The US Fed must be envious. The Fed has been trying to create inflation in the US for five years and failed miserably. They should go to Venezuela to see how inflation, and even hyperinflation, is created and then decide if we really want that.
Surprise! Venezuela, the world’s most miserable country (according to my misery index) now has inflation of over 700%, compared to over 300% last year. Well, at least that’s growing. Everything in Venezuela is falling apart. People have no food. They are now eating from garbage dumps. They stop and raid trucks with food going to the cities. It’s terrible.
In the west, central bankers are desperately trying to create inflation. Venezuela’s socialism has shown the reality of taking money from the producers in society and then squander it. Tax rates in Venezuela are up to 90%. Anyone who wants that in the US should vote for Bernie.
Conclusion: Venezuela, Zimbabwe, and several other nations that got into hyperinflation teach us that when financial conditions get very bad so that only “helicopter money” is seen as a way out of the crisis, hyperinflation can start. The west is on that path, but it will take several years to get there.
Central bankers, of course, think they can stop before it gets that bad, but the pain would be too great. History shows that it is easier for central bankers to act for the short term because they will be retired when the disaster occurs.
China will probably get to something akin to hyperinflation first. A communist dictatorship is perfect for hyperinflation. It wouldn’t be the first time for China. China has had such periods before. Therefore, they are buying gold.