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Peak Monthly Inflation In 1945 Hungary: 12,950,000,000,000,000% And Other Hyprinflationary Facts

Tyler Durden's picture


For some reason, whenever people want to make a historical example of a hyperinflationary period, they always bring up the Weimar Republic, aka Germany in 1920-1923. Yet with a highest monthly inflation of just under 30,000%, Weimar was a true walk in the park compared to the 309,000,000% monthly inflation in 1992-1994 Serbia, but especially to the 12,950,000,000,000,000% inflation that Hungarians had to deal with in the aftermath of WWII. For these and more  comparative examples of hyperinflation, particularly relevant now that the entire world is rumored (for now) to be getting ready to print, see below.


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Fri, 06/15/2012 - 12:48 | 2529703 carbonmutant
carbonmutant's picture

Scientific notation... Bitchez

Fri, 06/15/2012 - 13:01 | 2529750 drink or die
drink or die's picture

Carrying your cash in a wheelbarrow is so 20th century.  The preferred method of transport is wrapping it up in a Spiderman beach towel and slinging it over your back.


Fri, 06/15/2012 - 13:06 | 2529766 Think for yourself
Think for yourself's picture

If we're talking about actual money, I thought it was sewing it into your hems? It's definitely my preferred method.

Fri, 06/15/2012 - 13:44 | 2529942 Pladizow
Pladizow's picture

Credit cards have replaced wheel barrows - making hyperinflation so much easier!

Fri, 06/15/2012 - 13:51 | 2529972 Chaffinch
Chaffinch's picture

The problem with credit cards and hyperinflation is that the machines which read them can only cope with 'small' numbers.

Fri, 06/15/2012 - 14:05 | 2530016 Pladizow
Pladizow's picture

If true, easily remedied with software.

Fri, 06/15/2012 - 15:03 | 2530322 Shameful
Shameful's picture

Nope.  Most should be able to handle double precision floating point numbers.  Means can hit 1.7976931348623157 x 10308 before a problem happens.  If we are seeing transactions in the 1 x 107 for normal people (IE restaurant) we are already well, well off the deep end.  Getting to the upper bounds of even a single precision point number (3.4028234 × 1038) is well past currency death.  So have no fears for the tech ability to handle a digital hyper inflation.

Fri, 06/15/2012 - 15:26 | 2530422 francis_sawyer
francis_sawyer's picture

It could never happen here because... because... because... Obama is so smart!

Fri, 06/15/2012 - 16:43 | 2530696 max2205
max2205's picture

And because the dollar would be $0.50 to the euro

Fri, 06/15/2012 - 18:39 | 2530951 johny2
johny2's picture

Where the $$$$ is the Robot Trader?

Sat, 06/16/2012 - 11:30 | 2532088 RevCBH
RevCBH's picture

Financial systems don't use floating point math because of rounding errors ( Retail machines can deal with integer cents instead of fractional dollars. If more precision is required, simply deal with integer amounts of smaller fractions. Legacy embedded systems (i.e. those card reader thingies at the grocery store and gas station) likely deal with 32-bit integer values at best. That provides a maximum of 4,294,967,295 cents or $42,949,672.95 per transaction, well within the scope of a severe hyperinflation.

Fri, 06/15/2012 - 13:09 | 2529779 UP Forester
UP Forester's picture

Sure makes pre-paid Visa cards valuable.

Scientific notation is easier to fit in a Spiderman beach towel full of plastic rectangles....

Fri, 06/15/2012 - 13:16 | 2529808 Dr. Richard Head
Dr. Richard Head's picture

Digital currency can be snatched much easier than cash in hand. 

Fri, 06/15/2012 - 13:43 | 2529935 FeralSerf
FeralSerf's picture

1016% per month is no slouch at snatching.

Fri, 06/15/2012 - 13:29 | 2529875 Kprime
Kprime's picture

It sucks when inflation is so bad your $1000 pre-paid VISA card zeros out the day after you bought it.  You didn't even get to use it.  The fees were inflation indexed.  By the way, next week you'll get a bill for the remainer of the fees that the $1000 didn't cover.

Digital money sucks.

Fri, 06/15/2012 - 17:20 | 2530803 upWising
upWising's picture

Here: check out the rise in value of the Hungarian pengö;

Sat, 06/16/2012 - 09:41 | 2531892 dexter bland
dexter bland's picture

And what was the inflation rate of the mythical republic of Goldlandia between 1980 and 1983 when the price of gold went from $1850 to $650 in real terms? That equates to around 80-90% inflation  for those loaded up with this supposedly inflation proof "store of value"  currency. It didn't bottom out until 2001 when the precious "ounce" was worth one fifth of its former value at around $350 of today's dollars...bitchez.

Fri, 06/15/2012 - 13:03 | 2529759 ACP
ACP's picture

I think the Bernank would call that "deflation" and make a case for more printing.

Fri, 06/15/2012 - 13:09 | 2529780 RationalPrepper
RationalPrepper's picture

+ 1E10

Fri, 06/15/2012 - 13:39 | 2529822 Think for yourself
Think for yourself's picture

To be fair, that is a beautiful case of linear vs exponential thinking. Who would think a harmless 4.62% hourly interest rate could create so much havoc?


Fri, 06/15/2012 - 14:16 | 2530087 Matt
Matt's picture

In comparison, what does the worst case of deflation look like? Did prices ever drop 50% per day somewhere?

Fri, 06/15/2012 - 12:48 | 2529704 ArrestBobRubin
ArrestBobRubin's picture

That's a lotta goulash.

Fri, 06/15/2012 - 15:48 | 2530506 Captain Kink
Captain Kink's picture

it's the same amount of goulash at x1016 the price!

Fri, 06/15/2012 - 12:48 | 2529707 Snakeeyes
Snakeeyes's picture

All the reserves at banks have to be loaned out to get inflation in the US. Banks aren't lending enough to create inflation. A nice Centrally Planned outcome.

The Fed just keeps twisting and QEing the night away while banks don't lend.

M2 Money Velocity has crashed and burning.

Fri, 06/15/2012 - 12:50 | 2529710 CURWAR2012
CURWAR2012's picture

Correct, we in a deflationary  spiral but that is the prelude my friend. The inflation is going to come later

Fri, 06/15/2012 - 12:55 | 2529732 Dr. Richard Head
Dr. Richard Head's picture

So it is like this?

