1 trillion dollars

[m3racer]

Is anyone else freaked out about the $1 trillion dollars the fed printed Friday. It seems like the government is doing everything possible to destroy our dollar. I pray the Fed is right on this gamble or else we're completely screwed. Hello hyperinflation! The US dollar will become equal to 1 peso. I don't think I've ever been so scared about our government. Any thoughts?

[SavingCash]

What does one TRILLION dollars look like?

[Phatphoeater]

I'm no economist but isn't a dollar that's worth less by inflation better than an economy ground to a halt due to deflation and recession where millions of people lose jobs? I understand it's not a simple either-or choice, but doesn't the government have to play the role of consumer and lender if no one else is? More questions is all I have, no answers.

[SavingCash]

I don't know honestly Phat, but look what happened to Zimbabwe recently:

Zimbabwean dollar pronounced dead - UPI.com

"Inflation in Zimbabwe hit what has been called a "hyperinflation" rate, officially posted as 231 million percent, essentially wiping out the currency's value."

Could it happen to the US Dollar?

[Phatphoeater]

i think we are all aware of the consequences of inflation, but inflation can be addressed, right? i'm guessing, depressions are much harder to deal with. besides, equating the US and Zimbabwean economies seems flawed (even though i don't know why).

I'm not trying to be contrarian, but this economic meltdown is fascinating and am learning alot. One thing I've learned is that things are never as simple as good-bad dichotomies.

[kork13]

What does one TRILLION dollars look like?

That's actually really cool... I've heard similar comparisons (though I can't attest to their validity) such as:

If you were to stand on the edge of the Grand Canyon and drop 1 Trillion $1 bills into a pile at the bottom of the gorge, it would be so big you could walk straight across from one edge to the other.

and

If you could somehow stack 1 Trillion $1 bills in a huge stack, it would reach from the Earth to the Moon. (distance of ~240,000 miles for you non-space-geeks)

As to the OP, while I don't have precise numbers handy, I'm thinking relative to the 30s/40s/50s, during which there was HUGE government spending. Best comparison to today would be in terms of spending vs. national GDP. During that time, there were 3 major spikes in inflation, all of which stuck below 15%--while it's relatively high next to the standard 3-ish percent we're "used to", it's by no means "hyperinflation," at least IMO. I'd say we may have to expect some sort of return to obscenely high inflation, perhaps as high as 15%. But will it wither the USD? I don't think so.

Also, Phatphoeater has a point... The US gov't proactively works to keep inflation between the 2-3% range, which is considered "normal and healthy" for our economy. Zimbabwe's government is riddled with all kinds of problems, and the lack of any real way to control their currency is just one of them. The USG, however, has many measures readily available which are notably effective in controlling inflation (among other economic factors).

[m3racer]

I hope these guys are right. I'm fearful of things going from bad to terrible.