Causes of hyperinflation

[Zarathustra]

having a currency backed by nothing, over printing the currency and unregulated derivative banking policies.

The currency is backed by debt, and debt isn't inflating as fast as before. That's the reason why we are far away from inflation.
Over-indebted economies (Japan, Europe, US) can hardly expand debt/credit anymore; therefore we don't see infation in those economies.

You mistakenly included Japan into this list. While I agree that US and Europe private sectors can hardly expand debt currently, for Japan the situation is different. Japanese are unwilling to borrow, not unable. In fact, they have enormous savings stash compared to the rest of the world.

Savings? Funny. That's DEBT on the other side of the balance sheet! The more savings in the world - the more debt.

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[solarion]

Many believe that the collapse of government fiat ponzi scams can be accelerated by off ledger (unbanked)savings. This can be non-fiat denominated assets or even physical currency notes. This is also what would be expected to sustain in an economic collapse.

I don't pretend to know what's going on in the mind of the average Japanese peasant, but they're a smart and proud people. I don't find the notion that they've lost faith in their currency and/or government to be all that far fetched. Perhaps like awake Americans they don't know exactly what to do to bring down the machinery of oppression and they're just compartmentalizing.

[STT]

Savings? Funny. That's DEBT on the other side of the balance sheet! The more savings in the world - the more debt.

Well done you've completed your transition to join the darkside become treasury secretary


Is a farmer saving a crop for the winter a poorer man for it.  He could just sell it at market but instead he saves it.    Is he in debt, no he just saved production.  That is the origin of savings, our modern muddle of traded debt as money with more debt to pay the interest makes it all a joke.  
  In that case maybe you are correct, savings just represent a greater obligation for payment.  With nothing to back the dollar absolutely, savings just become a negative but in that case you should be saving something of worth not denying the whole idea of saved production


http://www.youtube.com/watch?v=16ywzJ3U7rg

[dadugan]

British didn't suffer hyperinflation when the world abandoned the pound and switch to dollar.

[gts476]

British didn't suffer hyperinflation when the world abandoned the pound and switch to dollar.

You mean at the end of world war 2? The Bretton Woods agreement?

You mean when the dollar was gold backed and countrys sent their gold to fort knox in exchange for dollars?

Is this what you ment?

When the world agreed to use the dollar, backed by gold, to stabilise international trade post war?

[STT]

30% interest rates and only electricity on 3 days of the week suggest problems in that transition.  Maybe not hyper but sterling lost far more then dollar in last hundred years

[Zarathustra]

Savings? Funny. That's DEBT on the other side of the balance sheet! The more savings in the world - the more debt.

Well done you've completed your transition to join the darkside become treasury secretary


Is a farmer saving a crop for the winter a poorer man for it.  He could just sell it at market but instead he saves it.    Is he in debt, no he just saved production.  That is the origin of savings, our modern muddle of traded debt as money with more debt to pay the interest makes it all a joke.  
  In that case maybe you are correct, savings just represent a greater obligation for payment.  With nothing to back the dollar absolutely, savings just become a negative but in that case you should be saving something of worth not denying the whole idea of saved production


http://www.youtube.com/watch?v=16ywzJ3U7rg

The Japanese are saving money, which ist debt: 500 percent of GDP.

[NotLambchop]

...
Is a farmer saving a crop for the winter a poorer man for it.  ...

Problems begin when, instead of planting it in the spring, he continues "saving" it.

But stop thinking of money in terms of grain--it isn't.
A more fitting analogy would be bread.  You "save" it, and soon you have a warehouse full of mice and moldy bread

[Erdogan]

Savings? Funny. That's DEBT on the other side of the balance sheet! The more savings in the world - the more debt.

You really have to set your imagination free, and start to question what you are served by the masters.

There really is money, which is bills and coins. These work just like bitcoins. Then there is debt. Debt hast two parties, is set to be paid back at some point in the future, and normally the debitor has to pay interest. Debt extends the money, and reduces the value of the money unit.

Any debt works like that, even the casual loan of a few dollars you give to a friend.

Although debt is a nice function that can increase freedom, debt is not necessary for the world economy     to function. Without debt, the money would just have higher value. Any venture any size could still be done, you just need to summon more people to take part in your project.

[onlyu]

30% interest rates and only electricity on 3 days of the week suggest problems in that transition.  Maybe not hyper but sterling lost far more then dollar in last hundred years

Interesting.

Do you have a source on this?

And a more comprehensive history would be nice also.

[STT]

Anyone over 50 from the UK can tell you they cut the electric in the seventies.  It was only there for business to continue really so evenings would be lights out, Uk was very poor after WW2 ended and rationing continued for about a decade

 

http://www.marketoracle.co.uk/Article5244.html


Sorry it was inflation that was 30%, the rates were half that.   30% per month would be hyper





& USA

[arbitrage001]

Anyone over 50 from the UK can tell you they cut the electric in the seventies.  It was only there for business to continue really so evenings would be lights out, Uk was very poor after WW2 ended and rationing continued for about a decade

Thought the decline of UK was smooth and they didn't suffer the same kind of pain US is having right now.

