twitterCo-founder Jack Dorsey warned that “hyperinflation” could soon hit the United States, raising concerns that Australia might suffer.
A 44-year-old billionaire CEO used a social media platform to warn 5.8 million followers about the sort of global price hike that has historically suffered. GermanyWeimar Republic and Zimbabwe in the 1920s, Venezuela, Cuba..
“Hyperinflation will change everything. It’s happening,” he said.
When quized, he doubled: “It will soon happen in the United States and in the world.”
Dorsey has warned of a major price hike in the world’s largest economy. Two months after his Square Group announced that it would take over the Australian acquisition now, it would later pay $ 39 billion to Jaguar Note’s Afterpay.
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Twitter co-founder Jack Dorsey has warned that “hyperinflation” could soon hit the United States, raising concerns about Australia’s suffering.
Global Covid supply shortages and long port delays can cause double-digit inflation, at least in the United States. This has not been seen since the long aftermath of the OPEC oil crisis more than 40 years ago.
Inflation in the United States reached 14.5% in 1980, but peaked in Australia at 12.4% in 1982 during a long drought and double-digit unemployment.
The late 1970s and early 1980s were characterized by high inflation and high unemployment, stagflation.
In both cases, former US President Jimmy Carter and subsequent Prime Minister Malcolm Fraser were defeated in the next election.
In 2021, US headline inflation rose to 5.4% in the year to September, and Labor Statistics Bureau figures show a monthly rise in energy prices of 24.8%.
Australia’s consumer price index data for the September quarter will not be available until Wednesday, when new Australian Statistics Bureau data are released, but inflation rose 3.8% annually during the June quarter.
This is the fastest pace since September 2008 during the global financial crisis, surpassing the Reserve Bank of Australia’s 2-3 percent target for the first time in 10 years.
Gasoline prices in Sydney this week are also record highs, selling at 172.2 cents per liter, compared to 172.8 cents in Melbourne, 175.7 cents in Brisbane and 180.5 cents in Adelaide (pictured is stock image).
Two months after Square Group announced that it would take over Australia’s acquisition now, Dorsey warned of a major price hike in the world’s largest economy.
According to MotorMouth data, Sydney’s petrol prices this week are also record highs, selling at 172.2 cents per liter, compared to 172.8 cents in Melbourne, 175.7 cents in Brisbane and 180.5 cents in Adelaide.
The pandemic is also pushing up the price of used cars in Australia, with average prices 36% above pre-Covid levels. Data from Moody’s Analytics for September 2021 shows.
“Limitations on the supply of cars due to a global shortage of electronic semiconductors are expected to continue to raise prices in the short term,” he said.
No wonder Australians are concerned about the October ANZ-Roy Morgan Consumer Confidence Index. This shows that shoppers are concerned about what inflation will be in the next two years.
Ryan Fersman, senior economist at CommSec, said the pressure on living expenses is now a reality.
“Record gasoline prices, soaring food prices, soaring utility bills, and soaring insurance prices each year are plagued households,” he said.
The surge in prices was a dramatic turnaround from 2020, when Australia suffered annual deflation for the first time since the late 1990s, and the country’s Covid lockdown caused a recession for the first time in nearly 30 years.
Taking up Twitter on Saturday, Dorsey wrote: It’s happening’
The consumer price index in September rose from 5.3% in August to 5.4%, comparable to the rise in June and July.
In the United States, shipping ports are struggling to keep up with demand.
The Port of Los Angeles, which handles more than half of all shipping containers arriving in the United States, suffers from significant delays in a huge line of trucks.
What is “hyperinflation”?
Hyperinflation is a term used to describe a period in which the general price of daily necessities rises excessively in a very short period of time.
Hyperinflation usually raises inflation by 50% every month.
By comparison, inflation has been around 2% annually since 2011, but has risen 5.4% in the last 12 months.
Unlike standard inflation, which measures price increases per month, hyperinflation monitors the increase daily.
However, hyperinflation usually does not occur without the first trigger, such as war, social riots, or supply shock.
Hyperinflation is usually unrelated to developed countries and is more likely to occur as a result of war, social turmoil blocking product launches, or supply shocks pushing up prices for daily necessities.
Hyperinflation seized control of the Weimar Republic in Germany after World War I and saw money being carried by wheelbarrows in the early 1920s following a harsh claim for the Treaty of Versailles, led by France.
In November 1923, a loaf of bread cost 2 billion marks, and the Germans turned to barter.
This type of economic catastrophe also struck Zimbabwe, following a forced takeover of a white-owned farm under the late Robert Mugabe and a long drought.
In this African basketball case from 2007 to 2009, monthly inflation was 2,600%.
Venezuela under Nicolas Maduro, the spiritual successor of socialist dictator Hugo Chavez, surged to 800% in 2016 and 80,000% two years later.
Cuba, which lives under long-term US sanctions, also suffers from hyperinflation.
Concerns over significant price increases have spurred demand for cryptocurrencies in many developing countries with low confidence in the government and its central banks.
Dorsey’s warning on social media is coming amid rising inflation in the United States associated with a continuing supply chain crisis.
Bob Dole, chief investment officer at Crossmark Global Investments, said high inflation in the United States is likely to last for a decade.
“Food and energy are more volatile, but that’s a problem,” he told CNBC.
“Hopefully we will start solving the problem of supply shortages, but once the dust subsides, inflation will not return from zero to two. [per cent] It has been a place for the last 10 years. ”
In the United States, shipping ports are struggling to keep up with demand. The Port of Los Angeles (pictured), which handles more than half of all shipping containers arriving in the United States, suffers from significant delays in a huge line of trucks.
Treasury Secretary Janet Yellen insisted that interest rates would return to 2% by the end of 2022, ensuring that the United States “has not lost control of inflation” on Sunday.
Treasury Secretary Janet Yellen claimed that the United States had not lost control of inflation and expected it to normalize by the end of 2022.
“I don’t think we’ll lose control of inflation,” Yellen told CNN’s show.
“Of course, we agree that Americans are experiencing periods of higher inflation than they have seen for a long time,” she continued. “And that’s clearly a concern and worried about them, but we’re not losing control.”
Yellen added that he expects inflation to return to a more “normal” rate next year, at around 2 percent.
“On a 12-month basis, inflation remains high until next year because of what’s already happening,” she said.
“But it will end in the middle of next year, and improvement is expected by the second half of next year.”
Twitter founder Jack Dorsey warns of US “hyperinflation” and why Australia should be worried
Source link Twitter founder Jack Dorsey warns of US “hyperinflation” and why Australia should be worried