I’ve been fending off arguments about ensuing hyperinflation for the better part of 4 years now. Ever since the Fed began expanding their balance sheet the hyperinflationists have been out in force arguing about how this expansion in reserves would lead to banks lending more and money firing out into the economy like it’s being shot out of a water cannon. Of course, that never happened, but the hyperinflation predictions continue nonetheless.
There has been lots of talk from both sides about who is right and who is wrong. And while the hyperinflationists have been dead wrong for 4 years now, they’re relentless in claiming that it’s still coming. Well, my friend and fellow MMRist Mike Sankowski is finally putting this bet into writing. He says:
“If you haven’t dug into the comments section over the last month or so, team MMR is having a long standing debate with vincent about hyperinflation.
I don’t think there is any chance of hyperinflation. So I decided to go on the record, with a public statement about hyperinflation.
Longbets.org is a great site, and it’s part of the long now foundation. The Long Now foundation is creating this very cool clock which will keep time for 10,000 years. Very cool. I saw Eno and Hillis in London at a discussion on the long now, and that was fantastic.
Here is a link to the prediction: Inflation prediction
The prediction is being reviewed by the long bets staff as of 8:15am Chicago time on 4-25-2012.
vincent is sharp, and so far the discussion has been polite. We’d like to keep it that way!”
So there it is. This one will no doubt get rubbed in someone’s face at some point in the next few years so it should be fun to watch. And if the hyperinflationists win, well, I plan on being the first inhabitant of Crusoe Island where the USD is not the currency of choice. :-)