Inflation is not over yet despite lower CPI, long-term “moderate hyperinflation” is coming – Nathan Lewis

The latest main consumer price index (CPI) declined slightly from the previous month, coming in at 8.5%, compared to June’s reading of 9.1%.
Despite a lower CPI reading, inflation is likely to persist over the long term, according to Nathan Lewis, editor and author of the Polaris Newsletter.
“We may have another cycle of currency devaluation, currency debauchery, which has been going on intermittently since 1971, when we left the gold standard. The dollar’s value today is about 1/50 to gold compared to what it was back then, so we’ve been playing this game for a long time. We may have another act in the comedy coming soon. I think we should probably expect that, which would be more inflation, ”Lewis told David Lin, Anchor for Kitco News.
Lewis has published five books, including his gold trilogy, The Magic Formula, and his latest work with Steve Forbes and Elizabeth Ames, entitled “Inflation: What It Is, Why It’s Bad, and How to Fix it”.
In the short term, inflation could stabilize somewhat, Lewis noted.
“I think we’re likely to see a drop in CPI numbers,” he said. “I think we could see a substantial increase in energy and food prices due to supply and demand problems for energy and food.”
Past recessions have always coincided with a decline in inflation, and Lewis said this current technical recession the economy finds itself in may be no different.
“I don’t see many obvious reasons why prices go up drastically, I see a number of reasons why they moderate. The housing market is clearly falling, quite substantially. The job market looks pretty tight for now, but recessions mean more unemployment. Indeed, this is the Fed’s grand plan, true, to create enough unemployment to bring prices down. They keep talking about it. They will probably get what they want, ”she said.
Hyper inflation
In his book “Inflation: What It Is, Why It’s Bad, and How to Fix it”, Lewis wrote that “I personally think we will eventually end up in moderate hyperinflation, of the kind common in Latin America in the 1980s.”
Lewis said the academic definition of hyperinflation is a 50% month-over-month rise in consumer prices is not the only definition that can be used, citing the International Accounting Standards Board (IASB) interpretations of “hyperinflation”.
“There is a definition of hyperinflation by the International Accounting Standards Board and it is basically a 100% increase in CPI over the course of three years, which is actually about 28% per year. 28% is like, 2% per month, it doesn’t seem very hyperinflationary to me, but this came from the experience of real companies in real hyperinflationary environments, and that was the word they used, they used the word hyperinflation, “he said.
Lewis cited examples of companies that had to adopt this definition of hyperinflation to adjust their accounting standards for rapidly rising prices in the jurisdictions in which they operated.
“Coca-Cola was in Mexico in the 1980s … Pfizer was selling drugs in Chile in the 1970s. They had to do the accounting and they said ‘what the hell do we do? The prices of everything are going up, we don’t know what is what, “she said.
Lewis said inflation levels even lower than what he calls hyperinflation may already be enough to severely damage the economy.
“I suggest that right around that point, right around that 20% plus the CPI reading, that’s when things fall apart,” he said.
Hyperinflation will occur when the government runs out of money and is forced to create more money, Lewis said.
“Hyperinflation tends to happen when they just have to do the payroll for the military, there is no money in the checking account, so they make money out of thin air. That’s how you get a 50%, 100% per year increase in CPI, “she said.

To find out how the gold standard can help fight inflation, watch the video above.
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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee this accuracy. This article is for informational purposes only. It is not a solicitation to trade in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article disclaim any liability for loss and / or damage resulting from the use of this publication.


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