Hyperinflation Is Not Inevitable (Default Is)
by Gary North
Mises.org
Hyperinflation is always a possibility for any national government or central bank. If a national government is running massive deficits, it can call on the central bank to buy treasury bills or treasury bonds with newly created money. This digital money is transferred to the treasury, which then spends the money into circulation.
There have been cases of hyperinflation in the past that have become legendary. The most famous of all of these hyperinflations is Germany from 1921 through 1923. Simultaneous with that hyperinflation was a hyperinflation in Austria. These were not the worst cases of hyperinflation in history, but they were the worst cases in industrial societies. The worst case was Hungary for two years immediately after World War II. The second-worst case took place a few years ago in Zimbabwe. Both were agricultural nations.
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2012-08-20 11:44:31
Source: http://financialsurvivalnetwork.com/2012/08/hyperinflation-is-not-inevitable-default-is/
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Hyperinflation is inevitable because the Fed creates billions of new dollars every month.
Hyperinflation is always a political event. Central Banks will not willingly cause hyperinflation because it erases debt and destroys currency (their hold on power). Despite the fact that the Fed in the US has created trillions of dollars, trillions of dollars of credit has also defaulted so the overall supply of broad-money has only grown slightly (just the way they like it).
So yes, hyperinflation is not inevitable, but deflation and depression certainly are. If hyperinflation ever comes to America’s shores it will be a response by politicians to years of crushing deflation and defaults that we have yet to suffer through….
Inflation? Well; lets see. The government can’t sell enough bonds to foreigners to support its deficit spending so they print money to purchase its own bonds to increase the deficit and at the same time it also increases the amount of new money injected into the economy. Isn’t that like borrowing money on your credit card to make the monthly payment and increasing the balance due at the same time? I can remember when the amount of money printed and “injected into the economy” was printed in the Wall Street Journal every week. No more! Why? Because a president, (I will not mention a name) ordered the treasury to stop providing these figures. How much new money injected is not known, so how can you tell if inflation exist? You will have to keep your eyes on the prices of everyday items. Are they increasing? You bet! That is inflation and when you can no longer buy a loaf of bread due a price rise, well, Hyperinflation!