Step 1. deflation to drive down asset prices.

Step 2. inject credit into the hand's of those well-connected in this system first.

Step 3. well connected purchase those assets

Step 4. money flows to the plebes.

Step5. plebes savings worth nothing.  

Fri, 06/15/2012 - 13:03 | 2529760 Spitzer
Spitzer's picture

All you need is a loss of confidence. No printing, no "deflation" no nothing.

Fri, 06/15/2012 - 13:14 | 2529782 Cognitive Dissonance
Cognitive Dissonance's picture

Thus the real reason behind their lies and our willingness to believe the lies.

Faith and belief is the only glue that binds this web together. Remove it and you have nothing.

Poof! And it's gone.

The only reason you accept that $20 in exchange for your goods and/or labor/services is because you have faith and belief that you can "pass it" (notice the same term is used when talking about counterfeit) on to someone else in exchange for what they have to offer.

Wanna play hot potatoe?

Fri, 06/15/2012 - 13:21 | 2529840 Dr. Richard Head
Dr. Richard Head's picture

I have no faith in the paper I exchange for my services; I am forced to do so.  I asked the board to pay me in gold and silver and the look of shock om their face was interesting.  They offered increase in my 401K matching and profit sharing instead. 

I withdrew $9,999.99 in federal reserve debt today and I must tell you, I am passing this hot potato to everyone that is willing to exchange it for something I am willing to value. 

Fri, 06/15/2012 - 13:34 | 2529881 Cognitive Dissonance
Cognitive Dissonance's picture

Point of argument.

While you may not have faith in the future of the USA currency (future being loosely defined as anytime beyond today) at least for the moment you have faith that you can pass your Federal Reserve notes NOW in a "fair" exchange for goods and services.

So in effect your actions declare that you still have faith. :>)

I do understand that you have "no choice". At least not a choice that allows you to remain within the system and enjoy what you currently enjoy for a standard of living. But compelled responses serve as willing responses in this case.

BTW withdrawing just under the limit does not stop the bank from reporting your transaction. In fact, it puts you on the radar for reporting because you are obviously trying to avoid reporting requirements. It falls under the general "suspicious activity" heading of the reporting guidelines.

Fri, 06/15/2012 - 13:46 | 2529957 Dr. Richard Head
Dr. Richard Head's picture

Point of argument accepted and indeed understood. 

Every turn we make is covered in the land o' the free.  Great fun.  I will be looking forward to the call from authorities, after they monitor me for the next few months or years.

Fri, 06/15/2012 - 13:54 | 2529984 Cognitive Dissonance
Cognitive Dissonance's picture

Every now and then I will stop a phone conversation I'm having with a friend or loved one and shout "suspicious" words into the phone. I want my NSA/CIA file to be impressive when they come to pick me up for my initial interview. :>)

Just doing my part to keep the minders employed.

Fri, 06/15/2012 - 13:59 | 2530000 Pladizow
Pladizow's picture

If not already read, 2 books you may enjoy:

1. Money: The Greatest Hoax on Earth - 1971

2. Coin's Financial School - 1894

Fri, 06/15/2012 - 14:03 | 2530011 Dr. Richard Head
Dr. Richard Head's picture

Holy shit....HAHAHAHA.  I do that quite often.  In the middle of a conversation I will usually yell Osama Bin Laden, 9/11, 9/11, jihad! jihad!  Terrorist, bomb plot!  I often think about the poor stooge finding my phone file flagged, where he/she has to go listen to the call. That tard has to listen to a shit ton of mundane conversations about my wife getting her hair done, the kids acting up, cat vomit, whatever just to find me mindlessly spouting off buzz words.  Good times......good times.

Fri, 06/15/2012 - 14:24 | 2530136 Cognitive Dissonance
Cognitive Dissonance's picture

Look honey. Someone else has a cat that vomits.

I guess you were right, that it wasn't "personal" that our cat vomitted exactly where I step when I first get out of bed in the morning. :>)

Sat, 06/16/2012 - 06:45 | 2531664 Arrowhead
Arrowhead's picture

Maybe you will get your own drone assigned?

Fri, 06/15/2012 - 13:59 | 2529994 Pladizow
Pladizow's picture

You are correct, but perhaps he withdrew it from the 401K.

Fri, 06/15/2012 - 13:10 | 2529785 Global Hunter
Global Hunter's picture

Great point it takes a few sellers to say they no longer want paper or digital fiat for their goods or services and the immediate response by the buyer will be "I will increase my bid of paper/digital fiat" to get your good or service and voila.  It doesn't matter how much dosh in circulation at that point.

Fri, 06/15/2012 - 13:22 | 2529844 Dr. Richard Head
Dr. Richard Head's picture

More than a few sellers are already taking this route.

Fri, 06/15/2012 - 13:27 | 2529862 Global Hunter
Global Hunter's picture wife is doing some canning as we speak so I will accept mason jars for my labour!

Fri, 06/15/2012 - 19:45 | 2531042 HungrySeagull
HungrySeagull's picture

Mason Jars eh?

Pretty soon you would have to raise up a Lodge to handle all those Jars.

Sat, 06/16/2012 - 01:11 | 2531450 FEDbuster
FEDbuster's picture

Bullets in various calibers could become the coinage of Bartertown.  .22lr, 9mm, .308 etc....  Be sure to have a couple of years of food, they always restrict the food supplies.

Fri, 06/15/2012 - 13:54 | 2529979 Solon the Destroyer
Solon the Destroyer's picture

Usually what you need is a shooting war.

Most of the inflationary episodes displayed above are correlated to some shooting conflict (either contemporaneously or subsequently).

War makes governments desperate, encourages corruption, tears the fabric of societies, and thus destroys the sheeple's confidence (among other things).

Fri, 06/15/2012 - 13:04 | 2529762 WhyDoesItHurtWh...
WhyDoesItHurtWhen iPee's picture

All your 'flations are belong to us.

Fri, 06/15/2012 - 13:41 | 2529928 Alpha Monkey
Alpha Monkey's picture

I believe it does... from Cato, a story on hyperinflation of Yugoslovia.  This is an example of step 2 to 5.  No reason to assume the same type of psychopaths are not at some levers of power in our country.  Some day, people will lose faith in our dollar as well.  Buy Gold.

