This page has been archived and commenting is disabled.
Guest Post: We Will Be Told Hyperinflation Is Necessary, Proper, Patriotic, And Ethical
Submitted by Patrick Barron via The Ludwig von Mises Institute,
Hyperinflation leads to the complete breakdown in the demand for a currency, which means simply that no one wishes to hold it. Everyone wants to get rid of that kind of money as fast as possible. Prices, denominated in the hyper-inflated currency, suddenly and dramatically go through the roof. The most famous examples, although there are many others, are Germany in the early 1920s and Zimbabwe just a few years ago. German Reichsmarks and Zim dollars were printed in million and even trillion unit denominations.
We may scoff at such insanity and assume that America could never suffer from such an event. We are modern. We know too much. Our monetary leaders are wise and have unprecedented power to prevent such an awful outcome.
Think again.
Our monetary leaders do not understand the true nature of money and banking; thus, they advocate monetary expansion as the cure for every economic ill. The multiple quantitative easing programs perfectly illustrate this mindset. Furthermore, our monetary leaders actually advocate a steady increase in the price level, what is popularly known as inflation. Any perceived reduction in the inflation rate is seen as a potentially dangerous deflationary trend, which must be countered by an increase in the money supply, a reduction in interest rates, and/or quantitative easing. So an increase in inflation will be viewed as success, which must be built upon to ensure that it continues. This mindset will prevail even when inflation runs at extremely high rates.
Like previous hyperinflations throughout time, the actions that produce an American hyperinflation will be seen as necessary, proper, patriotic, and ethical; just as they were seen by the monetary authorities in Weimar Germany and modern Zimbabwe. Neither the German nor the Zimbabwean monetary authorities were willing to admit that there was any alternative to their inflationist policies. The same will happen in America.
The most likely trigger to hyperinflation is an increase in prices following a loss of confidence in the dollar overseas and its repatriation to our shores. Committed to a low interest rate policy, our monetary authorities will dismiss the only legitimate option to printing more money — allowing interest rates to rise. Only the noninflationary investment by the public in government bonds would prevent a rise in the price level, but such an action would trigger a recession. This necessary and inevitable event will be vehemently opposed by our government, just as it has been for several years to this date.
Instead, the government will demand and the Fed will acquiesce in even further expansions to the money supply via direct purchases of these government bonds, formerly held by our overseas trading partners. This will produce even higher levels of inflation, of course. Then, in order to prevent the loss of purchasing power by politically connected groups, the government will print even more money to fund special payouts to these groups. For example, government will demand that Social Security beneficiaries get their automatic increases; likewise for the quarter of the population getting disability benefits. Military and government employee pay will be increased. Funding for government cost-plus contracts will ratchet up. As the dollar drops in value overseas, local purchases by our overextended military will cost more in dollar terms (as the dollar buys fewer units of the local currencies), necessitating an emergency increase in funding. Of course, such action is necessary, proper, patriotic, and ethical.
Other federal employee sectors like air traffic controllers and the TSA workers will likely threaten to go on strike and block access to air terminal gates unless they get a pay increase to restore the purchasing power of their now meager salaries.
State and local governments will also be under stress to increase the pay of their public safety workers or suffer strikes which would threaten social chaos. Not having the ability to increase taxes or print their own money, the federal government will be asked to step in and print more money to placate the police and firemen. Doing so will be seen as necessary, proper, patriotic, and ethical.
Each round of money printing eventually feeds back into the price system, creating demand for another round of money printing ... and another ... and another, with each successive increase larger than the previous one, as is the nature of foolishly trying to restore money’s purchasing power with even more money. The law of diminishing marginal utility applies to money as it does to all goods and services. The political and social pressure to print more money to prevent a loss of purchasing power by the politically connected and government workers will be seen as absolutely necessary, proper, patriotic, and ethical.
Many will not survive. Just as in Weimar Germany, the elderly who are retired on the fruits of a lifetime of savings will find themselves impoverished to the point of despair. Suicides among the elderly will be common. Prostitution will increase, as one’s body becomes the only saleable resource for many. Guns will disappear from gun shops, if not through panic buying then by outright theft by armed gangs, many of whom may be your previously law-abiding neighbors.
Businesses will be vilified for raising prices. Goods will disappear from the market as producer revenue lags behind the increase in the cost of replacement resources. Government’s knee-jerk solution is to impose wage and price controls, which simply drive the remaining goods and services from the white market to the gangster-controlled black market. Some will sit out the insanity. Better to build inventory than sell it at a loss. Better still to close up shop and wait out the insanity. So government does the necessary, proper, patriotic, and ethical thing: it prints even more money and prices increase still more.
