http://www.financialsense.com/contributors/trac-financial/money-mud-hyperinflation came across this in November and found it highly illuminating. just wondering if anybody else had read it and what their thoughts were?
Well, I think it's very good even if only for the breadth of examples it draws from. Some quick points of interest; Great quote from Austrian Economic charger Ludwig von Mises regarding inflation terminology. By clouding the definition of inflation in the public's eye, the problem can never be pinned down and tackled. Like "Voldemort" the term 'inflation' is a word that is feared, few really understand and thus spoken with a hushed voice. Watch out for price fixing as a warning sign to a big inflationary event, these can never be sustained, and when repealed result in huge price inflation. Thought it was a bit unfair using Ben Bennake's own quotes against him (hehehe!) Would've liked to gone more into Deflation more rather than concentrating on Inflation. Nice find villiagegate!
Cheers for the reply Clawhammer. I hear you on the deflation side of the argument. I'm gonna go hunting for papers on Deflation I think. Then I can try to weigh the two arguments against each other. As an interesting side note, this report was authored by a company out of Brisbane. I just checked their site and found they have a news feed here : http://tracfinancial.com.au/_blog/latest_news and a PM research compendium here : http://tracfinancial.com.au/_blog/latest_news/post/Physical_Precious_Metals_Investor_Compendium/ will check them out over the next few days.
Bendjamin2010 has been doing his best to educate us here on the terrors of deflation. It's always deflation that acts as a 'monetary capcitator' for want of a better term. The deflationary event soaks up all the money in the system, especially all the extra cash the government floods out to keep the wheels churning, and then at the first sign of public confidence, the capacitator discharges all that cash into the economy causing a hyperinflation. To use another analogy, Deflation is like the cigarette that causes the lung cancer of high/hyperinflation. Governments know to fight the cause of the disease rather than the disease itself...that's why they're doing their utmost to stop cigarette smoking. Yet when it comes to the economy they're obsessed with inflation and fighting that while not understanding what the cause problem is. It's kinda like those hospitals in the movies from the 50's where the doctors and nurses are all smoking over their patients, scratching their heads at why he's sick and recommending a stiff drink and a tour in the army to sort him out.