On January 7, 1991, the federal government of Prime Minister Ante Markovic discovered that, under the control of Slobodan Milosevic, the Serbian parliament had secretly ordered the Serbian National Bank (a regional central bank) to issue $1.4 billion in credit to Milosevic's friends.

That illegal plunder equaled more than half of all the new money the National Bank of Yugoslavia had planned to create in 1991. The heist sabotaged the Markovic government's teetering plans for economic reform and hardened the resolve of the leaders in Croatia and Slovenia to break away from the Socialist Federal Republic of Yugoslavia.

Without the Croats and Slovenes to fleece, Mr. Milosevic turned on his own people with a vengeance. Starting in January 1992, what was left of Yugoslavia endured the second-highest and second-longest hyperinflation in world history.

Fri, 06/15/2012 - 13:54 | 2529982 FeralSerf
FeralSerf's picture

How does that compare with the misplaced $2.3 Trillion that Rummy said the DoD "couldn't account for"?  (So far it still hasn't been located.)

How much currency was in circulation in 2001?  $2.3 trillion is what % of that?

Sat, 06/16/2012 - 14:50 | 2532465 Alpha Monkey
Alpha Monkey's picture

Probably something like the $4tr handed out to Fed member banks in 2008.

Sat, 06/16/2012 - 10:11 | 2531945 Bendromeda Strain
Bendromeda Strain's picture

Yup - I was looking at that chart above and knew instantly that somebody had some 'splainin to do. I have the 12 digit Yugo Dinar notes tucked away next to my 15 digit ZIM dollars.

Fri, 06/15/2012 - 12:58 | 2529738 Cognitive Dissonance
Cognitive Dissonance's picture


First comes love deflation, then comes marriage printing. Then comes inflation in a baby carriage wheel barrel.

Fri, 06/15/2012 - 13:04 | 2529761 kridkrid
kridkrid's picture

I posted this yesterday, but it makes more sense in this thread...

Inflation vs. deflation is a meaningless conversation.  The monetary system can't be sustained because math is math.  What can't be stopped is the collapse of our debt based monetary system in which virtually all money is loaned into existence with interest attached at its creation.  New debt must be issued in order to roll old debt forward.  Aggregate debt is required to grow or you have cascading defaults.  Deflation vs. Inflation is like choosing between a bullet and a noose.  Either will do the trick.

And I agree with you... first deflation and then, most likely, inflation.... but it doesn't matter.  What's really happening is the collapse of the monetary system... inflation vs. deflation is a policy choice that gets to be mentioned as the final cause of death... but it isn't really.

Fri, 06/15/2012 - 13:17 | 2529815 TaxSlave
TaxSlave's picture

And when debt-based fiat crashes (because it's not my debt and I ain't gonna pay it (cause I couldn't even if I wanted to)), then presto-chango, we go instantly to pure printing and helicopters and wage/price controls.  Easy peasy.  See?

Fri, 06/15/2012 - 14:00 | 2530006 Pbn2Au
Pbn2Au's picture

Except it doesn't go 'presto'..."The mark was dead, one million-millionth of its former self. It had taken almost ten years to die." - from the above

It goes far to prove the revolutionary axiom that if you wish to destroy a nation you must corrupt its currency. Thus must sound money be the first bastion of a society's defence. - ditto

Our currency is being corrupted.  Our society is asleep at the wheel.  Curious to think how this will read in 100 years.

Fri, 06/15/2012 - 20:19 | 2531091 BigJim
BigJim's picture

If I were Iran... I'd be counterfeiting perfectly-cloned USD like there's no tomorrow (and buying gold and other hard assets with it, obviously). Weaken the dollar and get shit for free.

Imagine a computer virus that could penetrate the banking system and SWIFT and send billions of USD to millions of random recipients all over the globe. I find it hard to believe that many of the original software engineers of those systems haven't since been reading ZH, gotten some religion, and aren't seriously contemplating blowing up the system they helped create.

Fri, 06/15/2012 - 23:25 | 2531334 AustriAnnie
AustriAnnie's picture

"Inflation vs. deflation is a meaningless conversation."

It isn't the inflation/deflation that scares me.  Its the 30,000 drones buzzing over my head and the forced "relocation" plans that follow.  

What good is preparation when you wake up one morning and find that the ground you buried your gold in no longer belongs to you, nor does the gov't recognize your right to live on it?

If its just me vs. nature, or me vs. civil breakdown, no big deal.  But me vs. a militarized police state?  Yeah, not so prepared for that.....

Sat, 06/16/2012 - 17:58 | 2532719 Iconoclast
Iconoclast's picture

Nice summation man..

Fri, 06/15/2012 - 13:11 | 2529789 Totentänzerlied
Totentänzerlied's picture

Prelude to which act? I do hope it's act III, awfully tired of this play.

Fri, 06/15/2012 - 13:31 | 2529876 trilliontroll
trilliontroll's picture

"The inflation is going to come later"

How ?

Fri, 06/15/2012 - 13:14 | 2529804 TaxSlave
TaxSlave's picture

"All the reserves at banks have to be loaned out to get inflation in the US."

That is just not true.


Don't forget we have a spender of last resort.  When everyone goes on ration cards, it will indeed take unlimited quantities of digits to buy a bowl of gruel.   And everyone will end up on ration cards eventually, capable of holding 256-bit wide numbers. Price controls will make food and fuel (and cash and silver) into contraband.  As always.  Wheelbarrows are so old-school.

Fri, 06/15/2012 - 13:31 | 2529887 Kprime
Kprime's picture

Last year I bought a canister of coffee for $6.50.  This was a regular price.  Today I paid $10.00 for the same coffee. 

Thank God there is no inflation.

Fri, 06/15/2012 - 13:49 | 2529966 Dr. Richard Head
Dr. Richard Head's picture

Bernanke said it will well within the targeted 2-3%, so you must be a liar.

Fri, 06/15/2012 - 14:16 | 2530089 Calmyourself
Calmyourself's picture

Animal feed up $3 per 50# in 4 months...  No inflation, ha

Fri, 06/15/2012 - 14:33 | 2530185 akak
akak's picture

Soon to be known, after BLS "hedonic adjustment", as Granny feed.

