Twitter founder Jack Dorsey warns 'hyperinflation' will strike in America soon to 'change everything' as rates are set to remain high into next year
The co-founder of Twitter has warned that 'hyperinflation' could soon hit the US and 'change everything'.
Jack Dorsey, 44, who is currently the CEO of both Twitter and Square - a mobile payment company - issued a warning about the rise of inflation in America over the weekend.
Taking to Twitter on Saturday, Dorsey wrote: 'Hyperinflation is going to change everything. It's happening.'
Many of his 5.8million followers quickly responded to Dorsey for more information, and in responding to one person, he said: 'It will happen in the US soon, and so the world.'
Jack Dorsey, 44, who is currently the CEO of both Twitter and Square, voiced his opinion on the rise of inflation in America over the weekend
Taking to Twitter on Saturday, Dorsey wrote: 'Hyperinflation is going to change everything. It's happening'
Recently, the US economy has been badly impacted by a supply chain crisis, which has seen consumers spending more money and buying greater numbers of products, but businesses struggling to meet demand.
A backlog of shipping at ports across the US has resulted in the supply chain struggling to keep its head above the water.
Specifically, the Port of Los Angeles, where more than half of shipping container arrive in the U.S., has seen significant ship traffic jams. Trucks are not arriving in a timely enough manner to offload the massive number of shipping containers arriving.
Hyperinflation is a term used to describe a period of excessive general price increases of everyday goods in a very short period of time.
Typically, hyperinflation sees the rate of inflation rise by 50 per cent each month - by comparison, the rate of inflation has stayed at roughly two per cent per year since 2011 - though the last 12 months have seen a 5.4 per cent hike.
The consumer price index rose 5.4% in September from last year, up from August's gain of 5.3% and matching the increases in June and July
Prices are up on a wide range of key goods as high inflation continues to hit US consumers
Unlike standard inflation, which measures the rise of prices per month, hyperinflation monitors the increases each day.
However, hyperinflation does not normally occur without an initial trigger such as a war, social uprising, or supply shock.
Dorsey's warning on social media comes amid rising inflation in the US, which some experts claim is partly a result of the ongoing supply chain crisis.
The rate of inflation in America is measured by the consumer price index and experts were surprised to see it rise by 0.4 per cent last month.
This was 0.1 per cent higher than forecasted and resulted in a year-on-year rise of 5.4 per cent compared to 2020.
The consumer price index examines the average prices of groups of consumer products and services such as transport, food and medical care.
It is often used to measure inflation because it reflects a currency's purchasing power over time, or more simply, the general rise of prices of everyday goods.
When this figure was broken down though, it appears that the rising costs of food and fuel were the biggest contributors to this increase.
Meat prices rose by 3.3 per cent in September, while fuel oil saw a 3.9 per cent rise over the same period.
Speaking to CNBC, Bob Doll, chief investment officer at Crossmark Global Investments, said: 'Food and energy are more variable, but that's where the problem is.
'Hopefully, we start solving our supply shortage problem. But when the dust settles, inflation is not going back to zero to 2 [percent] where it was for the last decade.'
Treasury Secretary Janet Yellen assured Sunday that the US is not 'losing control of inflation' as she claimed rate should return to 2 per cent by the end of 2022
However, despite the current issues, Secretary of the Treasury Janet Yellen said on Sunday that the United States was not losing control of inflation, and that she expected inflation levels to return to normal by the end of 2022.
'I don't think we're about to lose control of inflation,' Yellen said on CNN's State of the Union.
'I agree, of course, we are going through a period of inflation that's higher than Americans have seen in a long time,' she continued. 'And it's something that's obviously a concern and worrying them. But we haven't lost control.'
Yellen added that she expects inflation to return to a more 'normal' rate of around 2 per cent sometime next year.
A backlog of shipping at ports across the US has resulted in the supply chain struggling to keep its head above the water. Pictured: File image of the Port of Los Angeles in San Pedro, California, on September 29, 2021
'On a 12-month basis, the inflation rate will remain high into next year because of what's already happened. But I expect improvement by the middle to end of next year - second half of next year,' Yellen said.
Also when speaking on CNN Sunday morning, Yellen said that spending in President Joe Biden's domestic infrastructure and Build Back Better packages would be allocated over the next 10 years.
She did not, however, say whether that would exacerbate inflation.
Supply chain snags have bedeviled the United States and other countries as economic reopenings spur a surge in demand and a massive labor shortage ensues in the midst of the prevailing pandemic.
'As we make further progress on the pandemic, I expect these bottlenecks to subside. Americans will return to the labor force as conditions improve,' she said.
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