world's leading reserve currency, though. However, rising "de-dollarization" efforts could put America in jeopardy soon.

Thoughts?

[viljy]

Inflation is quite possible. The dollar is already declining against other currencies. By the way, the best indicator is the gold price, which has updated its ATH. Or another very illustrative example, when the ruble rises against the dollar at a low oil price. However, Trump needs a cheap dollar if he intends to revive production in the United States, as well as in order for money from financial markets to flow into the national debt. However, there is a danger that when the dollar inflates, large holders of treasuries will simply start selling them, for example, Japan (the largest holder of treasuries) or China. Such a scenario would certainly increase the risk of hyperinflation.

[Japinat]

Hyperinflation is unlikely, because if it were to happen, most of the world would struggle alongside it. Think of it like Bitcoin crashing and dragging down the entire altcoin market. That’s essentially how the USD operates as the dominant global currency right now. So while hyperinflation is technically possible, the chances are practically zero, closest to it is only "inflation".

[moneystery]

....

This makes me wonder if hyperinflation will take over America soon. The USD is still the world's leading reserve currency, though. However, rising "de-dollarization" efforts could put America in jeopardy soon.

Thoughts?

tariffs are already the worst decision of trump which could have a negative impact on the us economy and cause higher inflation.. and coupled with the decision of the brics countries to dedollarize, it will affect the value of the usd. but it will not cause hyperinflation-- basically that is just a worst case scenario and it just won't happen.. because right now the us  position as the world's leading reserve currency is still immensely strong regardless of the global economic and political turmoil.. and the us economy is still the largest in the world, they are still strong enough to be able to face the economic challenges ahead.

[Apocollapse]

I think it won't because we can call it's hyperinflation if the price of goods and services rise at least 50% in a month. 10% is already high though, in US the inflation rate is just around 2%-4%.

Yeah the tariffs will affect almost every countries, but I don't think their inflation would hit 50% even for short term.

Other countries can use other currency to trade globally e.g. Bitcoin, they no longer need to stick with Dollar, de-dollarization will happen.

Hyperinflation is a severe economic condition characterized by an extraordinarily rapid increase in prices, typically defined as an inflation rate exceeding 50 percent per month.

[Ziskinberg]

This makes me wonder if hyperinflation will take over America soon. The USD is still the world's leading reserve currency, though. However, rising "de-dollarization" efforts could put America in jeopardy soon.

The US is still the top dog in the world, but the competition is tight - especially with China. So, right now, it's all about strategy, and the US will do whatever it takes to stay on top. It's not just about who has the strongest economy but also about alliances, and the US has been building those up for years to keep its power. Sure, Trump messed up by picking fights with the wrong countries, but I still think the US will stay the strongest. Yeah, inflation might go up, but it won’t spiral out of control like hyperinflation.

[Don Pedro Dinero]

I think it won't because we can call it's hyperinflation if the price of goods and services rise at least 50% in a month. 10% is already high though, in US the inflation rate is just around 2%-4%.

<...>

Hyperinflation is a severe economic condition characterized by an extraordinarily rapid increase in prices, typically defined as an inflation rate exceeding 50 percent per month.

That's right, I'll bet the OP didn't know that definition when he opened the thread. You can have very high inflation without getting anywhere near hyperinflation. Furthermore, if we assume that hyperinflation continues for one year, at a minimum 50% monthly price increase, this would mean an annual increase of 12,874.6%. The 10% annual (official) inflation rate of a couple of years ago is nothing compared to this.

[STT]

Hyperinflation has been said to not occur except on purpose, its some extreme measure that has become a common term.  We'd have to be losing half the value of money every few months or similar, it wont be that extreme unless it was done on purpose.   What is already true is there is too much debt stored up for the productive yield to pay off sensibly, those words are bad enough without mentioning hyper.

