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The Monetary Endgame Score To Date: Hyperinflations: 56; Hyperdeflations: 0
We won't waste our readers' time with the details of all the 56 documented instances of hyperinflation in the modern, and not so modern, world. They can do so on their own by reading the attached CATO working paper by Hanke and Krus titled simply enough "World Hyperinflations." Those who do read it will discover the details of how it happened to be that in post World War 2 Hungary the equivalent daily inflation rate of 207%, the highest ever recorded, led to a price doubling every 15 hours, certainly one upping such well-known instance of CTRL-P abandon as Zimbabwe (24.7 hours) and Weimar Germany (a tortoise-like 3.70 days). This and much more. What we will point is that at no time in recorded history did a monetary regime end in "hyperdeflation." In fact there is not one hyperdeflationary episode of note. Although, we are quite certain, that virtually all of the 56 and counting hyperinflations in the world, were at one point borderline hyperdeflationary. All it took was central planner stupidity to get the table below, and a paper with the abovementioned title instead of "World Hyperdeflations."
Full table:
The full working paper by Steve Hanke and Nicholas Krus below (pdf)
h/t @GTCost
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It doesn't matter if one is scamming the system or not... it's simply about being held accountable for our word to repay. If we cannot pay, then the law has provided us with a safeguard from debtor's prison, bankruptcy... Note: the law has eliminated this safeguard for some student loans due to regulatory capture and/or the simple return on campaign contributions.
Lucius Corneliu...
But Akak has proclaimed:
"nor deflation (that latter of which is absurd to even suggest, being historically unknown and logically impossible under a fiat currency regime),"
So deflation in Japan cannot be.
/snarc
Where has Japan experienced "deflation"?
Both the total money supply, and overall consumer prices, have NEVER fallen since 1989, only risen (one must, of course, not rely on manipulated Japanese government figures for this data, although they are perhaps not as egregiously manipulated as they are in the USA).
The collapse of an asset bubble (or multiple asset bubbles) does NOT constitute 'deflation' --- unless one wants to claim, as Karl Denninger has flat-out and idiotically done, that assets such as real estate and stocks are somehow 'money'.
Akak
Go get yourself a fistful of dollars and buy some tangible things. We have inflation and deflation alive and well, living side-by-side.
All the physical assets being scrapped for China, are the result of collapsing prices in plant and equipment.
And if you are blind to the inflation in necessities, I cannot help you there.
The price indices are, otherwise, entirely academic.
K
Your argument makes no sense whatsoever. Inflation and deflation can NOT exist "side by side" --- they are mutually exclusive. The total supply of money cannot simultaneously be expanding AND contracting at the same time. And for the last time, falling prices of a particular asset class are NOT 'deflation', just as selected rising prices are not 'inflation' (although each, when economy-wide, can be indicative of the respective phenomenon).
You and your precise definitions. Next thing you know you'll be saying that A=A. Personally, I think it's a cult.
Yes, I must admit to belonging to the cult of Radical Definitionism Extremists, which is purely religious in nature, and which relies on pure selfishness, whatever definition for "selfishness" one chooses, however incorrect or inappropriate.
Why are you so angry and violent?
I guess because I am only following in the footsteps of the hero of all selfish Radical Definitionism Extremists, Alan Greenspan, who although having routinely violated all of the principles of Radical Definitionism Extremists, once called himself one such, so that automatically makes him the true spokesman for the movement.
Akak, the correct academic definition of inflation is an increase in the money supply. Deflation is the reverse. That strict defenition was cooked up when central bwankers created money, today retail banks create money out of thin air and so do a myriad of other entities, from Visa and Mastercard to foreigners spending/exchanging their currency in your currency. So academia are, as per usual, defunct
i think we mere plebs use inflation and deflation terms correctly as prices rising or falling. But the bigger point is inflation and deflation are set in commerce and society, not by central command
The title of this piece,
"The Monetary Endgame Score To Date: Hyperinflations: 56; Hyperdeflations: 0
..should actually read...
Deflation of Assets - minus $14 Trillion
Inflation of Money by huffing puffing Bubble Ben - plus $4 Trillion
so Bubble Ben has been slaughtered. An academic who has "studied the Great depression" and concluded the Fed could turn back the tide has done nothing of the sort. The whole point of Bubble Bens actions since the deflationary whirlwind in 2007 has been to hide the carnage under a rug, in worthless derivatives, Fanny and Freddie, the sub-prime mortgage mess, the imploded Banks books etc.
