I am not really disagreeing that they will print. While they may be smart enough to realize that it wouldn’t do any good, the pressure to “do something” will be enormous.
What I am saying is that the out-of-control price inflation seen in hyper-inflationary periods could not happen. The economy would simply collapse the moment that started. This is why we can’t print our way out of the sovereign debt problems, let alone all of the other (even bigger) problems.
jj, just because it won’t work, doesn’t mean they won’t do it...
once weimar got going it was easier to keep printing than to stop, and it’s the same in europe now. they keep increasing the ceiling on ELA for greece, because it’s easier than bailing them out again or pushing them out of the euro
also, you can have a major inflation due simply to velocity increases as a result of loss of confidence in the currency. It happened in france in the post weimar-period.
http://ftalphaville.ft.com/2012/02/17/886041/for-the-ecb-a-french-history-lesson/