Inflation is turning hyper, by Alasdair Macleod

Governments have no solutions to their food and energy crises other than more debt. Look for Covid-style debt and monetary expansion to those crises, which will only exacerbate inflation. Look for economic contraction as banks curtail lending. From Alasdair Macleod at goldmoney.com:

Money supply took off during covid lockdowns. It is now about to take off again to pay everyone’s energy bills. But that is not all.

Demands for currency and credit to be conjured out of thin air to pay for everything will be coming thick and fast. Expectations that energy prices, including European electricity, have peaked are naïve. Putin has yet to put the winter and spring screws on Europe and the world fully. It will be surprising if global oil and natural gas prices in Europe are not significantly higher on a twelve-month view. And Europe has messed up its electricity supplies — that is where the energy costs will rise most.

Bankers are trying to reduce their loan exposure to rising interest rates, undermining GDP. Besides paying for everyone’s energy bills, rescuing troubled banks, collapsing tax revenues, and difficulties in selling government debt on rising yields, governments are expected to apply economic stimulus to support both their economies and financial markets.

Furthermore, this article points to evidence as to why the expansion of central bank credit has a far greater impact on prices than contracting bank credit. The replacement of commercial bank credit by central bank credit will have a far greater inflationary impact than the deflation from bank credit alone.

Attempts to rescue the American, European, and Japanese economies by replacing commercial bank credit with central bank credit will probably be the coup de grace for fiat.

We can begin to anticipate the path to the destruction of purchasing power for all fiat currencies, not just those of Zimbabwe, Turkey, and Venezuela et al. A global hyperinflation is proving impossible to avoid.

First it was covid, now it is energy… 

For the magic money tree, its exfoliation is just one thing after another…

Having recognised the impracticality of putting price controls on Russian gas and oil, the EU is turning to protecting all households and businesses from the energy crisis. Even Switzerland, and now the UK are bowing to the inevitable consequences of combining inflationary monetary policies of recent years, environmental wokism, and frankly irresponsible energy policies with the decision to sanction the world’s largest energy exporter.

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