He's plugged some holes, stuck his fingers in some dykes, even bought up deflated bank assets but the poor sod can't sell them to anyone because in the end the market determines the price, he just can't fake it (another clueless academic gets skewered)
so the economy has already re-set, the deflationary collapse in stock, property and other asset prices already occured (post 2007) wether Bernanke or economists (80% of whom are directly or indirectly funded by the Feds gravy train) like it or not
My point is commerce and consumers determine inflation and deflation of prices as individuals in our everyday decisions. And that can be a Molotov cocktail of inflation (eg. rising oil prices) and deflation (eg. tanking property prices). They can co-exist because they do co-exist.
they cannot co-exist with the academic definitions you've been given but as always reality has a nasty habit of showing academia to be a bunch of dipshits with their heads stuck up their arses (no surprise there then)
There will probably come a tipping point when one over-powers the other, such as Weimar Germany or Zimbabwe or a deflationary melt-down as per the 1929 Depression where you couldn't give property away for 10 Cents of the Dollar
And the sisters were none too happy about his interference in that market!
+1 can I be the treasurer of this cult? RDE! RDE!
You know what happened to the last treasurer, right?
Inflation and deflation can exist side by side. Read this for more info and an explanation on how it happens :
http://www.zerohedge.com/news/observations-engineer
Where has Japan experienced "deflation"?
Stocks:
S&P500 meet your twin sister Nikkei
http://www.google.com/finance?q=INDEXNIKKEI%3ANI225&ei=RIVCUNCMAYa0iQK1N...
RE:
http://www.doctorhousingbubble.com/wp-content/uploads/2011/05/comparing-...
Consumer Goods:
http://www.inflation.eu/inflation-rates/japan/historic-inflation/cpi-inf...
This is our future, a future where banks never take losses by perpetual support of the government.
some very important countries on that list ...
Hyper-deflation? 1930's was a pretty good example of massive deflation. So is this period if you discount the transfer of debt to governments/effects of ZIRP on asset prices.
The underlying [real] price is what's important, not the fantasy price that only temporarily distracts.
After every absurd acceleration of prices, comes deceleration. The job of Central Bankers is to keep their criminal friends stuffed with fresh fiat to front run other investors/gamblers.
In other news...
'No refusal' Labor Day weekend to combat DUI in Shelby, Tipton countiesA new "no refusal" law allows law enforcement officers to obtain search warrants and have blood samples drawn if drivers suspected of being under the influence refuse blood alcohol tests.
http://www.commercialappeal.com/news/2012/aug/31/no-refusal-labor-day-we...
Police admit to infiltrating Occupy Austin, may have acted as provocateurs
They may also have gone further, acting as provocateurs to encourage the use of lockboxes or “sleeping dragons” — lengths of PVC pipe into which protestors insert their arms to make it harder for police to remove them during a demonstration.
Seven protestors who used the devices while blocking a port entrance in Houston last December 12 have been charged with a felony and face jail terms of from two to ten years under what the Statesman calls “an obscure statute that prohibits using a device that is manufactured or adapted for the purpose of participating in a crime.”
http://www.rawstory.com/rs/2012/08/31/police-admit-to-infiltrating-occup...
Ron Paul on Jay Leno 9/4/12 to make special annoucement
http://www.dailypaul.com/252263/ron-paul-on-jay-leno-9-4-12
I'm not sure what's new about laws that require DUI suspects to submit to testing... refusal to participate in testing is at least as bad, if not worse, than being found guilty of DUI after submitting to the tests... given the necessity of timely testing, it's pretty obvious why police would be allowed to do this... I'm virtually certain this has been OK'd as a cursory type search by the SCOTUS for decades (no right to have a lawyer present, etc.).
The other aspect is that, practically speaking, the laws on the books typically state that the officer's testimony is sufficient to convict... so there really isn't any necessity to be as intrusive as a blood test... I think they should be forced to pick one or the other.
Please change your screename from 'Macho-Man' to "New Soviet Man" or "snivelling statist" at your own discretion officer
Actually that should be amended... the penalty for refusal is as bad if not worse than actually testing positive...
and no, I actually believe in incredibly limited government... however, I think even the most diehard libertarians are going to have a hard time justifying rendering officers impotent to investigate driving while intoxicated.
The way the whole process works is that by virtue of applying for a driver's license, you consent to the laws of the state. In this case, that means that you consent to a search in the event there is probable cause to suspect you are driving under the influence... if you refuse, then the crime for refusal is often worse than the crime for submitting (incentives and all). So, you can refuse the test if you want, but you'll simply be found guilty of the crime of refusal...
While I generally have a problem with a large portion of our statutes, I'm having a hard time giving much sympathy for this cause... it should also be noted that this SOLELY applies to DWI cases... but the ultimate threshold requirements aren't any different than other crimes... although, as previously stated, the statutes should be such that the law has to choose whether officer testimony is sufficient to convict or if people are required to submit to testing... presently they have the best of both worlds.
