Hyperinflation: USA

Like the title says what do you guys think of this? I did some research the last weeks for inflation in general mostly for my country (germany) then I realized that the USA seem to be more thretened by it than us.

Your opinions?

Obama will save us.

America might be "more-at-risk" than Germany, I don't know, but it is probably a moot comparison anyways.

hyperinflation, in terms of what is seen in the third world and failing states is really not applicable to modern western society. essentially every economic check orbalance would need to fail simtaniously, which is unlikely.

like all western nations, the American central bank regulates inflation. in Canada we hold it at about 2 percent

Not gonna happen.

Hyperinflations only happens when a country is in the shitter.... And as much as I hate to admit it... The US isn't anywhere near the shitter.

Originally posted by §P0oONY
Hyperinflations only happens when a country is in the shitter.... And as much as I hate to admit it... The US isn't anywhere near the shitter.

I really dont think anyone knows how to balance the economic system. I'm not a very smart person, but even i know that throwing money at our economic problems and over taxing the middle the class isn't going to help. However, this seems to be what our Gomment has been doing for years and the only real consequence from all of this seems to only be the fact that my Reese Cups get smaller and more expensive. I suppose, if that's the worst thing that's going to happen, its not that big of an issue. It's definitely annoying, but not THAT concerning.

I think it's a smoke show and the people putting on the show don't know what's going on either.

Originally posted by inimalist
America might be "more-at-risk" than Germany, I don't know, but it is probably a moot comparison anyways.

hyperinflation, in terms of what is seen in the third world and failing states is really not applicable to modern western society. essentially every economic check orbalance would need to fail simtaniously, which is unlikely.

like all western nations, the American central bank regulates inflation. in Canada we hold it at about 2 percent

http://www.marketoracle.co.uk/Article4735.html

EDIT: Just a bit I found in english, the sites that brought up my thoughts about it were in german.

Originally posted by Parmaniac
Like the title says what do you guys think of this? I did some research the last weeks for inflation in general mostly for my country (germany) then I realized that the USA seem to be more thretened by it than us.

Your opinions?

I think the whole developed world is in for a nastys suprise, well those who are of the middle classes or below for sure.

The rich will be ok as usual, they can move to places like Switzerland and pay no taxes at all, which would mean some other folk will have to make up for that, guess who?🙂 Put up their rent on the houses and property they own, so guess who has to fork out even more?

The big question is whether this will result in a rebelion against the financial system or not. In France for sure, they don´t mess about. But other countries like Germany nothing will happen, the people will get squashed like grapes in a wine press.

Originally posted by Bicnarok
I think the whole developed world is in for a nastys suprise, well those who are of the middle classes or below for sure.

The rich will be ok as usual, they can move to places like Switzerland and pay no taxes at all, which would mean some other folk will have to make up for that, guess who?🙂 Put up their rent on the houses and property they own, so guess who has to fork out even more?

The big question is whether this will result in a rebelion against the financial system or not. In France for sure, they don´t mess about. But other countries like Germany nothing will happen, the people will get squashed like grapes in a wine press.

quite a good cartoony thread this🙂

Originally posted by Parmaniac
http://gulfnews.com/business/opinion/us-faces-inflation-or-default-1.622397

nothing in there about hyper-inflation at all.

Originally posted by Parmaniac
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what is this a measure of? not inflation... America has been ~4% for the past few months iirc

also, i can't be positive, but I dont believe any of those nations are currently experiencing hyper-inflation.

Originally posted by Parmaniac
http://www.marketoracle.co.uk/Article4735.html

EDIT: Just a bit I found in english, the sites that brought up my thoughts about it were in german.

like I said in my first post, it would cause a huge shock to society that itself would be destabalizing, before anything close to hyper-inflation could happen.

So, going by that link, you think the problems America faces today are as bad as after the revolutionary war? or comparable to Germany immediatly after WW1?

I have to say, things arent so good for America, maybe worse than the recessions of the 80s-90s, but this isn't the new depression.

That article goes to pains NOT to point out that any changes America makes to its inflation policy are under the control of the central American bank, and would certainly be in the neighbourhood of 1-2% change at most (most changes are in the 0.1% range, a 2% change in inflation would cause huge chamges in the economy). This was not the case in any of those situations that the author brings up. To ignore all the reasons why each situation is profoundly different from the crisis today.

If America gets to a point where it has hyper-inflation, like what was seen in Eastern Europe or African nations like Zimbabwe, you probably have little to worry about. You've been out of a job for months and can't afford the radically spiriling prices anyways.

have a gander at these:

http://www.cracked.com/article_18397_5-economic-collapses-more-ridiculous-than-this-one.html

not all are relevant, but it will at least show that economics are crazy, and anyone saying that there is a golden ticket solution (as the article does with having a currency based off of a gold standard) is not giving you the whole story.

Inflation is caused by increase in the money supply. Hyperinflation is caused by shorting currency.

are you sure?

wasn't the problem in Germany and Zimbabwe that the bank printed too much currency?

Originally posted by inimalist
are you sure?

wasn't the problem in Germany and Zimbabwe that the bank printed too much currency?

http://www.youtube.com/watch?v=afWqKcqntfs&feature=channel

So the way to get rid off the whole debt is a massive inflation or to "reset" the system.

http://www.youtube.com/watch?v=rXFF7ui2MSI
(Take a look at the upload date)

A reset is now more likely than an inflation.