Fri, 06/15/2012 - 17:06 | 2530762 upWising
upWising's picture

You are unclear on the concept.


Now just because almost everything costs more, that is beside the point.  

(Price of KoolAid has been quite stable and, obviously, KoolAid consumption is steady or rising.)


Fri, 06/15/2012 - 17:05 | 2530758 devo
devo's picture

It's the evil coffee speculators.

Fri, 06/15/2012 - 23:33 | 2531347 AustriAnnie
AustriAnnie's picture

And the newest fad, "fair trade" coffee, in which a bunch of yuppies pay above-market prices to buy coffee, so that local farmers in other countries switch production to coffee, instead of growing food to feed their local populations, thus starving the local people who were already barely sutaining themselves, so that Mr. and Mrs. Yuppie can walk into their "quaint little coffee shop" with their kid in their $3,000 designer stroller, and feel good about themselves for "helping those in need".

Also, there is inflation.

Fri, 06/15/2012 - 19:46 | 2531044 HungrySeagull
HungrySeagull's picture

7.20 to 9.00 last year and now 14.30

My next purchase is going to be 12 tubs of coffee for the remainder of this year and the next.

Sat, 06/16/2012 - 04:20 | 2531569 cranky-old-geezer
cranky-old-geezer's picture



You forget $150 billion added to the circulating money supply each month from federal government borrowing.

This is why banks aren't lending into the private sector.   The federal government is doing all the borrowing now. 

It doesn't matter what money supply numbers the Fed reports.  We know they're lies.  We know the circulating money supply is expanding by $150 billion a month just from federal government borrowing.  It might be $200 billion a month before long.

We know QE is continuing right along, whether the Fed admits it or not.  That $150 billion a month has to come from somewhere, and it's being created out of thin air, because other nations have stopped buying our treasury debt.

And yes, the banking system has decided to sacrifice the housing market so the federal government can borrow $150 billion a month and still keep inflation to a reasonable level. 

This is why the housing market has no future.  Banks have simply stopped lending for housing, so all the lending can be to the federal government.

In fact they've decided to sacrifice the entire economy.  No more lending into the economy at all, so the federal government can get it all.

But $150 billion a month added to the circulating money supply IS inflation, any way you look at it.  It's just slow creeping inflation, not hyperinflation.

Hyperinflation will come when the rest of the world dumps the US dollar.

Fri, 06/15/2012 - 12:49 | 2529708 nwskii
nwskii's picture


When do we get started!!!

Fri, 06/15/2012 - 12:56 | 2529741 ihedgemyhedges
ihedgemyhedges's picture

As soon as your avatar shows up at my house.  I'll make the sure the wife is gone................

Fri, 06/15/2012 - 12:49 | 2529709 CURWAR2012
CURWAR2012's picture

The US will have its moment in the hyperinflationary sun, most regretably so

Fri, 06/15/2012 - 13:12 | 2529794 UP Forester
UP Forester's picture

"It's better to burn ooouuttt, then to fade awaaayyyy....."

Fri, 06/15/2012 - 13:15 | 2529806 WhyDoesItHurtWh...
WhyDoesItHurtWhen iPee's picture

oh no, after the gold rush.

Fri, 06/15/2012 - 13:31 | 2529885 Global Hunter
Global Hunter's picture

its only castles burning

Fri, 06/15/2012 - 12:53 | 2529715 BLOTTO
BLOTTO's picture

The monetary system eventually attacks every country.


ALL nations have been inflitrated...


Fri, 06/15/2012 - 12:54 | 2529717 DutchR
DutchR's picture

How does that work, they give you a marker to add the zeros yourself?

Fri, 06/15/2012 - 17:15 | 2530785 upWising
upWising's picture

No, you will not be allowed to add your own zeros.  that could lead to chaos!!!

There will be a ZERO ASSURANCE PROGRAM (ZAP) administered by the CYPHER SECURITY ADMINISTRATION (CSA). Zeros will be ZAPped into existence and announced, just like the Lottery numbers are, on the TeeVee news.

When the Gumbint starts running out of zeros (kind of like when a school teacher starts running out of points), the zeros will be de-ZAPped and returned to the warehouses in a procedure called "currency reform" wherein 10 squidzillion "old dollars" will be worth ONE "new dollar."  Then we start again.

When you use public transportation or shop, you will be searched by Green-uniformed CSA Agents who will check for turrurrists who are carrying unauthorized zeros.  

Everything is under control.

Fri, 06/15/2012 - 12:55 | 2529725 Kamehameha
Kamehameha's picture

Look for the double sucker punch when they roll out the new currency and then hyperinflate that also to suck out any remaining wealth from the meat muffins.  The middle ages will look like the Garden of Eden in a few short years.

Fri, 06/15/2012 - 12:54 | 2529728 TheCanadianAustrian
TheCanadianAustrian's picture

It's not the rate of hyperinflation that makes it historically significant, but the scope. Once it gets to the point that nobody wants to hold the currency, it hardly matters anymore what the figure is. 30,000% monthly inflation in a republic of 60 million will be much more devastating than 13 quadrillion percent inflation in a country of 9 million.

Fri, 06/15/2012 - 12:54 | 2529729 RobotTrader
RobotTrader's picture

With the CRB Index in a full fledged collapse, sending John "Big Mac" Williams back to the hospital with heart pains......

Bernanke would have to print at least a quadrillion dollars in order to get inflation back up over 8% like we had in the 1970's.

Of course, the more he prints, the bigger the rally in Treasuries due to "Greece Fears", therefore borrowing cost would be near zero.

Fri, 06/15/2012 - 13:10 | 2529778 Spitzer
Spitzer's picture

Inflation is the expansion of the money supply, not rising prices.

The inflation already happened. It is all sitting in the bond bubble. When you buy your last few treasuries , just like you top ticked Netflicks, the bubble bursts and the money that is already in existence needs to find a home, that is when you get the rising prices.

And too bad Hungary didn't have Bernanke in control back then... Because we all know he can stop hyperinflation in 15 minutes.

Fri, 06/15/2012 - 13:11 | 2529787 malikai
malikai's picture

I'm with Spitzer. Just let us know when you go all-in on Tbills, Robo.

