Hyperbole watch, Bloomberg edition

May 27, 2009

Ryan Chittum quite rightly brings the hammer down on a ridiculous “story” from Bloomberg today, which runs under the headline “U.S. Inflation to Approach Zimbabwe Level, Faber Says“, and which starts like this:

May 27 (Bloomberg) — The U.S. economy will enter “hyperinflation” approaching the levels in Zimbabwe because the Federal Reserve will be reluctant to raise interest rates, investor Marc Faber said.

Prices may increase at rates “close to” Zimbabwe’s gains, Faber said in an interview with Bloomberg Television in Hong Kong. Zimbabwe’s inflation rate reached 231 million percent in July, the last annual rate published by the statistics office.

“I am 100 percent sure that the U.S. will go into hyperinflation,” Faber said.

This is basically Bloomberg taking a silly journalistic staple — the let’s-quote-someone-just-because-he’s-rich story — and elevating it to the level of utter farce. Yes, there are people who are genuinely worried that US monetary policy will mean high inflation down the road. But hyperinflation on the order of 230 million percent? (And that actually vastly understates the real rate of inflation, which, last time I looked, was actually closer to 89.7 sextillion percent, or about 38 trillion times 230 million.)

Marc Faber is not a policymaker, and if news agencies get into the habit of quoting people whenever they say something outrageous and just because they say something outrageous, that only encourages a culture of unhelpful, nonsensical, hyperbolic, and fundamentally ridiculous sound-bites. (Or CNBC, as it’s also known.)

As for Faber being “100% sure” about what’s going to happen in the future, that’s a classic signal to ignore what he’s saying, since it’s proof in and of itself that he’s bullshitting and posturing rather than saying anything substantive. Shame on Bloomberg for encouraging him in this manner.


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