Jack Dorsey, CEO of Twitter, recently Tweeted that “Hyperinflation is going to change everything. It’s happening.”
Steve Hanke, professor of applied economics, told David Lin, anchor for Kitco News, that the term “hyperinflation” is not being used correctly in this case.
“People play fast and loose with language and words like hyperinflation,” he said. “What [Dorsey] was trying to express, I think, is that inflation was going to be a lot higher in the United States than it is at present. It’s running at about 5.4%. He finally clarified himself and said well, maybe it’s going to go up 15%.”
Hyperinflation, in the strictest sense of the word, implies consumer goods prices appreciating by at least 50% a month, or 12,874% a year.
When Yugoslavia experienced hyperinflation in the order of 300 million percent a month in the 1990s, citizens exchanged local currency for Deutsche Marks as soon as they could to survive, Hanke said.
On cryptocurrencies, Hanke welcomed the idea, and said that Dorsey at the helm would be a net positive.
“If this kind of cryptocurrency board was put in and if Dorsey was the chairman, believe me, that thing would take off to the moon,” he said.
For more information on inflation in the U.S., watch the video above.
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