Is hyper inflation on the way?

Chinese can't sell their USD holdings in any great amount because:
- selling would depreciate the USD making their remaining holdings worth less
- it would mean an appreciation of the RenMinBi which they don't want as it would reduce Chinese competitiveness.
- depreciation in the USD would reduce demand for their produce from the US
They're more likely to diversify away from US Treasuries, which they have been doing (albeit not successfully).

Question:
- Is the USD going to depreciate against the EUR? Was considering investment in US company but realise that there's significant currency risk due to the FED and their quantitative easing.
 
I'd say the risks have passed in general, system has stablised, manufacturing is coming back up again in Asia, stockpiles have cleared in many industries, layoffs have already been done overall...pent-up consumer demand will return just at a reduced pace to previously.

I don't see hyper-inflation happening, the Chinese won't offload their USD at this time...look at the way they controlled the reminbi for years, they are not into big changes, too risky...it will be a measured thing over many many years and I'd see the US coming out of recession as early as end of this year....

If you are going to invest, invest in China, Taiwan, Thailand, Korea...also some Japanese companies.
 
Which countries are in debt up to their eyeballs and which aren't....it's common sense really. Sure Asian countries have a lot of pain going on too but their fiscal situation is much better.
 
I know Jim Rogers is all on for investing in China, but the Chinese stock market is a casino. Honk Kong would seem like the best place to invest as they have the access to the Chinese market.
 
I.M.E. said:
I know Jim Rogers is all on for investing in China, but the Chinese stock market is a casino. Honk Kong would seem like the best place to invest as they have the access to the Chinese market.
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When you think about it all stock markets are casinos. In fact, when people say they are investing on the stock market what they are really saying is they are gambling on the stock market.
 
Airtight said:
Is hyper inflation edging closer?
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Not for Ireland or the Euro where the currency is too strong and deflation is the current driving force (although low inflation was report this past month).

Hyperinflation is a distinct possibility in the US or UK where the appauling government intervention of quatitiative easing, bloated government and currency debasement are occurring.
 
How does some one (me) profit from hyper inflation in another country, on the other side, how does some (me) loose from hyper inflation in another country i.e. UK & US
 
Airtight said:
How does some one (me) profit from hyper inflation in another country, on the other side, how does some (me) loose from hyper inflation in another country i.e. UK & US
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Short their currencies?!

The way to loose from hyperinflation is to own any sort of asset in a country prone to hyperinflation. Stocks and property will soar in value in a hyperinflation economy however the debasement of the currency is always far greater than the potential gain you will make from the capital increase.

If you live in a country prone to hyperinflation then the one positive would be that your mortgage would be reduced to virtually nothing but your property most likely will have fallen in value in 'real terms'.

Marc Faber in Tomorrow's Gold writes a great chapter on inflation. From what I remember he says to avoid hyperinflation economies at all costs. However I think he said that if you invest in an economy post hyperinflation occuring you can make some excellent returns as the currency rises again.

I have punted a small sum into a UK AIM firm that invests predominantely in Zimbabwe's recovery. This could be a ten bagger IMHO. Then again it could be a high risk play and fail.

Not one to stake all of one's wealth on but could be a great 10 year hold.
 
that was great insight into this problem @sunrock (and it is a global issue). i think a really scary thought is what if the u.s. dollar is no longer accepted as the "de facto world currency" especially with the rate they're printing the dollar....just some food for thought
 
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