Yesterday when I made the same claim this paper makes I wasn't prescient, I was simply stating what I believed most everyone who is around economics knew to be true..... those who argue deflation causing the most damage will be horrified (if they live through it)by another Great Depression.... but as has been pointed out the game has totally changed since 1929 and this time around it will be so horrid people will not want to live through the carnage. Yes carnage. Billions will perish.
OK, have a nice Labor Day weekend.
Ask an Argentine how nice is it was to live through their hyperinflations. Not exactly a cake walk.
Argentina has mild inflation right now,official government figures are
much lower than unofficial ones, so it not surprising that the Argentine government makes it "illegal," to publish those statistics
Argentina inflation: shoot the messengerhttp://blogs.ft.com/beyond-brics/2012/08/28/argentina-inflation-shoot-th...
Consumidores Libres’s fortnightly grocery price index was published last Friday in Clarín, the nation’s largest newspaper. The index showed that consumer prices had risen 17.5 per cent in 2012, three times the rate reported by the country’s national statistics agency, INDEC.
Billions? Dang, and I thought I was a pessimist. Any ZHer who perishes hasn't been paying attention. Here's to us survivors.
Almost.
It goes like this. "Any Zher who perishes hasn't been praying"
I wish you well.
In the article the point is made about the cost of bread in the Weimar Republic. The cost of one loaf of bread eventually exceeded by a huge geometric ALL of the money then currently in existence in the WR. If food shortages and inflation, both of which are coming on rapidly, then yes, billions out of the seven or so billion on the planet will perish .... by one way or another.
You'll make it ..good luck!
I'm long flour and yeast and don't think I will take food stamps.
Hyper-deflation doesn't happen because its not a 'hyper' type of event. It's a slow, lingering thing, like the current Japan.
Deflation is a natural course of events countered now by a central bankers inflationary fiat money printing scheme. Hyperinflation is a political event deliberately induced by the political class or more directly the central planners to remain in office or at least avoid swinging from the streetlamps. The banksters would never allow hyperinflation if they could help it because they lose money in that event. Only when they saddle you with an inflationary target of 2% a year are they happy as they are really vampires and want to keep their host alive. If you know the time value of money equation you can see that a 2% inflation robbs the working adult of an enormous amount of income over a 40 yr career.
Help me out here.
If hyperinflation was purely a political event the how can an event such as several years lack of rain thus diminishing the crop output, leading to famine and rising prices become a political event? Are there no natural disasters of a significant magnitude to induce inflation cum hyperinflation?
Example. Say the Yellostone caldera pops again. Most scientist agree that it alone, if large enough, would probably wipe out mankind.
Political?
You have no underastanding whatsoever of inflation. The simplist thing I can say is that hyperinflation would NEVER be allowed by a bankster ever. That being said they do not control ultimately the FORCE of government and when things become so dire the politicians will wrest the currency from the central bank and attempt to print themselves safe. I would suggest The Theory of Money and Credit 1912 by Ludwig von Mise. www.mises.org
Pussyfication of Amerika and the sheeples continue to beleive in Greedy Ole Pig and Dumbo Lies. Yeah shows inbred fucks. Future of Amerika- Drugs, Prostituiton.
Future of Amerika-Drugs, Prostitution." Drugs and Prostitutes cost money. Future of Amerika=hunger, lights out, no interenet, "civil unrest"; (which will be very un-civil).
What we really have is a Biflationary Depression headed towards an inevitable hypeinflation. The velocity of money has fallen off a cliff at the same time commodities are under huge pressure. SHTF comes soon.
http://www.futurnamics.com/biflation.php
http://www.bloomberg.com/news/2012-08-31/williams-calls-for-at-least-600-billion-more-in-fed-purchases.html
more Ctrl-P. Sky is the limit?
Yes the ultimate end game is hyperinflation but we are not there yet.
The state the Western world finds itself in is one of extreme overleveraging. There simply is too much debt. Debt simply cannot go up (except of course in the case of government which can always print and borrow more) therefore deleveraging puts deflationary pressure on markets in proportion to their levels of debt. Housing, commercial real-estate and the impending education bubble are prime examples. Everything else food, fuel metals etc are in an inflationary state.
http://www.altmediapost.com/articles/inflation-and-deflation-at-the-same-time
World food prices jumped 10 percent in July-World Bank
http://in.reuters.com/article/2012/08/30/worldbank-food-prices-idINL2E8JU7WS20120830
Barclays makes £500m betting on food crisis
http://www.independent.co.uk/news/business/news/barclays-makes-500m-betting-on-food-crisis-8100011.html
The $16T US debt = massive inflation. It's already here.
(Hyper)deflation is just not possible because it means everything is free = no production, no exchange, no society.
War will come into the equation.
War is good for the banksters. Support both sidez and report first that the lozer won. Then make lotz of $$$ when it becomes clear that the winnar wonz. Buy the rumour, sell da newz bitchez!
