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Author Topic: Real Inflation only happens when Central Banks print High Denominated Notes?  (Read 360 times)
qwertyup23
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July 02, 2021, 05:27:19 PM
 #41

I noticed that every country that experienced high/hyper inflation, the central bank in that country has to print a very high denominated fiat note/bill.

For example in Zimbabwe I see kids carrying notes in their pockets displaying on them $10 Trillion Zimbabwe dollars. These poor starving kids are trillionaires much richer than the richest billionaires like Elon Musk and Bill Gates on the planet on a monetary unit scale.

In the US the highest denominated note bill now is $100.

So the question is as long the highest denominated bill still remains $100 then there wont be any high/hyper inflation worries in the future?

I think this would be irrelevant.

Inflation happens when there is an abundant supply of cash in the market with only less demand. Due to the amount of cash circulating, the value of the goods will definitely increase which translates to inflation. If the government opts to print cash in the process, the amount of cash circulating would skyrocket, increasing further the amount of goods which then translates to high denominations of money.

It would be irrelevant if bills are printed only as $100 since the value of goods in the market would not change. Instead of paying one coffee for $1000 (assuming hyperinflation), you would pay the coffee ten (10) $100 bills in the process.

R


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