The money you have become accustomed to using and saving eventually becomes worthless; it no longer serves as a medium of exchange. No one will accept it. Yet the government continues to print it in ever greater quantities and attempts to force the citizens to accept it. Our military forces overseas cannot purchase food or electrical power with their now worthless dollars. They become a real danger to the local inhabitants, most of whom are unarmed. The US takes emergency steps to evacuate dependents back to the States. It even considers abandoning our bases and equipment and evacuating our uniformed troops when previously friendly allies turn hostile.
And yet the central bank continues to print money. Politically-connected constituents demand that it do so, and it is seen as the absolutely necessary, proper, patriotic, and ethical thing to do.
»
- 34945 reads
- Printer-friendly version
- Send to friend
- advertisements -
Wait for it...wait for it...
Learn to take care of yourself NOW.
Grow Food.
Water Source
Stack (Can Include Some Bitcoin and Crypto) ;)
Supplies.
Skills
Its comming, no matter what MDB says!
RIPS
Fonestar..we get it, just chill.
Martin Armstrong convicingly argues the opposite - all empires end in a deflationary collapse.
My chips are on the table, the dice are rolling. I wish you luck on your bet.
I dont believe in deflationary collapse for the US..maybe a deflationary shartage of actual paper cash for a month..but thats it.
Theres too much paper printed and Ol Yellen is the dog they will shoot in the back corn shed...while paper burns in fireplaces.
RIPS
Nothin' like some good ole hyperinflation porn on a chilly winter evening !
You are make joke of US Inflation, but $USD will drag all other global currency down toilet vortex result in world war. Weimar and Zimbabwe is insular event, but this time is different - this time global currency is all self immolate value in massive rush for competitive volume printing. Globalists are elite ideologue of central planning not aware of systemic interdependent risk.
... but what is Boris know!?
Boris my friend, you speak the truth. Many a true word is spoken in jest. Or, In vodka veritas if you prefer.
The exact same varibles were present during the 08 crisis, crisis bitches.
Same song for 5 years now. This story is getting tired.
Radical economics is dead.
http://www.planbeconomics.com/2013/04/the-death-of-radical-economics.html
The article is brain-dead nonsense!
The Weimar financial crisis began with the crushing reparations payments imposed at the Treaty of Versailles. Hjalmar Schacht, who was currency commissioner for the Republic, wrote in his 1967 book The Magic of Money that it was the privately-owned Reichsbank, not the German government that was pumping new currency into the economy. What drove the wartime inflation into hyperinflation, said Schacht, was speculation by foreign investors, who would sell the mark short, betting on its decreasing value. Speculation in the German mark was made possible because the Reichsbank made massive amounts of currency available for borrowing, marks that were created on demand and lent at a profitable interest to the bank. When the Reichsbank could not keep up with the voracious demand for marks, other private banks were allowed to create them out of nothing and lend them at interest as well.
You are forget Kaiser is finance war expense by debt. You are want forgive Germany debt when is use debt to attack Europe, destroy 50% of France countryside and village!? Of course French is angry and demand reparation. Reichsbank is simply recover using monetization, money is lend to German war machine. Remember, all war is bankster war.
World Wars 1 + 2 when Europe crashed from wolrd total domination (84% manufacturinf power in 1913) to 3th power among more than 200 contries now. Now it is barely 4th just because others are moar bad. Same scenario, but you're right Boris, Intersistemic Risk is an understated risk + politicians are morons, corrupt or puppets + new technologies like drones, 3d printing, genetic stuff, nuclear, nsa, and amazons and bitcoiners and dumb and dumber people, muslims, tribes, triads, mafias, guilds, associations, ngos, atheist, nichilist, edonist, addicts etc etc will eventually crash the system.
An epic clusterfuck
Boris, "this time is different"? Really?
HY IS a danger for the USD, and arguably for the GBP. But you canNOT plan it, only court it
And one prerequisite for HY has always been... other currencies (including gold)
btw, define "globalists", if you can
Other currency? That is exactly present problem. ALL currency is race to devalue. If all currency is devalue (even Swiss Franc), where is safe haven currency? Gold is only safe currency left because cannot be create from keyboard. Physical Gold, not Paper subject to re-hypothecation and derivation.
... but what is Boris know!?
ALL currencies apart from one that is. Guess who gets the Prize for guessing which one ? Hint: The prize is a big fat fucking monkey blowing bubbles out of its ass holding a great big 'B' sign .....
It happened recently in Eastern Europe (not more than 15 years ago). I know the feeling of using my money now because tomorrow will cost more. The problem is that most of regular folks will not have any money because there is no job.
WW3 will be a Currency War. This is already being played out right now. Nuclear Armageddon will not happen because nobody can profit from it. Much easier to create multiple parallel currency wars that can be manipulated and controlled for optimum profits. Creating global nuclear war for profit's is not an option , apart from everybody being killed there won't be anything left to spend the profit on.
Jesus is coming if you buy my book.
He already drove right by you and you missed him, so sorry Charlie.
