Markmax33, I’m afraid that, in general, you are making overly sweeping generalizations based on too little, or simply weak, data. You may be right that hyperinflation will hit the US based on the clearly above-trend rate of increase in the money supply lately. But so far the recessionary factors have overwhelmed the monetary stimulus and we still have a deflationary environment–especially in wages and asset prices. Deleveraging is continuing in the balance sheets of most businesses and households, and it is a powerful force.
Yes, history shows an often sorry record for fiat currencies, esp. when politics and short-term oriented, politically attractive demagogues get control. But the $ is a fiat currency and is still strong by most measures relative to other currencies.
I certainly don’t know what the future holds for inflation here, but I have given up on strict monetarism, which I used to preach. Got tired of being wrong predicting inflation due to the clearly above normal rates of increase in money supply. Too many other factors, such as changes in money velocity and financial instruments now make obsolete the old connection between money supply and prices.
What also counts is how one defines “failure” of a fiat currency. Perhaps you would call a doubling of prices every 15 years a failure. But that’s actually only a 5% rate of increase per year. If wages, prices, investment returns, etc. went up at that same annual rate I think we could adjust to that. Back in 1980 we would have called that heaven. As monetarist Milton Friedman pointed out, it is big changes in inflation, either up or down, that does harm because some groups do not adjust fully or fast enough.
Relating all this to the housing price booms of the late 1970s, late 1980s, and late 1990s, those investors who jumped in and bought in mid-decade made out very well. It is interesting how the price decline or leveling out happened at roughly the first half of the following decade. Timing is everything.
