From cars to timber to groceries, everything is in short supply and more and more expensive day by day. For example, Jack Dorsey, CEO of Twitter and Square, worries that hyperinflation is coming to the US
Hyperinflation will change everything. That’s what happens,” the 44-year-old billionaire tweeted to his 5.8 million followers on Friday.
Dorsey said in response to a user from Nigeria who said his country is currently experiencing 16 percent inflation, “It’s going to happen in the US soon, as well as the world.”
However, economists believe that Dorsey either exaggerates the situation or does not understand the meaning of the term “hyperinflation.”
“There have been 62 certified cases of hyperinflation in world history. Currently, no country suffers from hyperinflation,” wrote Steve Hanke, an economist at Johns Hopkins University known for his extensive research on the topic of hyperinflation.
In a tweet on Dorsey, Hanke said the Twitter CEO “should know better than tweeting irresponsible public statements.”
Dorsey responded with a violent emoji rolling on the floor and laughing.
The written definition of hyperinflation is a situation in which an economy experiences price increases that are out of control, usually more than 50 percent per month or 1,000 percent per year.
In the past decade, there have been only two cases of hyperinflation, one in Venezuela in 2016 and one in Zimbabwe in 2017, according to Hanke Krus Hyperinflation Table, a widely cited report co-authored by Steve Hanke and fellow economist Nicholas Kross.
In Venezuela, inflation reached 800 percent in 2016 and rose to 4,000 percent in 2017. The government stopped counting the following year.
Of course, the United States is nowhere near those levels. But the numbers are worrying enough to alarm policymakers. In the past 12 months, the consumer price index, a key measure of inflation, has risen by 5.4 percent, more than double The average rate of the last decade. President Biden He said in the summer He believes that rising inflation in the US is temporary. Federal Reserve Chairman Jerome Powell has also insisted for months that price increases are “temporary,” largely reflecting pent-up demand as the economy reopens.
However, one of the twelve Federal Reserve banks in the central bank system sounded the alarm for a case of non-transient inflation. Last week, Atlanta Federal Reserve Chairman Rafael Bostic warned that the rate hike we’re seeing now “will not be short” and is likely to extend into 2022 and beyond.
Bostick said in CNBC “Closing Bell” Interview last Thursday. Labor markets will not reach equilibrium as quickly as we had hoped, but demand will also remain high, and this combination meant that we would face inflationary pressures. The more I talk to people, the clearer and clearer it becomes and it will continue until 2022.”