Every hyperinflation is preceded by a deflationary collapse. He's just saying the empire has "ended" before the currency is worthless.
Any fiat currency backed by a empire that has ceased to be is going to go through a brief hyperinflationary phase before no one at all accepts the currency anymore.
Seek,
Im down with that. I actually agree.
Let me try laymans here.
While the last "physical" dollars are spent, they may have more intermediate purchasing power. I think that will be short lived and the government will order direct fed debt monetization (I know they are/have been already). It is at this point, when there are no clothes on the emperor, that currency is inflated away till no one takes it in exchange for value delivered anymore.We are rapidly approaching the global full monty. All 21st century paper currencies are benchmarks against eachother with an intrinsic value of toilet paper. This will not be isolated to the USD.
I guess the inflation vs deflation arguement is like a chicken or egg. One does lead to the other.Currencies dying because they are too valuable..just doesnt sound right.
Inflationary collapse brings a new backed note currency with better spending power, deflationary.
Deflationary collapse brings on hyper printers and quantum computing 0's, inflationary. I guess till its worth nothing, then its deflationary again..maybe.
Till is isnt.
My other beers getting warm...I need both hands. Double fistin!
Happy new years.
RIPS
This will be the first catastrophe everyone saw coming and yet, were still swept away.
Yep, like Katrina. Saw it coming and sat on their asses.
No way will I be ready in time. Seeing is one thing. Doing something about it is something else.
the banks will smash their earnings of worthless fiat as usual.
after all how hard is it to create return, when your product is supplied for free
courtesy of zirp, it's created out of thin air, and all your customers have been brainwashed
sufficiently, to trade their precious lives for your no-thing. no longer able to see the master
has on no clothes.
Useless post edited out.
+1 Tmos
If he means deflationary collapse in terms of GOLD, then he is exactly right. "My kingdom for a horse!" quickly becomes "my kingdom for an ounce of gold!" when force becomes fragmented and economics outweigh even bullets.
When this happens, you will want to buy productive assets. Bakery, woodshop, farm, shampoo factory, whatever; something that produces income. Don't buy a Ferrari or mansion.
Martin Armstrong is rarely convincing, and struggles to be coherenct. He is an autodidact historian with all the attendant flaws of the self taught would be scholar. He seems to think that the present state of affairs vis in the west is all down to Marxism run amok, but, he doesn't seem to understand that it is the monetary system itself which is the source of most, if not all of our ills. The U.S. government is profligate because it can be, though not for much longer.
In the meantim if you give him thousands of dollars he'll give you a few tips (that you can get for free elsewhere) on how to avoid the worst effects of what is to come. Mr. Armstrong, it so happens, is a former jailbird, and I, for one, have serious doubts that he was simply the hapless and blameless victim of the courts as he would have us all beiieve.
Marty likes to paint himself as quite the victim... just ask his victims.
I agree with economist John Williams that inflation hovered around 8% from 2009-2012. Inflation now in 12% range for past year, but I don't think the US will hyperinflate. The Weimar government indexed ALL wages to inflation, not just government workers. Key differences between then and now: 1) scale of national debt, 2) scale of derivatives, and 3) extremely weak demand for labor, thus no wage increases and no demand-pull inflation. I vote extreme deflation... then currency collapse, followed by socio-economic collapse, and martial law.
After the Weimar money collapsed, Germany made a new German Mark. It was worth 1,000,000 old Marks. From this Germany created a war machine in a few years that took the rest of the world combined to defeat it.
Lesson here? Create new dollars that are worth 1,000,000 times the old dollars. Problem solved.
Currency collapse and hyperinflation are the same thing. (When currencies collapse, they hyperinflate until replaced.) Deflation normally precedes hyperinflation.
Hyperinflation has no connection to inflation, it's an entirely different phenomenon -- essentially it's the greater fool theory run amok applied to a currency, rather than the monetary base expansion associated with conventional inflation. Indeed, you can easily have hyperinflation occur even as the monetary base is shrinking, as it just depends on people viewing the currency as losing value rapidly.
So, you actually do believe in hyperinflation, and in the normal order it emerges (deflation followed by a loss of faith in the currency, triggering hyperinflation.)
Succinct, there seek! ++
It's the deflation scare that looses the hounds to begin with. Then, confidence crashes with the paper.
But, could it be, the deflation bugaboo earlier in this malaise has already set the wheels in motion?
Tough call. I'm still even odds.
What does that mean if you live in a tent in Obamaville?
The forces driving hyperinflation will come from outside the US. When the dollar is totally rejected by those whom produce the goods and energy we have consumed for decades. The US military has done a good job backing the dollar since 1971, but I think the rest of the world is getting tired of being our bitch.
I'm with Armstrong.....his blog is very interesting. Anyone they would lock up has to be good value.
Hyperinflation and deflation are mirror-images of the same economic phenomenon- ecoomic decline via the destruction of the marginal utilty of ANY form of credit.