What could be true without exaggeration is that the cost of serving debt for US treasuries exceeds all of the fiscal budget.  That is it could take all taxable revenue just to pay interest, that would involve suspension of all spending especially defense and military which is particularly expensive.   Before that occurs probably some sharp measures are taken first, many involuntary but this is a process seen elsewhere in other governments and countries.
 The only new part would be that it does not usually occur to the worlds primary reserve currency, so people do speculate this first will change and be part of the process of change.

[Abiky]

Inflation is quite possible. The dollar is already declining against other currencies. By the way, the best indicator is the gold price, which has updated its ATH. Or another very illustrative example, when the ruble rises against the dollar at a low oil price. However, Trump needs a cheap dollar if he intends to revive production in the United States, as well as in order for money from financial markets to flow into the national debt. However, there is a danger that when the dollar inflates, large holders of treasuries will simply start selling them, for example, Japan (the largest holder of treasuries) or China. Such a scenario would certainly increase the risk of hyperinflation.

Everything is going down. From the stock market, to the crypto market, everything is in the "red zone". Investors are panic selling as they move their capital into Gold instead. Even Bitcoin is affected. Be aware that a weaker US Dollar, will greatly increase odds of losing its position as the world's reserve currency. Trust in the US will be lost, paving the way for a new superpower to take over the world.

All in all, I believe hyperinflation under Donald Trump is now a possibility. Only if the tariffs strategy fails in the long run. Would you imagine the USD's inflation going as high as Venezuela's Bolivar? It would be a complete disaster. Hang on tight as this is going to be wild ride.

[Darker45]

That's the worst-case scenario which I think is far from happening to the US. Trump doesn't totally control the US alone. I'm sure sane people around him will tell him to stop when he's already pushing the economy to the brink of collapse.

He's just started his second presidency. He's in the heat of implementing whatever he has in mind. So far, there were reconsiderations, step-backs, suspensions, and whatnot. All this shows that he isn't impervious to recommendations and suggestions. His team listens, bargains, negotiates, and so on.

I'm sure alternative policies and approaches and deals are explored way before a hyperinflation ensues.

[SilverCryptoBullet]

This makes me wonder if hyperinflation will take over America soon. The USD is still the world's leading reserve currency, though. However, rising "de-dollarization" efforts could put America in jeopardy soon.

Thoughts?

Hyperinflation already happened in the USA since pandemic. You can see how their government and central bank printed massive money and dump it to the USA money supply since Covid-19.

Since the pandemic, USA printed nearly 80% of ALL US Dollars in circulation, that makes a 375% jump in 3 years.

Is this jump big enough to call as hyperinflation?

Below is a chart of the US money supply.

Since 2020, the US has printed nearly 80% of ALL US Dollars in circulation.

To put that in perspective, at the start of 2020 we had ~$4 trillion in circulation.

Now, there is nearly $19 TRILLION in circulation, a 375% jump in 3 years.

We are paying the price for trillions of Dollars that were printed seemingly overnight.

Why is the Fed surprised that inflation hit a 40-year high?

[viljy]

Inflation is quite possible. The dollar is already declining against other currencies. By the way, the best indicator is the gold price, which has updated its ATH. Or another very illustrative example, when the ruble rises against the dollar at a low oil price. However, Trump needs a cheap dollar if he intends to revive production in the United States, as well as in order for money from financial markets to flow into the national debt. However, there is a danger that when the dollar inflates, large holders of treasuries will simply start selling them, for example, Japan (the largest holder of treasuries) or China. Such a scenario would certainly increase the risk of hyperinflation.

Everything is going down. From the stock market, to the crypto market, everything is in the "red zone". Investors are panic selling as they move their capital into Gold instead. Even Bitcoin is affected. Be aware that a weaker US Dollar, will greatly increase odds of losing its position as the world's reserve currency. Trust in the US will be lost, paving the way for a new superpower to take over the world.

