Hyperinflation Unlikely, But Caution Advised, Especially SMBs

By Dana Cone.
Updated Jun 7, 2021

DAYTON, Ohio (PRWEB) June 07, 2021 - In a recent column for Bloomberg, the former president of the Federal Reserve Bank of New York warned of the danger of significant monetary inflation, something not seen in the United States for nearly 40 years.(1) Business strategy consultants agree, if not on the diagnosis(2), then on the need for caution. While a return to hyperinflation is extremely unlikely, says MLA Companies CEO Seth Morgan, the current economy is volatile, as witnessed by post-pandemic resource shifts and price fluctuations.(3) Businessesespecially small to medium-sized businessesshould be preparing themselves to respond to change in the financial weather.

Hyperinflation, notes Morgan, has been described as the defining macroeconomic event of the second half of the twentieth century. During the nearly two decades it lasted, there occurred four economic recessions, two severe energy shortages, and the unprecedented peacetime implementation of wage and price controls.(4) While hyperinflation has not been seen in the U.S. since 1982, it has appeared in numerous other countries; in recent years, it has destroyed the economies of Zimbabwe, Venezuela, and Argentina.(1)

In the U.S., even though the current small inflation appears to be temporary, aggressive government monetary policies and the unprecedented nature of the COVID-19 pandemic are leading asset managers to shift allocations to allow for the probability of more persistent inflation.(5)

Businesses, says Morgan, are shifting allocations for other reasons as well. A rapidly growing company in the food-kit service market, for example, recently opted to significantly reduce its marketing budget so as to forego a new round of investor funding and finance the development of its production infrastructure out of the companys self-generated revenues.(6)

While the details of preparing for possible inflation and asset reallocation vary from company to company, there are, notes Morgan, some areas every firm needs to concentrate on:

In other words, be prepared. Helping SMBs recognize change and organize themselves to deal with it is, says Morgan, essentially what MLA Companies does. We see small business, he says, as the place that figures it out and gets it done. We believe in keeping the owner as close as possible to what he or she is passionate about and making sure the resources are there to help them fulfill that vision.

About MLA Companies MLA Companies is not a CPA firm that also does consulting. They are consultants whose customized, value-driven approach offers processes and services that align to clients needs and future growth. Founded in 2006 by CEO Seth Morgan, they are financial experts positioned to understand a client and their businessto protect, guide, and empower. Clients who invest in building relationships with MLA Companies know that their purpose will not change but their service offerings can grow as the business grows. At MLA Companies the discussion with a client is centered around purpose and growth firstthen finance and services second. Visit https://mlacompanies.com/

1. Logue, Ann. Inflation is on the way for 2021Heres What That Means for You, Yahoo finance, 8 Dec. 2020, finance.yahoo.com/news/inflation-way-2021-means-170015175.html 2. Calhoun, George. The Inflation Scare Doesnt Match Reality, Forbes, 1 May 2021, forbes.com/sites/georgecalhoun/2021/05/01/the-inflation-scare-doesnt-match-reality/?sh=5c3e26e21049 3. Goodman, Peter S. and Chokshi, Niraj, How the World Ran Out of Everything, New York Times, 1 June 2021, nytimes.com/2021/06/01/business/coronavirus-global-shortages.html 4. Bryan, Michael. The Great Inflation Federal Reserve History, federalreservehistory.org/essays/great-inflation 5. Idzelis, Christine. Investors see significant overshoot of Feds inflation target for first time in years, says BofA Marketwatch, 5 May, 2021, marketwatch.com/story/investors-see-risk-of-significant-overshoot-of-feds-inflation-target-for-first-time-in-years-says-bofa-11620246032 6. Johnston, Peter. Whats in store for grocery and meal delivery services, National Retail Federation, nrf.com/blog/whats-store-grocery-and-meal-delivery-services