Tuesday, June 23, 2009
Erin Burnett of CNBC talks to Marc Faber about the possibility of hyperinflation in the U.S. in the years ahead. Interestingly, Faber thinks that CPI-inflation of just 10-20 percent (beginning in a few years) is what lies ahead, a far cry from Zimabawe-style hyperinflation.
His point early on about the history of inflation in the U.S. is quite good. For more than a hundred years prior to the formation of the Federal Reserve in 1913, we had effectively zero percent inflation. Since 1913, the dollar has lost 95 percent of its purchasing power, most of this decline coming since Nixon closed the gold window in 1971.