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Friday, March 13, 2015

Hyperinflation will not happen. It cannot when an economy disintegrates overnight. [video]

There is no need for Americans to worry about hyperinflation thanks to the FED and the wonderful financial fantasy system. There are much worse things on the horizon.

Hyperinflation occurs when a country experiences very high and usually accelerating rates of inflation, rapidly eroding the real value of the local currency, and causing the population to minimize their holdings of the local money. The population normally switch to holding relatively stable foreign currencies or precious metals. Under such conditions, the general price level within an economy increases rapidly as the official currency quickly loses real value.

Hyperinflations are usually caused by large persistent government deficits financed primarily by money creation (rather than taxation or borrowing). As such, hyperinflation is often associated with wars, their aftermath, sociopolitical upheavals, or other crises that make it difficult for the government to tax the population.

Governments will often try to disguise the true rate of inflation through a variety of techniques. None of these actions address the root causes of inflation and if discovered, they tend to further undermine trust in the currency, causing further increases in inflation. Price controls will generally result in shortages and hoarding and extremely high demand for the controlled goods, causing disruptions of supply chains. Products available to consumers may diminish or disappear as businesses no longer find it sufficiently profitable (or may be operating at a loss) to continue producing and/or distributing such goods at the legal prices, further exacerbating the shortages.

Read more about Hyperinflation will not happen. It cannot when an economy disintegrates overnight. [video]

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