Has America exceeded the sensible limits of credit expansion?

Question

When commodities experience hyperinflation, isn't it simply the natural response to governmental excess?

Answer 1

Yes and yes, but the two aren't related.

Yes, hyperinflation is (almost?) always a result of government mismanagement, but the U.S. is not experiencing hyperinflation by any stretch of the imagination:

http://en.wikipedia.org/wiki/Hyperinflat...

And most would argue that the current level of core inflation (not including petroleum products and food) in the U.S. is not all that high.

It is the case that Americans buying on credit is fueling the Chinese economy which increases demand for commodities of all sorts, including petroleum and food, but also metals, forest products, etc. which, in turn, generates inflation.

And most economists would agree that that the level of personal debt in the U.S. is too high.

http://en.wikipedia.org/wiki/Household_d...

and take a look at the bulletin linked to here:

http://www.federalreserve.gov/releases/h...

And yes, part of the American demand for goods and service can be attributed to the government, but more can be laid at the feet of the politicians who tell us we can have it all if we elect them. (But save at least some blame for the people who believe them. :-)