Prosperity in The Age of Decline: How to Lead Your Business and Preserve Wealth Through the Coming Business Cycles

Chapter 5A World That Doesn't Remember InflationNew Management and Investment Thought Processes Required

Our research indicates that inflation will be one of the most significant depression drivers for 2030. It won't necessarily be that hyperinflation will occur in the United States or in other major economies; however, such extreme inflation does not need to occur for us to have a significant problem.

This chapter looks at some of the potential sources and manifestations of inflation in the coming years and the dire result of this trend for both the economy and our personal well-being. Our major concern is that one of the historical consequences of prolonged inflation—namely, a significant economic downturn—will be very difficult, if not impossible, to avoid in this cycle. Inflation leads to imbalances, poor decisions, a lower standard of living, and for our purposes, severe business cycle declines powerful enough in magnitude to be called depressions.

Fortunately, inflation is probably the easiest technical fix of all the depression drivers we have thought about as a precursor to the coming Great Depression, especially since we are still in the early days. And like most things, preventing inflation is easier than ridding our economy of it once it is here. However, eradicating inflation requires a trade-off that does not seem viable at this time: sacrificing some near-term gain to avoid long-term pain. It is human nature to forestall pain in the hopes we may never have to face ...