Hallo bitchez. Gehen Sie lange auf dem Radbarrel, Tau, Kettensäge und entfernten Autostarter-Fertigungsindustrien.
/Sarc
Ministry - Faith Collapsing
When a major oil producing state stops accepting fiat dollars in exchange for their precious, finite resource it will be "game over" - as in Instant Hyperinflation. But not until then. As long as the "petro-dollar" lives, there won't be any hyperinflation. And the "petro-dollar" has the might of the US military behind it.
I have no doubt that eventually the petro-dollar will die. I just don't see it happening any time soon.
Thats the trouble with seeing into the future, no one can.
That's why you look into the past to see your future....
Step One, Bow to OPEC executives who enjoy Kissinger’s Federal Reserve Petrodollar recycling program.
Step Two, grease the wheel by pretending to combat the cartel. Stealing money from taxpayers to create new energy efficient cars and mandating new MPG regulations. Meanwhile, gas prices will continue to balloon. Just ask the idiots in the UK. They downsized their cars into a fucking golf cart status. Yet, petrol cost continue to rise.
The trouble with the future is, no one sees it coming.
I know what's around the corner, I just don't know where the corner is.
Anytime you abuse something, you subject yourself to "unintended consequences". I believe we're going down that road...
Inflation/Deflation rule number 1:
INVESTMENT MONEY GOES WHERE IT CAN CREATE INFLATION.
- Crude oil WTI has gone from $40 in 2009 to $95 this week. This is 120% inflation, hence it's hyperinflation
- Car prices are going lower and lower and actually car manufacturers are selling below cost, like Hyundai and Kia in France. This is deflation. There is a huge overhang of cars over produced.
Question 1: Do you see any investment money rushing into car industry? The answer is, no, due to deflation in that field. Nobody needs to buy cars every day.
Question 2: Do you see any investment money rushing into crude oil? The answer is, yes. Everybody has to buy crude oil every day in the form of gasoline, plastics, food refrigeration etc. Hence, crude oil and life basics are in hyperinflation.
Real example: Somebody working in the company I work for, as an assembler, a philipino guy, bought a Toyota FJ cruizer in 2009 when oil was at $40. Last week I saw him with a Toyota Yaris that his wife was using. FJ Cruizer hasn't been used for 6 months already. I asked him why: He said: Are you out of your freaking mind? Don't you see the price of gasoline? I can't afford to use the FJ Cruizer.
I remember Yugoslavia. People didn't suffer from not owning cars. People suffered for shortage of gasoline and shortage of food due to hyperinflation.
Same in USA: 100 million people are suffering from hyperinflation thus receiving gov benefit in the form of food stamps etc.
If we for a moment assumed that these 100 million people were living in a separate country, IMF would have immediately declared hyperinflation as a problem there.
Kia Sophia Hurry up, everyone is picking up on this $9,795 Government subsided taxpayer deal ..
My God, less then 10g!
Great acting though.
converting a global fiat money system into
a mechanism for property, national and
spiritual confiscation thru usury takes time,
years. it takes generations or more
to be done in such a way that the perps walk
away with the loot, it could/will go on for
years? in the end everyone will be proven both
right and wrong and have wasted the better part of
their lives and potential avoiding the truth.
" first by inflation, then by deflation you and your
children ..." and all that. everything is happening
and will happen, that is in motion, just not all at
once, per se, though it is all, at once, present.
perspective, individual as shaped and shared, provides the snap shot and
cognitive imagery, like a virus or a snake....
here this, link from pjb, explains it.
http://www.youtube.com/watch?v=gHCUodc-EKU&feature=related
Pendulum Waves .
maybe that's how the planets revolve around the sun?
No choice but to print. Any other "austerity" stuff is politically not viable. As soon as voters begin breaking windows, buring buildings, etc. the politicans will cave in.
They will print and print alot to meet financial obligations and simultaneously devalue the debts. It's classic, it's inevitable --- it's History!
yup.
the system is like a train and rolls on tracks.
you can say there are other tracks and other
trains going the opposite direction but you, one,
can only ride on one train at a time and only
in one direction if one has a predetermined
destination. like this.
Little Feat- Two Trains (Live) 9/19/1974
http://www.youtube.com/watch?v=1Qnn_B0xILU
.
so is ben the guy or is the fed the "body" that
will default on their entire history and monetary
system. hmmm? there is room for doubt .
plenty of room for doubt in the skies where
helicopters deliver life support with precision
and extreme prejudice.
just because hyperdeflation hasnt happened yet, doesnt mean it wont happen now tyler! theres a first time for everything! and anyway .. i think this paper is referring to HYPER deflation .. we dont have to go back that far to see 'regular' deflation at work .. Western economies in the 1970s being the latest example.