All in all, I believe hyperinflation under Donald Trump is now a possibility. Only if the tariffs strategy fails in the long run. Would you imagine the USD's inflation going as high as Venezuela's Bolivar? It would be a complete disaster. Hang on tight as this is going to be wild ride.

I don't think there can be a new superpower instead of the United States. The dollar will one day cease to be a reserve currency, but it will not be replaced by some national currency of another power. Probably, the new world currency will be based on a different principle, and even, perhaps, not on the debt principle. But that's still many decades away. In the meantime, the flight to gold is obvious. But I suspect that bitcoin will not be ignored by investors either, because gold has one important nuance.

An investor should possess only physical gold, but mostly "Paper Gold" is traded, which is already as much as there is not in all combined gold mines and deposits on our planet. How will these obligations be covered? Gold, no way. But with bitcoin, such manipulation is impossible.

[Don Pedro Dinero]

Hyperinflation already happened in the USA since pandemic. You can see how their government and central bank printed massive money and dump it to the USA money supply since Covid-19.

No, it hasn't happened. You wouldn't have made that statement if you had cared to know what hyperinflation is but also it was as easy as reading what Apocollapse wrote or what I wrote instead of just reading the OP and rushing to write your response without reading the discussion after the OP.

[cabron]

US will not struggle because they can print USD. Even if they print more and more they will still have the USD being used by many countries. Hyperinflation is very possible upon printing trillions as they are already saying US has been in recession for months. They are just not saying it.

I'm sure when the country is in hardship, the citizen can feel it especially the poor and the middle class while there is a mass layoff. If they are allowing shop lifting as long as they only get less than $1000, there really is a problem in the country.

[peter0425]

With rising economic uncertainty in the US, many are wondering if we're already in a recession.

It is not worrying yet as US is not completely in a recession yet. Their GDP is not as bad as people might think but a lot of people might see warning signs of recession already.

This makes me wonder if hyperinflation will take over America soon. The USD is still the world's leading reserve currency, though. However, rising "de-dollarization" efforts could put America in jeopardy soon.

Thoughts?

US might not be in their best situation right now but certainly not the worst and they would not collapse immediately tomorrow. The dollar is still quite strong despite diminishing value. They can still control their economy. If they continue to make stupid decision then they really will be in trouble.

[slapper]

Good instinct. But hyperinflation? No. Not now. Not even close. The US is inefficient, yes. It's not Argentina, though. Since no other suit fits (not because it's acquired legitimacy), the USD still wears the reserve crown

We are currently witnessing the slow and steady fall of global monetary power. It wasn't Trump's tariffs that caused this. They just accelerated a world already tilting toward multipolarism. Tariffs breed inefficiency. Inefficiency breeds inflation. And in this context, inflation becomes more about existential hedging than about supply chains

China’s stockpiling gold. Russia’s de-SWIFTing. BRICS is talking about a currency backed by commodities. These aren’t “de-dollarization efforts”. These are contingency plans, the geopolitical version of people purchasing bottled water before the storm

Will that storm become hyperinflation? Probably not. But a more divided reserve system? A gold-backed BRICS credit pool? USD losing some pricing power in key trade corridors? Absolutely possible

Keep in mind: money is a trust contract wrapped in collective mythology. Once that narrative frays, it doesn’t snap, it melts

And when myth melts, metals rise

[Abiky]

I don't think there can be a new superpower instead of the United States. The dollar will one day cease to be a reserve currency, but it will not be replaced by some national currency of another power. Probably, the new world currency will be based on a different principle, and even, perhaps, not on the debt principle. But that's still many decades away. In the meantime, the flight to gold is obvious. But I suspect that bitcoin will not be ignored by investors either, because gold has one important nuance.

An investor should possess only physical gold, but mostly "Paper Gold" is traded, which is already as much as there is not in all combined gold mines and deposits on our planet. How will these obligations be covered? Gold, no way. But with bitcoin, such manipulation is impossible.