If history is any guide, exchange control and rationing will happen not too distance in the future for US.

[Zarathustra]

Savings? Funny. That's DEBT on the other side of the balance sheet! The more savings in the world - the more debt.

You really have to set your imagination free, and start to question what you are served by the masters.

There really is money, which is bills and coins. These work just like bitcoins. Then there is debt. Debt hast two parties, is set to be paid back at some point in the future, and normally the debitor has to pay interest. Debt extends the money, and reduces the value of the money unit.

Any debt works like that, even the casual loan of a few dollars you give to a friend.

Although debt is a nice function that can increase freedom, debt is not necessary for the world economy     to function. Without debt, the money would just have higher value. Any venture any size could still be done, you just need to summon more people to take part in your project.

Who told you those fairytales? Debt was on top of any kind of money from the very beginning. The first debt was the tribute (tax) to the masters and rulers. This started the economy and all kind of money. Untaxed, ungoverned people who live beyond the state didn't know tribute, tax and debt, and therefore they didn't need the derivative of the tax, which is money. They are self-sufficient.

Read Graeber:

http://en.wikipedia.org/wiki/Debt:_The_First_5000_Years

and Paul C. Martin:
http://cdn.preterhuman.net/texts/wars_and_weapons/us_weapon_export_guide/Machttheorie-Martin-Symp.pdf

[Erdogan]

Savings? Funny. That's DEBT on the other side of the balance sheet! The more savings in the world - the more debt.

You really have to set your imagination free, and start to question what you are served by the masters.

There really is money, which is bills and coins. These work just like bitcoins. Then there is debt. Debt hast two parties, is set to be paid back at some point in the future, and normally the debitor has to pay interest. Debt extends the money, and reduces the value of the money unit.

Any debt works like that, even the casual loan of a few dollars you give to a friend.

Although debt is a nice function that can increase freedom, debt is not necessary for the world economy     to function. Without debt, the money would just have higher value. Any venture any size could still be done, you just need to summon more people to take part in your project.

Who told you those fairytales? Debt was on top of any kind of money from the very beginning. The first debt was the tribute (tax) to the masters and rulers. This started the economy and all kind of money. Untaxed, ungoverned people who live beyond the state didn't know tribute, tax and debt, and therefore they didn't need the derivative of the tax, which is money. They are self-sufficient.

Read Graeber:

http://en.wikipedia.org/wiki/Debt:_The_First_5000_Years

and Paul C. Martin:
http://cdn.preterhuman.net/texts/wars_and_weapons/us_weapon_export_guide/Machttheorie-Martin-Symp.pdf

I have, in fact, but it appeared he did not know anything about money or debt.

[g4c]

... There really is money, which is bills and coins. These work just like bitcoins ....

Ha ha.

[Pobre]

Well hyperinflation is something when there is a lot of money that gets into the circulation suddenly. As we saw in the case of germany, when the germans started printing notes to battle the wall street crash they had an hyperinflation and the people had to load money in suitcases to buy a loaf of bread.

[g4c]

Well hyperinflation is something when there is a lot of money that gets into the circulation suddenly. As we saw in the case of germany, when the germans started printing notes to battle the wall street crash they had an hyperinflation and the people had to load money in suitcases to buy a loaf of bread.

Indeed, fiat attempts of the past have all failed (most with hyper-inflation), many modern ones have, are, or will.

[RoadTrain]

having a currency backed by nothing, over printing the currency and unregulated derivative banking policies.

The currency is backed by debt, and debt isn't inflating as fast as before. That's the reason why we are far away from inflation.
Over-indebted economies (Japan, Europe, US) can hardly expand debt/credit anymore; therefore we don't see infation in those economies.

You mistakenly included Japan into this list. While I agree that US and Europe private sectors can hardly expand debt currently, for Japan the situation is different. Japanese are unwilling to borrow, not unable. In fact, they have enormous savings stash compared to the rest of the world.

Savings? Funny. That's DEBT on the other side of the balance sheet! The more savings in the world - the more debt.

Financial savings are always debt on the other side of the balance sheet.
The thing that matters is who is the issuer of the debt. When debt is issued inside the private sector (by lending, e.g.) the net private savings don't increase.
When the debt is issued by government to the private sector, the private sector's savings increase accordingly.
Government debt is an asset to the private sector. Government issues debt when there's a propensity to net save in the private sector.

[ShakyhandsBTCer]

Hyperinflation is caused when a country borrows too much of it's currency and/or sets it's interest rate much lower then the market would support and/or make it very easy to get out of debt obligations.

[semaforo]

Just checked this thread after a while, just wanted to say thank you for the informative posts, especially interesting is the discussion on inflation as a tool for renegotiating debt.