HOW this marginal utility finds its eventual destruction (whether via monetary supply explosions, or via a complete breakdown of the willingness to lend or share value) is factually irrrelevant. The end result is always the same- borrowers suffer due to inability to borrow sufficiently, savers (who stockpiled supplies of the credit instrument thinking they would be protected) suffer as their savings are typically confiscated, followed by the residual value of what's left imploding to a nearly valueless state.
In such economic declines, the only ones who weather the storm are producers who produce on their own account- this is why farmers, mechanics, and other tradesman are typically able to barter their way through to the next expansionary period.
It's a pity more "Economists" can't understand this in a conceptual sense, for if they could, then they would admonish the use of the terms "inflation" and "deflation" from Economics FOREVER.
The infamous Krugman once dared to admonish Ron Paul(!) with a diatribe about money being "a quantum", and yet Krugman hasn't the intellect to comprehend that every quantum state is defined by a mechanical property, and also by a (single) theoretical counter-state which surrenders said mechanical state into utter flux and baselessness.
If money is a quantum, then it too must exhibit both empirical (measureable) properties as well as wave-form variable (quantifiable, but not measurable) properties. Heizenerg's principle applies to any (and all) true quantums
Modern Monetary Theory is, by its very nature, linear. (ergo the linear, "Progressive" theology that underpins most Economists' point of view). The term "Progressive" means "A bias toward advancement in a single direction, commonly perceived to be "forward"
I mean, no one deliberately "progresses" backwards on purpose, do they?
So, pray tell, how does a linear, progressive monetary thinker like Krugman DARE to define the output of his linear thinking (money and credit) as a quantum?
Human psychology is the basis of the "String Theory" of modern Economics. Money and credit have value, until they don't; just as an electron is a particle only until it "decides" it would rather behave as a wave (which usually occurs at the moment you try to measure it in its present state as a particle).
So, Economists should ask themselves same question all Quantum Physicists must ask: Is the observation (or social classification) of money actually the thing that eventually renders it worthless?"
Fascinating that the observation and classification of money typically occurs in order to initiate the social process of extracting value (wealth) from one group, in order to distribute it to another... aka: taxation. Again with that Progressive crap... Taxation: It's good for the soul (?)
I have hereby given birth to the study of Quantum Economics... Krugman should be my first student, but I'm not going to sit around waiting for the phone to ring.
That's the thing about pitchforks
They're productive in the ground and in the air.
"Learn to take care of yourself NOW."
You forgot old motherboards, PSUs, capacitors and RAM!
I've RAM'ed your motherboard, and she wasn't that good --- not even worth 0.000000000001 bitcoin.
You're such an exaggerator AKAK, Bitcoin only goes out 8 decimal places.
Kinda reminds me of Randy Savage coming off the top rope..
No need for a count- KTFO!
Things to STACK
If you have a good enough water purification system you can trade clean water for food as long as food is around. I worry that they will tell us that starvation is good for us the way hyperinflation is. It does help with the obesity problem...
"Gold for bread Zimbabwe" http://www.youtube.com/watch?v=7ubJp6rmUYM
FEDbuster : Always a good reminder. On a similar note, someone else once posted an excerpt from a book called, "The 900 Days" - basically trading precious metals for more sawdust in their bread. I must read the rest of it one day.
If you live on either coast, be sure to register your firearms, ammo and magazines so everyone is kept safe. /sarc
Pool Shock.. crystallized bleach with no expiration date. little dash purifies gallons. every prepper should have a container of it stored on a shelf some where
Where do you get it?
Walmart, Ace Hardware, or Home Depot. But I read that it has an additional chemical that makes it unsafe for drinking water, so do your research first.....
Just dont store it next to a petroleum product.
Oxidizers and fuel dont mix well. Even used motor oil will ignite if mixed with pool shock.
Don't forget some tried and true heirloom seeds.
Bitcoin?
If the hyperinflation is government-backed, rather than a sudden accident, you can count on bitcoin being illegal. It won't stop it, of course, but it'll be nigh impossible to use it for more than a means of protecting a small amount of wealth.
I also bet that the internet will have "problems" during any hyperinflationary episode. Restricting information will be high on the priority list, and given the shit the Feds have already done clandestinely via Patriot act/NDAA/etc and the cooperation they achieved from the major internet outlets, pulling the plugs for a couple weeks will be child's play under a claim of nation security.
If you look back to the bank holiday of March, 1933, it only took a week or so to completely rework the system. If, like then, it's a government backed exchange adjsutment, we'll likely see a forced bail-in to take "rich people's money" combined with some sort of new devaluation (against what? I have no idea.) Deployed without warning like this, bitcoin is useless unless you've already migrated to it -- in which case you can spread the risk by moving assets to PMs, bitcoin, and other resources well in advance of the event.
As is the case always, those who wait... will be utterly fucked.