Fri, 06/15/2012 - 13:18 | 2529825 Stimulati
Stimulati's picture

If inflation is the expansion of the money supply then we need a new metric that tracks rising prices because that metric woud be pretty important.  Treasuries will be in vogue until the economy recovers and we have growth.  At which point we'll be able to raise rates and contract the money supply to keep inflation at bay.

Fri, 06/15/2012 - 13:25 | 2529856 Spitzer
Spitzer's picture

Treasuries will be in vogue until the economy recovers

How well is that working for Europe ? Why isn't European debt in vogue until the economy recovers ?

At which point we'll be able to raise rates and contract the money supply to keep inflation at bay.

 They raised rates in 2004. How well did that work ? Funny how people say that gold will crash when Bernanke raises rates by 1%. He raised them in 2004 to 2006 and gold went up the fastest in those years.

Fri, 06/15/2012 - 13:46 | 2529956 Stimulati
Stimulati's picture

Europe has a currency problem, that is completely different from the U.S. situation.  Treasuries are in vogue for the same reason British debt is in vogue.

Also, consumer inflation was not a problem in the mid-2000s so I'm not sure how your 2nd point is relevant except for a failed attempt to tie in housing asset bubbles to consumer inflation.

Fri, 06/15/2012 - 14:22 | 2530110 Spitzer
Spitzer's picture

Europe has a currency problem, that is completely different from the U.S. situation. 

?? The Euro is worth more then the USD. Benchmark rates are higher in the EU.The Eurozone is a net creditor with no trade deficit. They can afford to let rates rise. Its not pretty but they are doing it.


Treasuries are in vogue for the same reason British debt is in vogue.

Yeah. Its called a bubble. Treasuries are return free risk.

Also, consumer inflation was not a problem in the mid-2000s so I'm not sure how your 2nd point is relevant except for a failed attempt to tie in housing asset bubbles to consumer inflation.

(inflation is an expansion of the money supply) Inflation is not a rise in consumer prices in the USA. The inflation that was in the housing bubble is now in the bond bubble. US and UK and Japan.

You were the one that said rates need to rise "when the economy recovers".  Not me. That is what they tried in 2004-06


Fri, 06/15/2012 - 18:16 | 2530904 Ricky Bobby
Ricky Bobby's picture

The word "Hyperinflation" must be one of trip wires for the DTD - Department of Troll Deployment. 

Fri, 06/15/2012 - 13:28 | 2529866 riphowardkatz
riphowardkatz's picture

they have metrics that track rising prices its called a price index. 


yes at that point when the government has a bagillion in debt they will just be able to raise the rates right up and everything will be great. Get real. Every thinking person knows if the 10 year goes above 4-5 the US gov is in a world of hurt. 

Fri, 06/15/2012 - 13:48 | 2529964 Stimulati
Stimulati's picture

That's interesting, because most price indexes I'm aware of are also called inflation indexes.  Somebody better tell our friend above with his alternative definitions of inflation.

Fri, 06/15/2012 - 19:48 | 2531047 HungrySeagull
HungrySeagull's picture

If they jack interest upwards, they are gonna bite the big COLA.

Fri, 06/15/2012 - 23:45 | 2531363 AustriAnnie
AustriAnnie's picture

"That's interesting, because most price indexes I'm aware of are also called inflation indexes. "

No shit.  Because a complete failure to understand money, credit, and markets is what got us into this mess.

Fri, 06/15/2012 - 13:28 | 2529869 Bam_Man
Bam_Man's picture

Well said, Client 9.

Fri, 06/15/2012 - 13:50 | 2529970 centerline
centerline's picture

Precisely.  I have been saying this for years now.  Add in the shadow banking market and the necessary explosives to nuke the financial landscape has already been created.  With orders of magnitude to spare.


Fri, 06/15/2012 - 14:03 | 2529939 akak
akak's picture


Bernanke would have to print at least a quadrillion dollars in order to get inflation back up over 8% like we had in the 1970's.

More denial of reality from RobotLoser.

Hey dipshit coward asswipe cockmunch, "inflation" (annual overall price increases) is ALREADY at or near 8% --- and you would know that if you were out buying ANYTHING other than Netflix, Lululemon or discount skank pussy.

Fri, 06/15/2012 - 12:56 | 2529737 kridkrid
kridkrid's picture

When Money Dies: - load this into your tablet and read at your leisure.  lots of anecdotal stories about life in a hyperinflationary period.

Fri, 06/15/2012 - 14:12 | 2530062 tamboo
tamboo's picture


from page 145:


"They woke up very late. They started selling their valuables because they couldn't buy food —
the china from the mantelpiece, the furniture, the silver. That made them think — it made them
think when the price of a set of old silver spoons went up from 20,000 to 40,000 crowns in a
matter of a week or two. And if you had to sell a valuable writing desk for money which was
worth only half as much a week later, of course there was ill-feeling.

It was resented when Jews bought these things. The Jewish women would turn up at parties or at
the dansants when we were all broke, wearing the silver fox furs — three at a time for
ostentation -- and diamonds which they had bought from our relations for a song — or what,
when they saw them again, had become a song. My relations didn't know the value of anything.
They were stupid. Our solicitors were no better. My mother's bank manager gave her appalling
advice — he didn't know what he was talking about either.


Anti-Semitism had been negligible before inflation. Although Bela Kun's revolution had been
mainly run by Jews, the White Terror had largely purged political resentment. The Jews had
been badly treated in Hungary since the 1860s, and were not received socially for many years.
Nine out of ten bore grudges, and when the opportunity of impressing the arrogant gentiles
arrived at last, who was to blame them for taking it? When they made a success of inflation, they
were hated. When they were ostentatious about it, they were hated even more. "

Fri, 06/15/2012 - 12:58 | 2529745 Lucky Guesst
Lucky Guesst's picture

I don't care anymore... bring it on! I'm a little smarter and a little more prepared than the average sheep. I might even be a little crazier lol Lets do this!!!

Fri, 06/15/2012 - 12:59 | 2529746 lolmao500
lolmao500's picture

Almost 13 quadrillion % of inflation... no biggie... the derivative market is at around a quadrillion right now... give it a few more years and lots of money printing from Ben and we can easily go over that minuscule 13 quadrillion % inflation when it all collapses! USA NUMBER ONE!