What the Hell is "hyperdeflation", anyway?
In hyperinflation, the value of the (fiat) currency approaches zero. So are you suggesting that somehow, in violation of every monetary principle, all of monetary history and common sense itself, we might see the value of our fiat currency approach infinity? Really?
Pass me some of whatever you are smoking, dude.
these academics/economists from John Hopkins University are defining hyper inflation/deflation as a 50% price change per month
Does the Flopbook IPO share price qualify as hyper-deflation then?
This is completely ridiculous . . . there's no way theyre be people pushing wheelbarrows full of paper banknotes.
We have credit and debit cards nowadays . . . and many of us are too fat and outta shape to do any physical work, anyway.
The Zimbabwe you've never seen
Zimbabwe inflation: 50 billion dollars in real consumerism value
Sure is a beautiful city lacking taxation inflows. Let’s just add another zero on our fiat, this will kick the can down the road further..
http://www.rbz.co.zw/
104-N10007. Looks like a good place to skim money and backdrop UN humanitarian development goals. Yea, that’s the ticket….
Doesn't it depend on your reference? There would be hyperdeflation of a gold coin as the fiat currency in question became worthless.
deflation propaganda priceless
why I remember buying my 1st car for only $30k ....no wait that's today
What we will point is that at no time in recorded history did a monetary regime end in "hyperdeflation."
That'll be because in a deflationary environment, money is INCREASING in value ...why would the monetary regime end if its 'asset base' is sought-after by both commerce and society?
"In fact there is not one hyperdeflationary episode of note."
The 1929 Great Depression had property, farms etc selling for 10 Cents on the Dollar, many not even receiving bids at that level. Why? Because anyone with cash/money valued it above deflating assets
Both the USSR and Communist China suffered grinding deflation over a period of decades as their command economies destroyed all productive wealth capacity and simply emptied wealth in an ever decreasing cricle down the sewer.
Because 1929 and both Communist Regimes do not fulfill the economists definition of 'hyper' (a blinkered, purely academic, exercise) the authors implication deflation does not crush economies
This research adds zero additional knowledge to the field (slurry farm?) of economics ...no change there in 2,500 years of windbags
macro-micro. the terms, deflation/inflation
become useless or
tools to manipulate minds, worse than useless,
deadly weapons conveying illusions. ( science? )
.maybe a dark art that enables stealing and lying
in broad daylight, so obfuscated that it would take
a haz-mat crew a month and a billion dollars just
to clear the air.
what does it cost to get next to the source of free
money in this town anyway, or to become a judge or
a senator? what is the price tag? in federal reserve notes, just asking.
i totally agree the field of economics is little more than a base station for meddlers
you can fuck up the economy by meddling but those 'On High' (politicians etc) cannot improve on it... the economy is best served un-meddled, it is like society self-regulating
Not sure why the "hyper" modifier is required, but the US's monetary regime in 1933/34 ended as a result of deflation and consequent bank failures. The gold coin standard that had existed prior was demolished by executive order. It was replaced by a fiat standard. The gold "exchange" standard (whereby official institutions could trade gold among themselves...but not individual citizens) would not emerge until Bretton Woods in 1945. I know Hanke knows this, so that's a bit of a puzzle.
One other point, a key purpose of an inflationary regime is to inflate away debt obligations of the state. But the US's largest liabilities (such as Social Security, Medicare, and Medicaid) are indexed to inflation (albeit not perfectly and by a measure that can be massasaged by the govt). So how does an inflationary policy get rid of this indexed debt? After a hyperinflation, such obligations will remain, only they'll be nomially larger. But, you say, they'll just cancel the indexing and then proceed w/hyperinflation. Perhaps, and that would be a good tell were it to happen.
The key it seems to me is to focus on who the Fed works for (hint, it isnt you and me). The banksters do not want to be repaid in depreciating dollars. It seems more likely that they want the underlying collateral.
+1 (your green arrow wasn't working!)
the bwankers want what they always want, a siphon into productive peoples pockets... the scam is called Govt and the tax code
Hey Mario, I think you have a flat tyre. You should try inflating it.
Excellent paper, it has a gamut of modern inflation/hyperinflation episodes, many I had not heard of before.
Obviously, there is no analysis as to the cause of these episodes as all are different, some were caused by external counterfeiting (US hyperinflation during the Revolution), some by unsterilized gold flows (Spanish/European hyperinflation during the 16th century and Weimar/Eastern European hyperinflation during the 1920s). It would take a thick book to do these events justice.