The government has alternative currencies already printed and stored on military bases. This came out during the Arab Oil Embargo with the rationing stamps for gasoline: see it now, as Edward F. Murrow use to say--
https://www.google.com/search?q=us+gas+rationing+stamps+1974&client=fire...
That was close wasn't it? You could "virtually" feel it coming...lol.
Yes, the last gasp of scoundrels & shills are appeals to patriotism and "their ethics". It doesn't matter that "their ethics" have been shown to be nothing more than the avarice we all oppose.
Its New & Improved! now ;-)
virtual ethics
they're often sold with virtual rights
and virtual enemies
As with everything virtual, you get what you pay for ;-)
I don't kiss patriotism ass.
And I don't kiss the Pentagon's brown dot.
(How do you like that?)
hmmm... let me see - buy bitcoin - something that has been around for a few years and exists on a screen--- or buy gold --- something that I can put in my hand --- and that has been around as money for thousands of years
Obama will be on the quadrillion-dollar bill. That'll be his fucking legacy.
No, it will get so out of control they will have to invent a new number...
And the bastard is just egotistical enough to make it in his name...
Ladies and Gentlemen, I introduce to you, the Obammillion...
Notice how it just rolls off the tongue, especially the bam part...
The Obammillion coin; made from narcissium.
The most worthless fiat in the world are the ones that have pictures of living African leaders, so yes, good call on the Obama bill....
Food, water, good booze, ammo, gold, silver and naked pics of Hillary.
Six of these things, belong together
Six of these things, are kind of the same
But one of these things, does not belong here
Now it's time to play our game - and try not to puke.
Hopefully, he was talking about naked pictures of Hilary Duff and just mispelled Hilary
Or even pix of Hillary Swank would work
Jeez...now that I think about it, I think I'd rather see pix of a naked Sir Edmund Hillary before pix of you-know-who !
It could be worse. He could have suggested FEINSTEIN. God have mercy.
MEDIC! MEDIC! It's his eyes, HIS EYES EXPLODED!
You had my up vote until you wrote "naked pics of Hillary",but rest of the post out weighed "Hillary" and up vote it was.
I'll need good booze to look at those pictures
You lock me in a room with a gun, a bullet, and a naked Hillary, I'll probably shoot.... myself.
Bill? Is it really you? Pssst, I think she might have a couple assistants on ZH so keep your head low...
I'd rather pleasure myself with a cheese -grater than spank it to pix of Hillary !
If you're in a position similar to mine, ya' gotta spank it periodically to make sure it still works. Just in case you need it, which you probably won't.
"Our military forces overseas cannot purchase food or electrical power with their now worthless dollars."
I call bullshit on this. Every other country is doing the same or worse to its currency. This is going to be a world-wide hyperinflation, if at all.
If they type long enough they can't hide the bullshit.
yes, it's a race to the bottom, but we have the furthest to fall and some of the dirtiest tricks. Overextended empires work like that. And they make a lot of enemies in the last chapters
And we don't have the industrial base to back us up, like China does, when the curtain closes.
Just because they won't take their country's monopoly money doesn't mean they will take ours.
Riiiigggghhhttt and our 40 years of rigged trade deficits have so endired us and our manipulated currency to the ROW. We are less solvent than Greece and wtf do we have that anyone wants? Seriously foodstuffs and thats about it. BTW expect TPTB to try and commmandier that for themselves and let nature take its course with the rest of us. Those out of the country troops are going to have to fend for themselves....good luck with dat. Maybe they can trade their Obammy bucks as TP.
But yeah none of the paper crap will be worth much can you say Barter Town
Imagine no more money
I wonder if you can
No need for greed or hunger
A brotherhood of man
Imagine all the people
Sharing all the world...
You may say I'm Obama
But I'm President, I won
So kiss my ass you rich folk
Cuz at least I'm having fun
There's an EO that covers this.
See us here
http://www.showrealhist.com/RHandRD.html
"Our monetary leaders do not understand the true nature of money and banking"
The Paper Aristocracy understands that counterfeiting is theft. As theives they do not need to understand the true nature of money and banking nor are they attempting to do so. Whomever receives the fresh paper first is reaching into everyone elses pockets and stealing from them their purchasing power. What others would have and could have bought has been stolen from them and that purchasing power is used by the thief to purchase unearned goods which they do not deserve (or to pay off debts they wrecklessly incurred).
It is not about money and banking; it is about deception, fraud, theft, and usurpation of power.
I spent part of my day today on a tourist island in Florida looking at a model home. The realtor was saying that building has recovered, but that they are having trouble getting sub-contractors because they are so busy---and also, their rates are higher. He also said that lots that were $200k last season are selling for $250k this year. And, that prices are rising across the board; concrete; up $10. per yd.; drywall, lumber, roofing, steel, concrete block, tile, appliances, even paver stones--all increased! That's anecdotal information that I thought as I left will surely find its way into some report (hopefully!?!) in a few short months.