Fri, 06/15/2012 - 13:05 | 2529754 Element
Element's picture


Some excellent points being made, and also questions being asked by Iran’s top negotiator, Saeed Jalili, as war with the US draws noticeably closer.  It has something of an air of Iran stating it's final case and position, for the history books, before the conflict finally gets rolling ... if a diplomacy fails in Moscow.

The Question is, what will Russia do, as China announced today that it is not going to, "take sides with any party in Syria", and is basically looking to the P5 (+2?) meeting in Moscow to solve this just short of war (and hoping like hell it works ... as the US, Japan and ROK Navys are having a major 'drill' near China's eastern waters all this week.)


‘We’re strongly against weapons of mass destruction’ – Iran’s nuclear negotiator

Published: 15 June, 2012, 11:21


There are just days left to defuse this now, and this is certainly the positioning prior to negociation, but it appears the US has (i.e. definitely has) already decided to invade Syria, prior to commencing a full blooded attack on Iran.

Fri, 06/15/2012 - 13:02 | 2529755 Belarusian Bull
Belarusian Bull's picture

Yay,  we got mentioned! oh, wait...

Fri, 06/15/2012 - 13:03 | 2529758 Big Beta Bill
Big Beta Bill's picture

Chile is not on this list but they dealt with hyper inflation in the 1970's and reformed their economy.  Now they have really low debt to GDP.  Healthy trade, healthy interest rate environment and high standard of living.  Growing middle class.  Do you zh sky is falling precious metal loving rally chasing doubters think there is only one result of price discovery?  The market in Europe is working.  It is solving problems.  Thats what it does.  The precious metals trade will end in tears.

Fri, 06/15/2012 - 13:08 | 2529777 JohnG
JohnG's picture

Ummmmm, no.

Fri, 06/15/2012 - 13:26 | 2529860 aerojet
aerojet's picture

I hate to tell you this, but buying gold and silver was too obvious.  The slimeballs are going to pick your bones clean at a time of their choosing.

Fri, 06/15/2012 - 13:46 | 2529952 akak
akak's picture

I can hold onto my gold and silver longer than our corrupt and irrational government can remain insolvent (and functioning).

Fri, 06/15/2012 - 14:16 | 2530084 prole
prole's picture

Yeah take that John Maynard Dickhead!

BTW Sheople, Big Beta Bill is right on this one. The "precious metals trade" has been golden for four thousand years it's true, but this time it's different and you will all weep bitter tears. Yes it is true that gold has outlasted a thousand corrupt governments and fiat currency ponzi schemes, but this time is different, and the sound money policies of Mr. Bernanke will save us all. Trust in government!

Fri, 06/15/2012 - 19:50 | 2531054 HungrySeagull
HungrySeagull's picture

COG is one thing you forgot Dear Akak.

I stack therefore I am.

Fri, 06/15/2012 - 20:08 | 2531077 akak
akak's picture

"COG" = ?

Fri, 06/15/2012 - 20:35 | 2531114 Think for yourself
Think for yourself's picture

Continuity of Government. Plans by the parasite to survive against all conceivable odds, including of course the host waking up and trying to shake it off.

Fri, 06/15/2012 - 13:54 | 2529981 walküre
walküre's picture

The slimeballs are stashing themselves. What else is there to buy with all that free cash they've been getting for the last years.

Fri, 06/15/2012 - 14:00 | 2530004 FeralSerf
FeralSerf's picture

Except for politicians, real productive infrastructure and land is about the only other thing to buy if you can really own it.

Fri, 06/15/2012 - 14:16 | 2530088 Harbanger
Harbanger's picture

Yep.  And the reason it needs to be "productive" is because they will tax you while you own it, not just when you decide to sell it.

Fri, 06/15/2012 - 13:15 | 2529796 junkyardjack
junkyardjack's picture

A lot of the commenters on the site appear to be hoping for a complete system collapse and some sort of Mad Max end game for the developed nations.  As soon as you mention the word trade you can expect to get dumped because Gold isn't a trade its the only way of life apparently. I'll keep trading for "fiat", the system has been around for a while and will continue.   What's funny is that if you read any old books on trading you hear the exact same arguments being made and the system continued.  In the 80s people were talking about the end of the markets because of programmed trading as well and yet we had the 90s bull market.  I still like the site for the more radical end of the spectrum views but you have to balance it with other news as well obviously or you'll miss a lot

Fri, 06/15/2012 - 13:29 | 2529878 SgtShaftoe
SgtShaftoe's picture

Something wicked this way comes... There's just no getting around it.  Just read Reinhart and Rogoff's "This time is different".  The question remains, exactly what?  Hyperinflation, Collapse, or can they fly through the eye of the needle with financial repression?  I don't know.  Based on historical data from the above book, every time a country gets to the point that the US, and most of Europe are in, it ends in default, devaluation, or hyperinflation. 


"Choose the Destructor!"

Fri, 06/15/2012 - 13:36 | 2529911 CommunityStandard
CommunityStandard's picture

I was just about to suggest Reinhart & Rogoff.  +1

While I do agree that the commenters glorify the Mad Max dystopia which probably won't happen, life did suck a lot during the periods of default / hyperinflation.  Whole decades are discussed in a few short paragraphs in the book, and it's easy to forget that we'll have to live through it too.

Fri, 06/15/2012 - 13:36 | 2529912 aerojet
aerojet's picture

You don't understand--collapse psychosis is an excuse to not get on with your miserable life.  It's easier to avoid doing things because you believe it's the end of the world, so why bother?  It's a common problem among Boomers who can't stand not being the center of the universe, and they have all long since ceased to be the center of any cultural movement.  Instead of dealing with problems rationally, these folks desire for it all to end, that way, they aren't alone in their suffering--misery loves company. 

I guess I have had the same collapse psychosis starting around August 2007. 2008 was bad--we almost lost the money markets.  But what I've realized is that living your life waiting for doomsday is really fucking stupid.

Sat, 06/16/2012 - 00:17 | 2531400 AustriAnnie
AustriAnnie's picture

To the contrary. Realization that the current state of affairs is unsustainable has been the greatest contributor to my quality of life. Its a relief to know that systems eventually fail when they have reached the peak of stupidity and excess.  And I really could care less if it happens now or in 30 years.  Or maybe later, in which case I'll leave my gold and silver to my children and make sure they are aware of the dangers.  I'm not a market timer.  I don't wait in my basement stroking my silver bars holding my breath for the big BOOM.  

