"Inverse Bubble." Most bubbles like the stock or real estate markets expand before they burst. With Inflation, there can be an "inverse bubble" when the government suppresses for years admitting real inflation rates. This bubble will explode upwards, not downwards, but everybody will be just as surprised as is typical when the usual expanding bubbles burst. Everyday common experience is that we are living in a period of great increase in prices everywhere, but in order not to pay more for social security, interest on the national debt, etc., the government has been denying real inflation for years. Just consider housing, health care, travel, education, and even a quart of milk. In the long run, all economic factors equilibrate, and one of these days we can expect a sudden, massive and surprising increase in inflation which will be as disruptive as the regular burst bubbles of recent years.
The government has denied inflation for so long, we can be sure when its inverse bubble bursts upwards, everybody will express the same astonishment as when the real estate bubble burst downwards.
by PPpdddddddcc April 24, 2017