He noted that the model I was looking at, under $1 mil, and under 3000 sq. ft., was last year's economy model. All anyone wants these days is much larger and more expensive.
I guess if you can't save it anymore, and can't risk it anymore, you may as well buy a McMansion in Florida and say hello to an early retirement. "Sell everything, I'm never coming home!"
"There is a sucker born every minute."
I know. I'm in the construction trades. ALL material has been steadily going north since 2007 and wages have been going south...just like Obama'a ratings.
A realtor told you this...LOL!
Did he mention Hurricanes ?
Groucho Marx said it first in Cocoanuts, released in Spring 1929:
"Boy, can you get stucco!"
Other than abolishing the Fed, any measures taken by the government to control inflation (once it gets out of the bag), will be just as effective as the Whip Inflation Now (WIN) buttons and the price controls that were used in the 1970's.
Rent control, Wage & Price controls, Capital controls, all coming to an economy near you.
That evil gang of foreign price-gougers Nixon warned us about in the 70s are back...
Those formally .gov produced free buttons are now worth over $10 w/shipping.
http://www.ebay.com/itm/like/131028734518?lpid=82
Just being honest, we are close but still have a window of opportunity. The cunts above Obama don’t know what quite to do. Obama doesn’t know what to do. Sit back and watch what the market does. Sell everything when the time & HFT platform tells opposite. winks
We have seen currency wars in the past and how it plays out.
Who of the big players will be the first to blow up?
Capital rushes out, seeking safety.
We do not need to look too far afield to get an idea of how semi-hyperinflation might be handled by our government.
"Throughout most of the 20th century, the Mexican peso remained one of the more stable currencies in Latin America, since the economy did not experience periods of hyperinflation common to other countries in the region. However, after the Oil Crisis of the late 1970s, Mexico defaulted on its external debt in 1982, and as a result the country suffered a severe case of capital flight, followed by several years of inflation and devaluation, until a government economic strategy called the "Stability and Economic Growth Pact" (Pacto de estabilidad y crecimiento económico, PECE) was adopted under President Carlos Salinas. On January 1, 1993 the Bank of Mexico introduced a new currency, the nuevo peso ("new peso", or MXN), written "N$" followed by the numerical amount. One new peso, or N$1.00, was equal to 1000 of the obsolete MXP pesos."
Russia did practically the same thing. It just lopped off about 5 zeroes.
I suspect the hyperbolic discussion of hyperinflation is intended as a distraction from the fact that we are already experiancing huge collapse in standard of living and education. It is becoming increasingly obvious that the plan is to breed a new generation with low expectations and lowered skill levels while simultaneously pushing the elders of a cliff while relieving them of any accumulated wealth. Appears to be working fairly well so far. All that matters is red or blue, red or blue. That and 80" diagonal 3D to watch CSI
The country died in 2008. Look around, we are living through the collapse now.
Keep that in mind and you'll keep your head through the coming storm.
"The country died in 2008."
Yup. And never forget it was Obama who hammered the last nails into the coffin when he beat McPain in coming to the rescue of the SOB's (Save Our Banksters) during his 2008 campaign of "Rope & Chains"...
It died on 9/11
i beg to differ, it was 1971, my year of birth that saw the death of the economic Republic
It died on December 23, 1913. It has been a parasite controlled zombie since.
Yeah well just keep in mind your debts will be indexed and that enforced with a .gov gun, no paying off the house with this weeks wages. Cannot have bankers suffering now can we, firesale in the Hamptons I don't think so.
Total bullshit on the hyperinflation call. How long do you think people will be able to puchase food and gasoline and heating oil/nat. gas or propane in a hyperinflationary time ? A week ? Do you REALLY think CONgress will pass increases in wages for federal workers, ss recipients, SNAP beneficiaries etc etc within that week, or even within a month ? No, the Fed does this and it's finally tar and feathers and pitchforks and torches tme in the District of Criminals.
Bring it, bitchezz, it may be the only thing that finally gets Boobus Americanus off his overtuffed Barcalounger, flip off his TeeVee distraction du jour, and his head out of the twinkie bin and out onto the streets for a little bankster swinging.
Prostitutes won't be charging anything when men become "men again".
I'm not flawless, but what men do to women has never been a blessing. Especially what might occur in the modern day United States.
Our monetary leaders do not understand the true nature of money and banking? My blood pressure just went up 20 points.
Until recent years, they've done an ok job. But now the uninformed have created an empty hole that can only be filled with the corpse of American taxpayers by modern day Rockefellers.
The Fed is telling you it fears deflation substantially more than hyperinflation.
Fed heads think they can control inflation once it show, although they never experienced a complete loss of confidence in a currency backed by nothing.
