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Hyperinflation Still More Than A Monetary Phenomenon
Pragmatic Capitalism ^ | 8-17-2012 | Cullen Roche

Posted on 08/18/2012 1:45:55 PM PDT by blam

Hyperinflation – Still More Than A Monetary Phenomenon

08/17/2012 1:15 PM
Cullen Roche

One of the bigger myths in the world of economics and finance remains the cause of hyperinflation. As I’ve highlighted many times over the years, hyperinflation is more than just a monetary phenomenon (and misunderstanding this led to many incorrect hyperinflation predictions in the USA in recent years).

In fact, the monetary explosion is almost always the result of some other rare or extreme exogenous factor. My original conclusions on this found that hyperinflations tended to occur around the follow events:

* Collapse in production.
* Rampant government corruption.
* Loss of a war.
* Regime change or regime collapse.
* Ceding of monetary sovereignty generally via a pegged currency or foreign denominated debt.

These events usually lead to a collapse in the tax system or expansion in deficits that appear like the cause of the hyperinflation when the reality is that the debt increase is always the result of some rare or extreme exogenous event. And let’s be clear – when we say “rare” we mean really rare.
As in wars that destroy countries, regime changes that shift entire countries, corruption that destroys an economy, ceding of monetary sovereignty in the use of a currency peg or foreign debts, or a collapse in production.

Anyhow, it was kind of nice to see a paper by the Cato Institute noting that hyperinflations tend to “arise under extreme conditions” as opposed to the usual “money printing” conclusion:

“Hyperinflation is an economic malady that arises under extreme conditions: war, political mismanagement, and the transition from a command to market-based economy – to name a few. In each of these circumstances, there are barriers to the recording and publication of reliable inflation statistics. As we discovered over the course of our investigation, overcoming these barriers was an arduous and painstaking process. In light of this, it is little wonder that no one has been able to fully and accurately document every case of hyperinflation.”

It’s nice to see that some people are beginning to connect the dots and make earnest attempts to understand why hyperinflation didn’t happen in the USA. Of course, if you don’t understand the basic operational realities of the monetary system then you likely can’t even begin to piece together the dynamics behind the recent lack of hyperinflation in the USA so if you’re bored on a Friday you might want to peruse this document first.


TOPICS: News/Current Events
KEYWORDS: economy; hyperinflation; inflation; recessuin

1 posted on 08/18/2012 1:46:00 PM PDT by blam
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To: blam
Hi! Looks interesting.

Hyperinflation is a rare event.

2 posted on 08/18/2012 1:53:18 PM PDT by muawiyah
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To: blam
monetary explosion is almost always the result of some other rare or extreme exogenous factor.

Yeah...like Obambi following Winston Churchill's WWII playbook to make war on the American people:

1. Destroy means of production and distribution of electricity starting with coal mines and electricity grids.

2. Destroy means of exploration, production and distribution of petroleum products.

3. Destroy manufacturing capacity.

4. Terrorize the population (Fire bomb Dresden and flood the Ruhr valley)

3 posted on 08/18/2012 1:56:49 PM PDT by spokeshave (The only people better off today than 4 years ago are the Prisoners at Guantanamo.)
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To: blam

Inflation values that do not look at food or fuel are totally bull shit.


4 posted on 08/18/2012 2:37:22 PM PDT by hadaclueonce (you are paying 12% more for fuel because of Ethanol. Smile big Corn Lobby,)
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To: spokeshave

You wrote about Churchill’s “playbook to make war on the American people.”

Did you actually mean to write “the GERMAN people?” Please elaborate if not.


5 posted on 08/18/2012 2:46:25 PM PDT by Weirdad (Don't put up with ANY voter fraud...)
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To: muawiyah

Actually it’s fairly common, historically. Not that it’s a good thing, just sayin’.


6 posted on 08/18/2012 3:41:23 PM PDT by Freedom4US
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To: blam
hyperinflation is more than just a monetary phenomenon

B.S. "Inflation is always and everywhere a monetary phenomenon." —Milton Friedman.

Hyperinflation is always the result of printing the stuff by the wheelbarrow. Why a government would do that is an interesting question, but if the government does not print, there is no hyperinflation.

7 posted on 08/18/2012 5:26:31 PM PDT by AndyJackson
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To: Weirdad
It's a bit ambiguous, but reads like this:

Obama using A to make war on the American people.

Now replace A with "Churchill's playbook". It's Obama making war on the American people, not Churchill.

8 posted on 08/18/2012 9:47:22 PM PDT by slowhandluke (It's hard to be cynical enough in this age.)
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To: slowhandluke

That’s what I figured you were saying, and I did not want anyone in the future to think otherwise if they read this thread.

Thanks for the clarification!


9 posted on 08/19/2012 5:32:00 AM PDT by Weirdad (Don't put up with ANY voter fraud...)
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To: blam
Glen Beck - "Unstoppable Economic Collapse is Imminent"

Central Banks collapse in about three months . . . all planned by the elites for profiteering and a major rape, pillage and burn scenario.

10 posted on 08/19/2012 2:40:33 PM PDT by ex-Texan (The Time to "Wake Up" is Over !)
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To: ex-Texan

E-T,

What’s the date on that GB video?


11 posted on 08/19/2012 3:54:04 PM PDT by blam
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To: ex-Texan
Here's the original Business Insider article (Dated 6-1-2012) that Glenn reads from in the video:

Former Hedge Funder Presents A Terrifying Vision Of THE END GAME

On June 3, 2012, George Soros says that Europe has three months. Three months ends on September 3, 2012 and Soros just made a $130 million gold buy.

Hmmm....

12 posted on 08/19/2012 4:09:49 PM PDT by blam
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To: blam

Ahhhhh...the threats we face are EXOGENOUS.

Right.


13 posted on 08/20/2012 7:41:36 AM PDT by gaijin
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To: blam; TigerLikesRooster; Whenifhow; Cincinatus' Wife; familyop; 2ndreconmarine; M. Espinola; ...
This is more troubling to thinking people . . .

Major General: Major General: Why Are Domestic Government Agencies Purchashing Enough Lethal Ammunition to Put 5 Rounds In Every American?

Excerpt:

The Social Security Administration (SSA) confirms that it is purchasing 174 thousand rounds of hollow point bullets to be delivered to 41 locations in major cities across the U.S.

***

Those against whom the hollow point bullets are to be used — those causing the civil unrest — must be American citizens; since the SSA has never been used overseas to help foreign countries maintain control of their citizens.

What would be the target of these 174, 000 rounds of hollow point bullets? It can’t simply be to control demonstrators or rioters. Hollow point bullets are so lethal that the Geneva Convention does not allow their use on the battle field in time of war. Hollow point bullets don’t just stop or hurt people, they penetrate the body, spread out, fragment and cause maximum damage to the body’s organs. Death often follows. * * *

Methinks "something is rotten in Denmark" or the Oval Office and Congress . . .
14 posted on 08/20/2012 9:39:19 AM PDT by ex-Texan (The Time to "Wake Up" is Over !)
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