Throughout history, inflation has been the result of the same patterns. Typically, a country becomes very profitable, and their economy is doing really well. People are prosperous, and the middle class is quite healthy. That usually continues for a while until the country starts deficit spending. The government begins to give away items for free, whether it be stimulus payments or chariot races and carnivals like during the Roman Empire. The next step involves going into debt to borrow money, similar to what we did with treasury bonds. Eventually, the government debt goes parabolic, which leads into a currency collapse and a complete lack of confidence in that currency.
Does all of this sound eerily familiar to what we are currently facing in our economy? Host Lou Scatigna, CFP® addresses our impending hyperinflation in this segment from The Financial Physician. Additionally, he discusses the parallels of our situation to the financial collapse that occurred in Zimbabwe at the start of the 2000s.