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Thread: Hyperinflation

  1. #11
    Nerd King Usurper Array Edgar's Avatar
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    Quote Originally Posted by Lateralus View Post
    It wasn't the war that caused their inflation, it was how they paid for the war that caused it.
    You're telling that Germany being bombed to the ground by the Allies and looted by the Soviets didn't have any effect on their economy?

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    Senior Member Array Lateralus's Avatar
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    Quote Originally Posted by Edgar View Post
    You're telling that Germany being bombed to the ground by the Allies and looted by the Soviets didn't have any effect on their economy?
    It had an effect, but it didn't cause inflation.
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

  3. #13
    Nerd King Usurper Array Edgar's Avatar
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    Quote Originally Posted by Lateralus View Post
    It had an effect, but it didn't cause inflation.
    I disagree.

    What good is the money if there is nothing in a country left to back it.

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    Senior Member Array Lateralus's Avatar
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    Quote Originally Posted by ptgatsby View Post
    Given the amount of wealth that has been destroyed, it would seem the the probability of hyperinflation in the near future to be extremely low. I'd put deflation as about 5x more likely than inflation over 10% (never mind hyperinflation 100%) over the next 2-4 years.
    I agree that we won't see hyperinflation in the next couple of years. Right now the velocity of money is declining, which will negate the effect of the increased money supply, temporarily. It's the recovery coupled with the end of the dollar standard that has me worried. The Fed will have to drastically reduce the money supply once the velocity of money starts increasing, but I don't think they'll be able to keep up.
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

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    Senior Member Array Lateralus's Avatar
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    Quote Originally Posted by Edgar View Post
    I disagree.

    What good is the money if there is nothing in a country left to back it.
    Then explain how it did cause inflation.
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

  6. #16
    Nerd King Usurper Array Edgar's Avatar
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    Quote Originally Posted by Lateralus View Post
    Then explain how it did cause inflation.
    Example:

    One year ago, there was sufficient food, tools, and everyday items to go around. Today, due to the devastation caused by war, there is limited amount of food, tools, and everyday items to go around. However, the amount of money in circulation from a year ago roughly remained the same. Hence, the prices on the items are a lot higher than they were a year ago.

    Short version: Scarcity of supplies, but not of paper money.

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    Guerilla Urbanist Array Brendan's Avatar
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    Quote Originally Posted by Lateralus View Post
    That's one of the most extreme examples, but there are many others, like Germany's currency after WWII.
    You fail.
    Quote Originally Posted by Edgar View Post
    I disagree.

    What good is the money if there is nothing in a country left to back it.
    Well there's really nothing backing money anymore except for the government's ability to keep it stable and its acceptability as a medium of exchange.

    As for hyperinflation in the foreseeable future of the United States?

    Erm. No.
    Quote Originally Posted by Lateralus View Post
    velocity of money
    Please explain what you mean by "velocity of money."
    There is no such thing as separation from God.

  8. #18
    Senior Member Array Lateralus's Avatar
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    Quote Originally Posted by Edgar View Post
    Example:

    One year ago, there was sufficient food, tools, and everyday items to go around. Today, due to the devastation caused by war, there is limited amount of food, tools, and everyday items to go around. However, the amount of money in circulation from a year ago roughly remained the same. Hence, the prices on the items are a lot higher than they were a year ago.

    Short version: Scarcity of supplies, but not of paper money.
    I misspoke, I meant hyperinflation. And this would not cause hyperinflation. You have fewer goods, but you also have a reduced population and damaged infrastructure (limiting individuals' ability to perform economic transactions).

    For Brendan: The velocity of money is how quickly it circulates.
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

  9. #19
    Senior Member Array Lateralus's Avatar
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    Quote Originally Posted by Brendan View Post
    You fail.
    Elaborate.
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

  10. #20
    Nerd King Usurper Array Edgar's Avatar
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    Quote Originally Posted by Lateralus View Post
    I misspoke, I meant hyperinflation. And this would not cause hyperinflation. You have fewer goods, but you also have a reduced population and damaged infrastructure (limiting individuals' ability to perform economic transactions).
    You mean in a situation where it's cheaper to use banknotes instead of a toilet paper?

    That usually happens when people are under the impression that the government printing the money will soon be replaced, and the banknotes will no longer be a legal tender.

    Like Confederate money in 1865.

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