Will that "new world currency" be Bitcoin? We've seen institutional investment companies buying BTC like crazy, while governments are planning on adding BTC to their reserves. El Salvador became the first country to adopt BTC as legal tender, while others are exploring the possibility of doing so. Maybe there's a chance BTC will become the world's reserve currency in the future?

As for the next superpower that will take the US' reign, I think either China or the EU will "fit the bill nicely". I mean, empires can't last forever. And with Donald Trump's actions (especially the on-going trade war), we're seeing American decline accelerate at a fast pace. Countries are now laser-focused on moving away from the USD. The uncertainty surrounding the FED's independence, adds more fuel to the fire. So yeah, there will be another superpower that will replace the United States in the future. I should only be a matter of time before this happens. Just my two sats.

[Fortify]

With rising economic uncertainty in the US, many are wondering if we're already in a recession. Donald Trump's tariffs have further exaberbated the problem, raising the possibility for higher inflation rates in the long run. Not the US is getting affected by Trump's economic policies, but other countries too (China, Canada, Mexico, etc). President Trump promised the pain will be short-lived, but what if the damage is irreversible in the long run?

This makes me wonder if hyperinflation will take over America soon. The USD is still the world's leading reserve currency, though. However, rising "de-dollarization" efforts could put America in jeopardy soon.

Thoughts?

Nothing seems impossible right now with Trump at the helm, after all - he's hinted at wanting to takeover allies Canada and Greenland, which is an unthinkable and disgraceful statement for a US president to make. The US dollar is the reserve currency of the world, so it is probably the least likely currency to undergo hyper inflation because there is so much of it in use right now. But it is certainly weakening due to the erratic nature of government, which has never been encountered to this degree and with such a cult like cowering of all other Republican party members. While the dollar has taken a big dent, it is very unlikely to ever suffer from hyperinflation but it could suffer from a much smaller type of inflation.

[takuma sato]

This makes me wonder if hyperinflation will take over America soon. The USD is still the world's leading reserve currency, though. However, rising "de-dollarization" efforts could put America in jeopardy soon.

Thoughts?

Hyperinflation already happened in the USA since pandemic. You can see how their government and central bank printed massive money and dump it to the USA money supply since Covid-19.

Since the pandemic, USA printed nearly 80% of ALL US Dollars in circulation, that makes a 375% jump in 3 years.

Is this jump big enough to call as hyperinflation?

Below is a chart of the US money supply.

Since 2020, the US has printed nearly 80% of ALL US Dollars in circulation.

To put that in perspective, at the start of 2020 we had ~$4 trillion in circulation.

Now, there is nearly $19 TRILLION in circulation, a 375% jump in 3 years.

We are paying the price for trillions of Dollars that were printed seemingly overnight.

Why is the Fed surprised that inflation hit a 40-year high?

But that was a very specific point in time. In all honestly, what were governments supposed to do? just let everyone go bankrupt? if there was a time to do that, then it must have been that one. If you have to close businesses for a major cause that is beyond your responsibility, then that is were governments should step in. We would have seen a bigger disaster if everyone was just left there with no help. Now you could argue if the lockdowns were necessary or not. Im not an expert in this field so I will not comment on that. What i'll say is that in any case, governments did not explain that there is no free lunch, and all that money printing would need to be paid back in one way or another, and now we are seeing the results, even if they try to paint it as if it's not the lockdown moneyprinting that caused most of the inflation (they would aim at whatever what was going on at the time like the russia invading ukraine). But now we are seeing deflation, so Powell did a good job lowering inflation. We will see what happens next.

[l99l]

The possibility of USD hyperinflation, I generally see as a low probability in light of economic theories and historical examples.
Global trade is shifting to other currencies, the Dollar is no longer as strong as it used to be, and this is a fact, the demand for the Dollar is decreasing every day.
With Trump's tariffs, the demand for the Dollar is decreasing even more. The tariffs have triggered uncertainty and fears of a trade war in global markets. This has called into question the safe haven status of the USD.