Artificially low rates boosting housing along with Fed pumped equities pushing up prices of luxury items and premium real estate. One huge pump fest. All that's needed now is a huge currency devaluation to justify the run-up. It then impoverishes the 90er%.
TRILLION of dollars of debt are MUCH easier to deal with when a loaf of bread costs $100 billion.
Inflation is the Fed's stated goal.
Since we are a society of credit addicts, TPTB will do anything to prevent inflation, because that would make it easy for the sheeple to pay off their debts.
All the pieces of the puzzle are coming together. The debt industry is perhaps the biggest.
But haven't the wealthy already spent their CDOs, credit default swaps, etc and bought all the stuff (islands, jets, Maserattis, gold, mansions, survival retreats ) that they need? Why does a Blackfein or a Diamond care whether the little retail investor in his company is left holding the bag of blance sheets that may soon be worthless pieces of paper?
Or just raise your credit card interest rates to triple digits. Look at how damned high they are with record low rates from the Fed. At the first sign of an increase I'll probably just stop paying on mine. I mean, fuck 'em, I'm in business, I do what I want!
I'm not going to hold my breath for hyperinflation as there are sum 180+ nations with central banks playing this QE, devalue currency, ect... However a BIS (Business of International Settelments) with the IMF skimming interest earnings from savings, One-Offs ect... for-the-most-part is assured... and gold is a slam dunk sell!
"The money you have become accustomed to using and saving eventually becomes worthless..."
That stuff ain't money.
Who blows up first?........ Have at it big boys, blow out your brains. A worldwide game of debt Russian Roulette. Main risk facing the world is a Chinese debt disaster, warns George Soros with the much-reviled short seller warning of a giant Chinese crash.
http://economictimes.indiatimes.com/news/international/business/main-ris...
I would like to use this loaf of bread to pay off my $500,000 mortgage. Bring it on !!!!
Who wins this fianancial war?
The Chinese trying to implode the US economy so it can take over or the US creating a financial panic in China. Let the financial wars begin.
Chinese local government debt could have 'global impact' http://www.bbc.co.uk/news/business-25650313
I just got back from Costco. The small pack of Filet that was ~$30 all summer now has a $50 sticker on it. They had to start stocking a second refrigerator to hold the now browning meat. Some lady was complaining to the store butcher to get him to drop the price. This is in an an up-scale SoCal area.
Hopefully the meat goes bad and Costco has to take a loss on it. The manager should be canned for not dropping the price.
Not in Korporate Amerika.
A Big Box like Costco would just eat the loss, and write it off at the end of the year.
If the manager had a weekend fire sale on the filets, chances are he'd be canned for doing so.
Back in the mid 80's, a friend of the family's daughter who we hung around with as kids, worked as a cashier at a Pizza Hut. When she first started working there, if a customer never showed up to pick up their order, or a pizza was slightly burned, it would get sold at a gross discount to the Pizza Hut employees from that shift. Management ended up having to change that policy years later to one where if a pizza was spoiled or not picked up, it was to go straight into the garbage. Management was concerned employees were burning pizza's on purpose in order to get a cheap meal.
Costco has to eat those costs on the spoiled fish and throw it out, or expect customers to hold out for sales.
Filet Mignon is not Fish.
LOL
Well I guess they can substitute some Ground Round for the Filet. That will make the CPI reporting more accurate I guess.
LOL. I love it when I hear rich people moan about the pain in their pocketbook. Thanks for the humor. LMAO.
If you want an analogy of the most likely monetary scenario facing the USA, look to Argentina circa 2001-2002, when they experienced 'only' a 75% devaluation of their currency in the space of a few months, along with the usual "bank holidays", capital controls, riots, food shortages, etc. etc.
It was not technically a hyperinflation, but I am sure that the average Argentinian was not very appreciative of the fact that they lost "only" 75% of their savings (and standard of living) vs. 99.999%.
And it's happening again in Argentina!
I like the description of the grand finale between deflation vs hyperinflation as "monetary tectonics". I can't remember where I read it recently.
Could the unexpected happen?
Divide the total amount of gold that the federal government owns, 8,100+ tons (so they say) by the number of US dollars in circulation; and throw in some silver too for good measure.
Problem solved?
And if that 8100 tonnes was paid under the table to the Saudis in exchange for oil (and propping up the petrodollar)?
Zero divided by anything is........ You end up with gold being worth infinity - or rather the US dollar worth nothing.
If there's any of it left in Fort Knox, military personnel will be paid in gold while all other Federal obligations are paid with worthless paper. Pretty soon the Fort's commander will be de facto dictator and no one will pay any attention to the monkeys in Washington. What's Obama gonna do, order the Army to seize Fort Knox?