Meanwhile:
These and other hyperinflations were currency arbitrages: Weimar's was between papermark and goldmark or extra-Weimar hard currencies circulating informally within the country. Zimbabwe currency arbitrage was between Zim-dollar and South African rand or US dollar. Hungarian arb was between forint and Soviet army currency. Without the multiple currencies there is no hyperinflation: one currency is sold at increasing discount to obtain the other (hyperinflation in Iran currently trading rial for dollars, Belarus trading ruble for euros).
Deflation has a different operating regime, there is no such thing as hyperdeflation. Enterprises fall bankrupt due to a shortage of funds: the evidence of deflation is business failures and unemployment.
There is a sub-optimal level of circulating currencies but firms fail before the complete absence of currency. Should deflation reach the point where the government is insolvent there is no official currency: the outcome is free banking. This is a similar outcome to hyperinflation, people invent their own currencies.
:)
Inevitable as more money has to be created to pay for increased production and consumption, and as more move to the service industry, esp. finance, then even more money is created.
Excellent working paper; also I speed dialed the Cato Institute which offered it, as they seem to have quite a few interesting articles on modern economics that I will be reading. Thanks to Zero Hedge; good reporting.
State Senator Tom Davis Speech at THE RON PAUL Fest Tampa 08-25-12
http://www.chinamedia.com/2012/09/01/taiwan-signs-yuan-clearing-deal-wit...
Since the late '90s, gas has nearly quadrupled, silver and gold have nearly quintupled, groceries and building materials have more than doubled in the last three years. It may not be 'hyper' inflation, but it sure as hell ain't 2%.
"Green Book" country chapter (1999)
Sorry.. They have been building this government initiative program since the formation..
It’s a laugh to watch new media retractions.
http://www.clubofrome.org/
Kissinger: Obama Will Create A New World Order - 2009
Kissinger: 2007
Kissinger: NBC Interview September 16, 2001
Helmut Schmidt über Bilderberger
We have two clowns to vote for. Many of us know the outcome if one is voted. We call it scenario 1 or scenario 2 teleprompter MSM briefing..
The Globalists' Agenda
This is not about me, this is about you. A few keystrokes will reveal who they are & who monetarily funds their pocket book.
Have a great Labour Day weekend
The deflationists tend to be academics and theorists who are so obsessed with their own theories that they can't sniff what's in front of their nose.
They also tend to be idealists. They "want" deflation to happen so that their own cash savings can buy up everything on the cheap.
The analogy is that if somebody showed up on your doorstep and put a gun to your face, and you believe and tell the guy "no, you won't shoot me, you're a good human being at heart." That's the deflationist.
Whereas those of us who know what's going on try to protect ourselves in whatever way we can.
How about I hand you a crisp $100 Federal Reserve Debt Note. Depending on the wind, that $100 dollars either loses/gains value. If the dollar is down, your pocket is picked; because consumer items are smaller. On the latter end, when dollar is up; price of goods become lower and peasants can spend more. The clusterfuck issue right now, debasing the dollar is a cheap way to pay off the Federal Reserve interest payments owed at nearly 16 trillion dollar debt obligation.
http://www.usdebtclock.org/
Who looks silly now? Your deflationist argument is solely based on the fact of an insolvent derivative banking balance sheet. Basel III is coded as another ‘too big to fail bailout.’
Tag, your it!
The deflationists tend to be academics and theorists who are so obsessed with their own theories that they can't sniff what's in front of their nose.
*************
Oh really-then you must see more money in the system than debt?
Or do you think that there's lots of money available with high unemployment and shrinking asset prices (collateral) and decreasing wages to pay off this always overlooked debt load?
You must have something other than theory to explain it?
Money (cash) supply
http://bit.ly/11YmbW
Fed balance sheet-
http://bit.ly/L9EotK
Total Credit Market (debt owed)
http://bit.ly/zCOfdJ
master obama doesn't like to keep score when we are all equally losing
As the first commentor says: We have never been off a Gold Standard: not for the past ~8,000 years - never for one moment; The Gold Standard is here to stay and what it is saying today is thre Fiat currency that are being shilled as good, the equities that are we hold dearly, are off any known value of integrity, and our monetary, financial, economic, and fiscal Policies that we have adopted, SUCK.
Primarily the GOLD sysytem of this Epoch of Man is saying that the Banking System is a Fraud:
Most Economists are Fraud, especially those making decisions that impact on Society
Our Politicans are Rapacious Liars and Thieves,
Our Bureaucrats are all but a few, non-thinking, blind, evil servants of the Banker Gods
and if we do not soon Wake up to these facts, that are staring you in the face and roaring at you,
Society is going to Collapse into a Hell where existence depends on might and weapons;
or
He who has the guns MUST kill to Survive.