Instead, I realize that irrationality can last longer than anyone would ever expect.  I am in no rush but I have taken a longer-term view.  I've re-aligned my priorities and my life has been enriched by the "preppers" mentality.  Cable TV? Cancelled.  Do I miss it?  Hell, no.  Money spent going out with people who were never my friends in teh first place?  Nope.  I have become more aware of real relationships and enjoyed real moments with people who matter to me.

I know that the collapse, fourth turning, end of the exponential growth trend, whatever you want to call it, will end.  I simply don't need it to happen today so I can gloat "see I told you so" to those who have called me insane while they channel surfed between American Idol and Jersey Shore.  I don't need it.  I don't need that satisfaction.  In fact I pray it won't happen.  I pray for a return to sanity and real growth in the human standard of living.  But I sure as hell don't count on it.

I think that since people take a half hour out of their otherwise full iives to comment on ZH and voice their concerns, its easy to think that the anger/frustration/fear that we all exhibit at one time or another on these forums actually rules our lives.  It doesn't.  

For those who do spend too much time worrying about collapse, I think it may just be that they haven't reached the point on the learning curve where they realize fear gets them nothing.  I was once there.  Now i'm not.  Don't judge people for being in a certain phase of "awakening" where they feel constant panic and worry.  Its, IMHO, a natural phase to go through. 

Fri, 06/15/2012 - 13:19 | 2529830 CommunityStandard
CommunityStandard's picture

M$B except less funny.

Fri, 06/15/2012 - 13:06 | 2529770 q99x2
q99x2's picture

Wonder what the political fallout / social unrest ratio is. I think 10% from here will roust the hungry zombies into action.

Fri, 06/15/2012 - 13:06 | 2529771 SgtShaftoe
SgtShaftoe's picture

Anyone know of any good books that discuss All incidents of hyperinflation over the last couple centuries? 


I've got copies of "When money Dies", "Dying of money", "This time is different", Niall Ferguson's books, but none really goes into deeply the causes and process that initiated hyperinflation.  Germany in the 20s was pressured by extenuating circumstances and stupidity, potentially making it a bad comparison.  I'd like to learn more about various other scenarios in order to build a statistical base rate.  Reinhart / Rogoff's "This time is different" is probably the closest empirical work to what I'd like to see, but it doesn't quite hit it.  Most of the texts about Argentina and others are full of subjective analysis, though interesting, a more unbiased approach would be more helpful.

Fri, 06/15/2012 - 13:34 | 2529902 Harbanger
Harbanger's picture

Haha. You beat me to it. Thanks John.

Fri, 06/15/2012 - 19:14 | 2531002 Diogenes
Diogenes's picture

There was a book published about 1980 called What's Behind Inflation And How To Stop It. The author discussed 16 cases of severe inflation ending with Brazil. He did this research because he was one of the experts involved in stabilizing the Brazilian economy and ending inflation in that country, which they did. At least for a while.

Sorry I don't remember the author's name. It might be a valuable addition to your research because it describes how to cure inflation, by someone who actually did it.

Sat, 06/16/2012 - 00:41 | 2531419 AustriAnnie
AustriAnnie's picture



I like the fact that they instituted sever criminal penalties for bankers funding politicians and other cronies.  We can start with that.  

The problem is that according to the above, Brazil only succeeded becasue the Treasury and Central bank actually went against the political power machine.  Good luck getting that to happen again.

"Gustavo Franco said frankly that “We empowered the treasury and the Central Bank to subvert democracy.” People and their political representatives had voted to give themselves things they could not afford. The finance ministry, treasury, and Central Bank, using a constitutional amendment passed in 1994, simply did not implement the budget. “We changed the composition of the CMN, the monetary authority, to be three members, the Central Bank minister, the finance minister, and the planning minister. This closed of the off-budget spending, while the treasury cut back on implementing the congressionial budget.” While congress had passed a budget that authorized, say, $800 million reals for a project, the treasury chose to actually expend only $200 million."

They also broke the special interest lobbying link (good luck getting them to do that again, that is where their bread is buttered)

" “The key,” he concluded, “was to create an impersonal mechanism, not to get into negotiations with parties and unions--or housewives associations. You need market mechanisms. Dialogue doesn't work in this kind of situation.” The assumption here was that each constituency, if consulted, would fight for its particular entitlement, driving the state budget back up and keeping the price spiral virulent. Even business was not offered a chance to insert their favorite demands into the solution. “No industry associations were involved in tariff discussions. They wanted high tariffs, but we lowered them to invite competition and discourage price raising.”"

Fri, 06/15/2012 - 13:07 | 2529774 lolmao500
lolmao500's picture

- HRW: Syrian forces use sexual violence against men, women, children (Reuters)

- NATO Chief Sees Parallels Between Syria and Balkans

- Russia Reportedly Preparing 2 Divisions, Spetsnaz Brigade for Deployment to Syria

- Russia installed a radar on the Turkey-Syria border to monitor rebels in the country and monitor NATO forces in Turkey


Fri, 06/15/2012 - 19:53 | 2531059 HungrySeagull
HungrySeagull's picture

Spetznaz will be a hardass force to reckon with.

If the Soviets take two divisions into Syria, they might as well Airdrop a Corps with armor somewhere important to draw us off and bleed us dry.

What if we decided that Syria did not matter and did not show up at that little sor'iee?

Fri, 06/15/2012 - 13:09 | 2529781 BluePill
BluePill's picture

When will this scenario happen in INDIA, well these fucking parasites have been   destroying the world since very long time



Fri, 06/15/2012 - 13:52 | 2529975 kekekekekekeke
kekekekekekeke's picture

'sup Pakistani dude?  maybe Chinese?

Fri, 06/15/2012 - 13:11 | 2529788 SDRII
SDRII's picture
GSDF ranger unit marches through central Tokyo Kyodo

Ground Self-Defense Force personnel in camouflage marched through Tokyo's Itabashi and Nerima wards Tuesday as part of their training as rangers.