I have read this hyperinflation story for 5 years now. I see all the ZHers picking up their pitchforks and torches and joining the march. At the risk of being crucified I say we get deflation first. Why? Because we are being taxed to death. Because Europe wants to confiscate 10% of bank deposits. Because the velocity of money has crashed as folks hoard. Because this whole NSA thing is not about terrorism at all. It's about following money and collecting every last nickel from every american around the world regardless of where they live and work. All those forces are deflationary. Bernanke can print money out his wazoo but if it sits in the banks and doesn't circulate then it is not inflationary. Anyone out there willing to give an example of a country that suffered hyperinflation (whatever that defintion happens to be) that was a world power at the time. I don't know of one. Weimar Republic was in the throws of a revolution. Zimbabwe is a third world loser. What is our Fed so afraid of that it won't taper? ...... Deflation. (I think I here the angry mob approaching).
I completely agree! These guys have predicted hyperinflation for years, and it is nowhere in sight. They also predicted Treasury bond interest rates in the stratosphere, and again, not in evidence.
The real problem of the von Mises group is their broken economic model. Other economists (and yes, I am talking about Paul Krugman) have successfully predicted all of the primary features of our current situation: low inflation, low bond interest rates, fiscal multiplier much greater than 1, and insensitivity of the US economy to the level of Federal debt. When will these folks simply admit that they were wrong?
Anyone who has witnessed the spectacle of Ireland, beggaring itself in order to enrich the bankers of Northern Europe *must* understand that "austerity" is simply a smoke screen for another wealth transfer from poor to rich. And, the von Mises folks are some of the most ardent purveyors of this nonsense.
Inflation is happening, just think of what you could buy for 100$ 10 years ago and today. That the hyper-inflationary phase did not happen yet is only because of the competitive devaluation by All Central Banks around the world. Lets see Gold price 10 years ago 250$ today 1250$ so you have a real inflation of 400% over 10 years, that's not hyperinflation yet but we're getting there.
Thay all know that when the Dollar falls, eveything goes with it, so everybody has an interest in protecting it, but this will only last so long till some external even makes this impossible or politics make this no longer the "best option". If any major player(who holds lots of Treasuries) bails than it's Gave Over but QE and such won't be enough as long as everybody's skin is in the game.
We will get both. Deflation in non essential assets as your shit is only worth what someone is willing or able to pay for it. That which sustains life. The absolute necessities will skyrocket in cost. Think fuel and food. As all money will be diverted to the essentials, what is left for the rest? Your Harley, Grand piano, fancy second home? Massive deflation. For sale signs everywhere. Sell it for next to nothing or let it sit and rot.
Pretty much a spot on article. Inflation has been running rampant. I used to get cucumbers at 3 for a dollar, now they're 78 cents each. Bell peppers the same way, if you're lucky. Tuna cans used to be 6 oz, now they're 5 oz. A 16 oz can of beans is now a 15 oz can of beans or chicken broth. Pretty soon, this trend will accelerate out of control.
Oh no! 0.5oz cans of tuna! You can get the glow in the dark tuna cheap though. My favorite, ice cream, has shrunk in size too.
"...loss of confidence in the dollar and its repatriation to our shores"... Sounds like what China has been doing. Getting rid of the dollar by buying up anything they can. Is that a drop in the bucket or are price increases on the way big time...?
Hyperinflation will never happen if everyone believes this shit. What the central bank actually does is issue credit, bad at that, but everyone including the Mises Institute thinks that it's the most precious.
The Mises Institute then has to fall back on its quantity theory, then scratches its head, or comes up with some bullshit about "high power money not hitting the economy" as to why there hasn't been hyperinflation already due to the rapid expansion in the quanity of money.
And yet product sizes (and quality) continue to be dishonestly diminished with no corresponding changes in price, even as 'ordinary' inflation continues to slowly eat us alive, instead of that putative and equally unseen (and NEVER before seen in all of monetary history, in fact) so-called "fiat currency deflation" that all the pro-Establishment shills continue to threaten us with.
I'd say that the deflationists are the bigger nitwits and/or liars, by far.
That has nothing to do with my point that the Mises Institute considers the $ money, ie. "the central bank continues to print money".
You won't see hyperinflation while the general consensus is that the bad credit of the government is money. Hyperinflation doesn't lead to, it IS is the complete breakdown in the demand for a currency. While the $ is 'money' there's no hyperinflation.
QE doesn't cause inflation. But once the Central Bank prints money to pay interest on its own debts/ reserve deposits, it is Game Over.
The central bank already pays interest on reserve deposits, & where do you think it gets the 'money' to do that?
So why isn't the game over?
The game IS OVER. If you call this a "recovery" then we certainly do not need any QE.
Stop QE completely as it is not needed since we are in a "recovery".
That would be genuine.
The economy has not recovered. We are currently in a DEPRESSION.
SINCE YOU BUY INTO KRUGMAN'S BULSHIT...Even Paul Krugman has declared that the United States is...IN A DEPRESSION.
The game IS OVER. There has been NO RECOVERY from 2008.
So stop the BULLSHIT.