Gold's value never changes but all false values drop from the Minds of men,
This is what is happening Today:
Our Value Systems are being Reset:
We are Human Beings - we are evolving - we are starting to see the falsity of our socio-economic organizations
and we don't like it - we don't like the crooked "status quo" as it allows us to be scammed and enslaved.
vs the status quo - They, don't want it to change, because they can't see it - they are NOT evolving
Let the Dead Buring their dead
Our Choice consists of:
1. Rise to our Humanity, or
2. Fall back into Barbarianism.
The choice is ours.
Young Fashioned Ways/The London Muddy Waters Sessions
http://www.youtube.com/watch?v=mPmj0wiTX6w
Thought exercise... What would hyperdeflation actually look like and is it even possible in the real world? Prices go to zero, not going to happen. Or imagine you take out a mortgage on day 1 and by day 2 your debt will be double or triple in real terms. In just a few days your mortgage would be impossible to repay. Any debt would be toxic the moment you take it on. Under these conditions, you'd expect the economny to reset and at a stable lower, sustainable level. People would need to be willing to accept a more modest less leveraged. I think the closest you'd get is Japan, but then won't that require some hyperinflation to wipe out the unmanagable government debt level?
Interesting.
It could be worth doing some research.
Crude oil in 2009, from $147 to $40 in few months.
Remember the Zero Hedge article about
"The Flounder Meter."
http://www.scribd.com/doc/103841145/IceCapAssetManagementLimitedGlobalMarkets-August-2012
Page 8:
In effect, we have two giant forces coming head to head.
Man-made deflationary force coming in one direction
and the man-made inflationary response
coming from the other direction.
There can only be two outcomes, and neither one is pleasant.
Should the deflationary wave prove too powerful,
the global economy is headed for a very deep
and prolonged recession.
Should the inflationary wave overcome,
one should expect the global economy
to produce low real growth
but with hyper inflation.
At this point in the game,
deflationary forces are overwhelming reflationary efforts.
In other words, the total losses
from the ongoing financial crisis
continue to be greater than the
total amount of money printed.
... 56 documented instances of hyperinflation ...
NO time in recorded history did a monetary regime end in "hyperdeflation."
Those historical facts confirmed what I have expected.
However, the problem is that everything might go crazy.
Economic collapse may easily become insane world war,
correlated with nature also going nuts at the same time.
But nevertheless, as long as human beings are still
in control of their civilization, then the "end game"
of an hyperinflation, after wilder oscillations, with
significant deflation episodes, is very probable!
Crude oil going from $147 to $40 in 2009 was a hyperdeflation episode.
Of course, I must agree!
Overall, the facts have been more money *made from nothing in the first place* is being destroyed faster than new fiat money is being created to replace it ... However, the nature of the break down is not linear! It is wilder oscillations, from one extreme to the other, whip sawing back and forth ... The "end game" for such fiat money excesses has ALWAYS been hyperinflation to self-destruction. We are riding the roller coaster ride, where a bust followed a boom ... The problem is that these wild oscillations eventually go out of control, and the last desperate attempts to fix the problem are what finally wipes out the frame of reference, i.e. final hyperinflation ...
After we crash through the fundamemtally fraudulent financial accounting, real values MAY return, in some form. However, I still think that return to commodity based money is grossly over simplistic and delusional, unless one includes murder as a commodity. THE OVERALL NUMBERS ARE INSANE! The books are so far out of balance that nothing within that system can be imagined to fix it ... I believe that includes any kind of return to any past ideas about what money was!
The long term outlook for oil is hyperinflationary ... Any creative alternatives on the other side of that have to break through the established fraudulent fiat accounting systems to actually be implemented. However, that requires we up-date our militarism to the level of mass destruction weapons, since that is what is keeping our fiat money system going ... and why the final self-destruction of that system is too terrible to contemplate, and is being postponed as much as possible, for as long as possible.
Every monetary regime ends with hyperdeflation, because the regime is eventually reattached to some anchored currency or gold.
This article is also misleading not only because it fails to account for what happens after hyperinflation, but it fails to note that hyperinflation is impossible if synchronized globally, because all production would cease globally. Hyperinflation only occurs when there is a flight from one local currency to more stable ones.
There are no stable currencies of sufficient size in this current global debt bubble, except for gold. When the masses start running into gold, that will be the end of the high inflation, and we will dump into a massive deflationary depression. I explained this further at the following linked comment.
http://www.zerohedge.com/news/3200000000000-question-why-housing-has-muc...
All my comments:
http://www.zerohedge.com/search/user_comments?name=Shelby+Moore+III
Mish does not see hyperinflation arriving anytime soon.
http://globaleconomicanalysis.blogspot.nl/2012/08/reader-questions-on-hyperinflation.html
Who to believe?
Globalized hyperinflation has never happened and never will. Complete nonsense to extrapolate localized hyperinflations to global reserve currency.
Deflation will cause defaults, bankruptcies, depression but a currency won't die because of deflation.