Move out: The GSDF rangers march across the tracks after the train passes. KYODO

It was the first time in 42 years that rifle-toting GSDF troops have marched through urban areas of Tokyo, with the last such occasion taking place in 1970, according to the GSDF. They were not, however, carrying live ammunition, officers said.

The training was for a unit in charge of Tokyo's 23 wards. More than a dozen personnel walked about 6.8 km from the banks of the Arakawa River in Itabashi to the GSDF garrison in Nerima.

"It is necessary that the troops get acquainted with the urban environment, partly in order for them to prepare for disaster missions," a GSDF officer said.

Some within the GSDF have criticized the move, questioning whether guns would be necessary at the scene of a disaster.

Some residents filed a petition with the Tokyo District Court seeking a temporary injunction to halt the training exercise, which the court rejected Monday.

The rangers are guerrilla warfare troops who have received special training for missions such as reconnaissance and ambushes. They are capable of carrying out duties in an extremely hostile environment, according to the GSDF.

Fri, 06/15/2012 - 19:54 | 2531062 HungrySeagull
HungrySeagull's picture

Those who criticize guns in a Military Force are the first lost in any real shit.

I myself don't even want to BE in a disaster area... see Katrina's actions for your lesson of the day.

"Go west young man, take your gun and family with you."

Fri, 06/15/2012 - 13:11 | 2529793 mvsjcl
mvsjcl's picture

It's all goofy paper based on trust. Once that trust is gone, hello gold. Obviously, don't want that to happen. Weird world we live.

Fri, 06/15/2012 - 13:12 | 2529795 yogibear
yogibear's picture

There is an empty place for the US. Bernanke knows he will cause it down the road when he creates the loss of confidence in the US to pay it's debts. Bernanke is the enabler.

Fri, 06/15/2012 - 13:13 | 2529797 Stimulati
Stimulati's picture

There will be no excess inflation in the US without means of getting all that printed money into the hands of people who actually, you know, purchase things at higher prices.  All we have is money sitting in bank vaults making the bankers feel very good about their role in Washington politics.

Fri, 06/15/2012 - 13:23 | 2529847 riphowardkatz
riphowardkatz's picture

you are purchasing things at higher prices numbskull

Fri, 06/15/2012 - 13:25 | 2529855 Stimulati
Stimulati's picture

The 2% - 3% inflation we have right now is not excess inflation

Fri, 06/15/2012 - 13:30 | 2529880 riphowardkatz
riphowardkatz's picture

Why? Because the Bernanke said so.

Tell it to the person who is trying to retire.

You have the ability to think about 1 month forward that much you have made obvious.

Fri, 06/15/2012 - 13:35 | 2529910 Stimulati
Stimulati's picture

No, because history tells us so

Fri, 06/15/2012 - 13:45 | 2529949 riphowardkatz
riphowardkatz's picture

A solid 100 years of hard proof in a system that can have 100 year lag times between cause and effect. Genius. You have  very bad case of shortermism. 


Fri, 06/15/2012 - 13:51 | 2529973 akak
akak's picture

Stimulati, if you actually believe that "inflation" (the rate of annual overall price inceases) in the USA is only 2 or 3%, then you are even more of a fool, or more of a liar, than I already recognized you to be.  It it most curious how EVERY post by you implicitly if not explicitly supports the egregiously malicious and fallacious pro-status-quo propaganda of Bernanke, Krugman, and all the rest of the sociopaths currently in control.

Fri, 06/15/2012 - 14:05 | 2530022 Stimulati
Stimulati's picture

I don't think you understand me akak.  Or Krugman if you think his policies are in any way being implemented.  I do support most of what Krugman says but that is a far cry from the Milton Friedmanesque policies being implemented today by Bernanke and company.  Bernanke should stop printing money and giving it to the banks - but it's not going to cause consumer inflation (asset inflation, yes).

And btw, 2% - 3% inflation seems about right where I live and work. 

Fri, 06/15/2012 - 14:36 | 2530206 akak
akak's picture

On the contrary, I think I understand you all too well.

Fri, 06/15/2012 - 15:36 | 2530456 Stimulati
Stimulati's picture

Well its not coming out based on what you write

Fri, 06/15/2012 - 18:36 | 2530836 akak
akak's picture

As I previously stated, based on your laughably insulting and/or disingenuous prior posts here, you are either a shill for the Establishment, a fool, a liar, or some combination of the three --- you tell us which.

Fri, 06/15/2012 - 13:39 | 2529918 aerojet
aerojet's picture

It's not in bank vaults--it's just big decimals inside of computer server hard disks and SANs.  If only they had to print actual paper they might see the monster, but it is completely hidden from view.

Fri, 06/15/2012 - 13:13 | 2529798 RobotTrader
RobotTrader's picture

Why not just print "whatever is needed"?


Heh, so far, all the printing so far has been deflationary.

They need to really start cranking up the POMO's, LTROS, and form at least 25 more Maiden Lanes and start buying whatever it takes.

Paul Krugman at his finest.

Fri, 06/15/2012 - 13:22 | 2529841 Stimulati
Stimulati's picture

The printing hasn't been deflationary, the economy has been deflationary.  The printing is generating asset inflation (not to be confused with consumer price inflation) because the money isn't going to the middle class, it is going to the banks.

Fri, 06/15/2012 - 13:24 | 2529849 riphowardkatz
riphowardkatz's picture

consumer prices are inflating, open your eyes. A sale at Mervyns does not mean deflation.

Fri, 06/15/2012 - 13:31 | 2529888 riphowardkatz
riphowardkatz's picture

read almost any producers quarterly or yearly report and you will see shrinking margins because of 10-15% increases in input costs.

Take the blinders off. 

Fri, 06/15/2012 - 13:34 | 2529900 Stimulati
Stimulati's picture

Yes, that's why we have been having record corporate profits recently. 

Some commodities are higher, that is true.  That also doesn't necessarily translate into higher across-the-board consumer inflation.

Fri, 06/15/2012 - 13:42 | 2529933 riphowardkatz
riphowardkatz's picture

Record earnings are a result of firing a bunch of people in 2008-2011.  

There are higher prices you have already admitted that by saying the CPI is at 2-3% 

Just ignore all this anyway. Everything is OK. Bernanke knows how to make decisions that are to the benefit of 7 billion people. He is in complete control and errors are not part of his genetic makeup. 

Keep being positive and it will all be good. 


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