The Hyperinflation Hype

Talk that the U.S. is going the way of Zimbabwe or Venezuela is bunk but bunk can move markets and influence policy

- Peter Coy

We know from the past year that quite a few people inhabit alternate realities that float above the factual landscape like giant, impervious, untethered balloons. One unmoored balloon that’s reached enormous proportions recently is the specter of hyperinflation—the conviction that a reckless expansion in the money supply will trigger an endless cycle of currency depreciation and price hikes, turning the U.S. into the equivalent of Weimar Germany circa 1923, Zimbabwe circa 2020, or present-day Venezuela.

This is meme economics, so the underlying theory can be hard to pin down, but the general idea seems to be that the Federal Reserve is in league with dark forces—perhaps the Democratic Party—to destroy the nation and deliver …  something. “Hyperinflation this summer will usher in the next wave of leftist authoritarianism. There will be asset seizures and capital outflow controls soon,” paul_revere2021_4 wrote recently on Reddit’s NoNewNormal forum. Images of Fed Chair Jerome Powell maniacally printing dollar bills are all over the internet. There’s even a website called moneyprintergobrrr.com, though you shouldn’t visit it if you’re troubled by recordings of people screaming in agony.

This wouldn’t matter except that conspiracy theories have an insidious way of seeping into the real world. Fear of inflation—if not outright hyperinflation—helps explain the meteoric rise of Bitcoin. It’s behind distrust of the Fed. And it feeds congressional opposition to President Biden’s $1.9 trillion pandemic relief plan.