How can a currency die when its buying power increases? That scoreboard of 60:0 is pretty meaningless
Deflation will cause defaults, bankruptcies
***********
Defaults and bankruptcies cause deflation-someone ended up with a hole in their balance sheet-their money supply decreased-
Why can't I print my salary?
hmmm ... the "pdf" link does not provide a pdf, it only links to a twitter account ... which is a bit annoying.
If you're after followers you could just say so, I don't think people would mind too much.
Don't you have to have inflation before you can have hyperinflation? Rhetorical...
Anyway, deflation rules the roost. No wage inflation, home equity is destroyed and continues unabated. Zero velocity of money, M2 is actually now contracting.
Deflation is here for a while, not sure how many years but my guess is at a minimum 3. Then we can discuss inflation but this is a tad premature IMHO
The argument goes that the Fed is not printing money, it's expanding the monetary base through electronic 0s and 1s in reserves to the banks. The banks can choose to turn these reserves into currency, but it remains sitting there. So the Fed printing is not entering into the economy.
What we're getting is deflationary recession. The banks are not creating money through credit creation, at least nowhere near the scale as before. They've stop lending even to each other.
Seems to me the Fed can't even create the inflation it wants. Banks create credit first, worry about reserve requirements later. Fed just handed them reserves and it sits collecting 0.25% interest at the Fed.
Is there dispute to this?
How are we going to get to hyperinflation from this point?
I do see price inflation in certain things. I see price deflation in others, particulary with assets that depend on the credit creation like housing.
So confused, it's hard to make sense of it all.
Is inflation in necessities coming from increase demand from oil from China and other "developing economies" while production remains flat?
Hyperinflation is the abandonment of the currency. In almost every instance on that list, a nation was in the process of disintegrating or breaking out into civil war (Wiemar Germany, Chile and Zimbabwe), being invaded/lost war, or post-empire collapse (Soviet bloc states). The U.S. examples of hyperinflation are the Revolutionary War and the Civil War.
So where is your explanation for how the United States will be invaded and destroyed or break out into civil war? If you don't have a plausible path to total societal breakdown or full blown war where the United States loses or where the outcome of the war is seriously in doubt, you are not going to see hyperinflation in the U.S.
Also, Tyler calls it the monetary endgame. Why would a monetary regime end from hyperdeflation? The currency would become the most valuable asset in the economy! No currency has ever been destroyed by hyperdeflation because it is a bubble in cash.
I want to disagree with the entire concept of this thread...
Hyperinflations: 56; Hyperdeflations: 0
First, there is no definition of hyperinflation in economics, none, it is like the famous quote supreme court Justice Potter Stewart gave us in the pornography ruling in Jacobellis vs. Ohio in 1964, "I know it when I see it."
I ranted on and on in a different thread about what constitutes money and the three attributes anything has to have to be considered money, among them a store of value. Now as far as I am concerned "money" either stores value or it does not, the trickery of a controlled and tolerated inflation target in the one to two percent assumes that people will build that loss of value into their business dealings and ROI calculations. But, that is false for two reasons, one is that they claim inflation is one or two percent but reality on the streets is more like 10-12%, the other is that prices for things we have to buy with this so called money are not even over the economy, supply changes, demand changes, and greed changes. Point being that money is a store of value, on or off, one or two, it stores value or it does not store value, after that it is like Julia Roberts said in Pretty Woman, the rest is just geography.
Hyperinflation can happen without one extra dollar of FRN's put into the system, it does not take red hot smoking printing presses to have hyperinflation, I know when I went to the market today and orange juice was on my shopping list I came home without it because OJ prices are up 80% in two months, for 5 years I never paid more than $2.50 for a jug because it was always on sale somewhere for 2 for $5, granted that sale price is rarer and rarer but this last few weeks the cheapest OJ I can find is $3.89. That is an increase of $1.39 in less than a month, 389/250= 56% rise in a month, no frosts in Florida, no freezes in Brazil, just hyperinflation. A five pound bag of coffee $46, a carton of smokes $55, hamburger $5.59 a pound, these are all multiples of prices paid not that long ago and the rotten thing is that increases are first arithmetic, then geometric, then exponential, then parabolic. And the whole time the Fed and BLS claim there is zero inflation, which has only one possible message, if you think prices are rising then you are stupid and it is your fault you can't get by on your pay anymore.
Last, all hyperinflations end in one of two ways, either TPTB terminate the old hyperinflated money with a new money they intend to hyperinflate, or they end in a deflationary depression. And contrary to the thesis of this thread all 56 "hyperinflations" ended in deflationary depressions. So the score should be 56 to 56 not 56 to zero. The reason we do not use the term hyperdeflation is that we call it by another name, a crash. And just as with hyperinflation there is no definition, but I know it when I see it.