The prob was/is that they just print more and more money cause the US dollar is the lead currency they don't have the situation like simbapwe. Other countries, for example china, are exporting to the US but the USA doesn't really have money with real value and therefore china bought US treasury secrurities to keep on exporting and let their economy grow. Now China reached a point where they realised that this isn't possible to go on forever and the US wanted china to "level up" their Yuan that they can export into china but that also would hurt chinas exports so china won't follow this. So now the USA are more or less sitting on a gigantic debt and till now there seems to be no way out (except infaltion or reset). That's why I thought about this and asked for opinions based on facts and not just stuff like "not going to happen" etc cause the prob is pretty complex.

http://prgroup10.files.wordpress.com/2009/11/china-us-national-debt-holdings.jpg

EDIT: Here's a graph of their debt
http://www.brillig.com/debt_clock/inflation.gif

their economy can never ever cover this up again

EDIT2: A good vid to this http://www.youtube.com/watch?v=bcc-TqvCXqU&feature=channel

OK I've just watched the whole thing from that guy he pretty much explains everything and summurizes everything I've read before that

so start with that: Crash Course: Chapter 10 - Inflation by Chris Martenson
http://www.youtube.com/watch?v=afWqKcqntfs&feature=channel

and end with: Crash Course: Chapter 17c
http://www.youtube.com/watch?v=6w6gf3tSGTg&feature=channel
at 4:10 he starts to sum everything up.

I know it takes a lot of time but 100% gets the point imo.

Originally posted by Parmaniac
That's why I thought about this and asked for opinions based on facts and not just stuff like "not going to happen" etc cause the prob is pretty complex.

how about this. pretend I'm stupid and explain plainly how current US debt will end in hyperinflation. but like, you explain it to me, I'm not going to bother with YouTube, sorry

Originally posted by inimalist
how about this. pretend I'm stupid and explain plainly how current US debt will end in hyperinflation. but like, you explain it to me, I'm not going to bother with YouTube, sorry

Originally posted by inimalist
nothing in there about hyper-inflation at all.

So, there is a massive buildup of public debt. And the lesson of history is that unless this buildup of sovereign debt is tackled eventually by raising taxes and controlling spending, then there are only two outcomes: default or high inflation.

Historically, we have seen a series of defaults and sovereign debt crises in both advanced and emerging market economies. If you are a country like the US, the UK or Japan that can monetise its fiscal deficits, then you won't have a sovereign debt event but high inflation that erodes the value of public debt. Inflation is therefore basically a capital transfer from creditors and savers to borrowers and dissavers, essentially from the private sector to the government.

While the markets these days are worrying about Greece, it is only the tip of the iceberg, or the canary in the coal mine of a much broader range of fiscal crises. Today it is Greece. Tomorrow it will be Spain, Portugal, Ireland and Iceland. Sooner or later Japan and the US will be at the core of the problem, shaking the global economy."

Inflation is the when money looses it's value, cause the bank just prints more.
I hope I don't need to explain HOW money looses it's value when more is getting pumped into the system cause it's quite obvious.

So the reason why inflation happens is cause a bank starts printing the shit out of itself.

But why?

Back in the day the money was "bounded" to gold, so you got a certain amount of paper money for a certain amount of gold you had that was now "stored/kept" in the treasury cause paper money was easier to handle and carry around.
Let's just say the relation was 1:1 (paper:gold) to make things easier.

As the revolutionary war started, the country had to spend money for the war but as they realised they war was getting to expensive they gave a **** about the "paper-money-gold-coin-boundry" and just printed more money to finance the war. Then money was let’s say 2:1 and therefore inflational.
After the war was over the people doesn't wanted paper money and went back to their silver/gold cause of the loss of value and therefore the inflation was solved cause they returned to "solid values".

The follwing 3 war/inflation relations are prooving this (1812-1814, civil war & WWI)

But after this something changed, the paper money wasn't "bounded" anymore to the gold like before, instead of this they "invented" the fiat money, fiat is latin and means "let it be done". (http://en.wikipedia.org/wiki/Fiat_money)

And there lies the main (fundamental) problem (see the 5 part video of the "Fundamental problem in our system" thread) the bank is lending money to the country, money that isn't really existing they just "create" it and in return they say “But for the money we lend you, you have to pay interests” which are impossible to repay cause the only money in the system is the money they brought into it so where’s the money for the interests supposed to come from? Farmers create vegetables, the industry creates cars but only the bank creates money.
Now you can argue they get money via exports from other countries but 1. other countries suffer from the same problems and 2. China where the US wants to export to isn’t leveling up the Yuan cause that would hurt their own economy (cause it’s build on exports).

A lot of people say you have to see the debt in relation to the economic growth (which isn’t really happening anymore or at least far far away from what it would need to grow) so this point is also moot.

Why does war starts inflation?: If you build something like a house or a car it has a value, a use so it will soak up the extra (inflational) money by doing its service by giving shelter or moving persons.
But in a war you build war machines, bombs and rockets. Bombs and rockets get blown up they don't give anything to the society and even tanks and stuff are so special that they have no real value for the society.
Current situation: The united states are making war in 2 places (Iraque, Afghanistan) and soon most likely Iran and other oil countries too.

So why does this end in an inlfation? The point is by the growing debt the country more or less promises the bank that the economy will grow more in the future to even out the debt which is practically impossible, the economy would have to grow exponentially along with the debt which will never happen* and the USA still spend money for warfare, by that the debt rises even more (cause of interests) and at a certain point there are only 2 options:
1. Reset the system and tell the bank that it’s just ****ing impossible to pay back the money
(I’m not entirely sure what that would mean for the society maybe it’s the better “choice” and will happen *reffering to the former posted YT vid*)
2. Hyperinflation to “shrink down” the debt in a small amount of time to near 0 by letting the money and therefore the debt loose it’s value.

(And it’s still growing)

In the end the USA will reform their currency and most likely start the debt game again.

Hopefully I haven't forgot anything.