>''If once public opinion is convinced that the increase in the quantity of money will continue and never come to an end, and that consequently the prices of all commodities and services will not cease to rise, everybody becomes eager to buy as much as possible and to restrict his cash holding to a minimum size. For under these circumstances the regular costs incurred by holding cash are increased by the losses caused by the progressive fall in purchasing power. The advantages of holding cash must be paid for by sacrifices which are deemed unreasonably burdensome. This phenomenon was, in the great European inflations of the 'twenties, called flight into real goods (Flucht in die Sachwerte) or crack-up boom (Katastrophenhausse).'' - Ludwig Von Mises, 1949, 'Human Action'
>''Eventually, the public begins to realize what is taking place. It seems that the government is attempting to use inflation as a permanent form of taxation. But the public has a weapon to combat this depredation. Once people realize that the government will continue to inflate, and therefore that prices will continue to rise, they will step up their purchases of goods. For they will realize that they are gaining by buying now, instead of waiting until a future date when the value of the monetary unit will be lower and prices higher. In other words, the social demand for money falls, and prices now begin to rise more rapidly than the increase in the supply of money. When this happens, the confiscation by the government, or the “taxation” effect of inflation, will be lower than the government had expected, for the increased money will be reduced in purchasing power by the greater rise in prices. This stage of the inflation is the beginning of hyperinflation, of the runaway boom.'' - Murray Rothbard, 1962, 'Man Economy And State'
>During the 1920s, Ludwig von Mises outlined a typical inflation process from his analysis of the catastrophic hyperinflation in Germany in 1923—the first runaway inflation in a modern, industrialized country. The German inflation had begun during World War I, when the Germans, like most of the warring nations, inflated their money supply to pay for the war effort, and found themselves forced to go off the gold standard and to make their paper currency irredeemable. The money supply in the warring countries would double or triple. But in what Mises saw to be Phase I of a typical inflation, prices did not rise nearly proportionately to the money supply. If M in a country triples, why would prices go up by much less? Because of the psychology of the average German, who thought to himself as follows: “I know that prices are much higher now than they were in the good old days before 1914. But that’s because of wartime, and because all goods are scarce due to diversion of resources to the war effort. When the war is over, things will get back to normal, and prices will fall back to 1914 levels.” In other words, the German public originally had strong deflationary expectations. Much of the new money was therefore added to cash balances and the Germans’ demand for money rose. In short, while M increased a great deal, the demand for money also rose and thereby offset some of the inflationary impact on prices.
>In Phase I of inflation, the government pumps a great deal of new money into the system, so that M increases sharply to M′. Ordinarily, prices would have risen greatly (or PPM fallen sharply) from 0A to 0C. But deflationary expectations by the public have intervened and have increased the demand for money from D to D′, so that prices will rise and PPM falls much less substantially, from 0A to 0B.
>In Germany, after the war was over, prices still kept rising; and then the post-war years went by, and inflation continued in force. Slowly, but surely, the public began to realize: “We have been waiting for a return to the good old days and a fall of prices back to 1914. But prices have been steadily increasing. So it looks as if there will be no return to the good old days. Prices will not fall; in fact, they will probably keep going up.” As this psychology takes hold, the public’s thinking in Phase I changes into that of Phase II: “Prices will keep going up, instead of going down. Therefore, I know in my heart that prices will be higher next year.” The public’s deflationary expectations have been superseded by inflationary ones. Rather than hold on to its money to wait for price declines, the public will spend its money faster, will draw down cash balances to make purchases ahead of price increases. In Phase II of inflation, instead of a rising demand for money moderating price increases, a falling demand for money will intensify the inflation.
>Here, in Phase II of the inflation, the money supply increases again, from M′ to M′′. But now the psychology of the public changes, from deflationary to inflationary expectations. And so, instead of prices rising (PPM falling) from 0B to 0D, the falling demand for money, from D′ to D′′, raises prices from 0D to 0E. Expectations, having caught up with the inflationary reality, now accelerate the inflation instead of moderating it.
No shit but the usd is still the big dog in the yard. During times of fear people flock to it and it’s needed for oil, all usa has to do is bomb some shitholes and the neighbouring countries will dump half their currency for usd. Usd is safe as the king so long as people believe it won’t be conquered.
Dylan Gutierrez
Phase III of inflation
>When expectations tip decisively over from deflationary, or steady, to inflationary, the economy enters a danger zone. The crucial question is how the government and its monetary authorities are going to react to the new situation. When prices are going up faster than the money supply, the people begin to experience a severe shortage of money, for they now face a shortage of cash balances relative to the much higher price levels. Total cash balances are no longer sufficient to carry transactions at the higher price. The people will then clamor for the government to issue more money to catch up to the higher price. If the government tightens its own belt and stops printing (or otherwise creating) new money, then inflationary expectations will eventually be reversed, and prices will fall once more—thus relieving the money shortage by lowering prices. But if government follows its own inherent inclination to counterfeit and appeases the clamor by printing more money so as to allow the public’s cash balances to “catch up” to prices, then the country is off to the races Money and prices will follow each other upward in an ever-accelerating spiral, until finally prices “run away,” doing something like tripling every hour. Chaos ensues, for now the psychology of the public is not merely inflationary, but hyperinflationary, and Phase III’s runaway psychology is as follows: “The value of money is disappearing even as I sit here and contemplate it. I must get rid of money right away, and buy anything, it matters not what, so long as it isn’t money.”
As mentioned in the text, hyperinflation is only a problem if the public awakens to the governmental policy of permanent inflation.
We currently live in a society where education standards are dropping, stimulus tends avoids the middle class (and is either dispersed to the dumbest/poorest or richest), and there are welfare cliffs in place that incentive the very poor to stay very poor on purpose.
Nobody is going to awaken to the reality of hyperinflation when they are all fast asleep by design and are too stupid to figure out the correct response to the situation (invest). Let the printers run.
I've had high paying jobs for a while, and NEVER have had more than like ~5,000 USD in my bank account. It's typically far less than that.
I buy crypto, I buy silver, I buy preparedness stuff, I buy furniture, cars, art whatever. I've felt since like 2016 that these green papers are fucking worthless. So I'd rather have stuff I like.
Juan Wilson
If only we removed money and simply distributed what is produced.
Matthew Jackson
The highly stigmatized currency of the magic mushroom market that has lost more buying power year over year than usd? Well done!
Brandon Flores
>I'm an antiwork revolutionary and/ or frogneet master race! Your landlord gave birth to you, and when the bank tells her to vacate you'll be sitting in the backseat of her car, with Mr Sprinkles your cat, on the way to live with grammy.
Lincoln Allen
I don't even have a landlord, do you never have fun online? Go back where you came from with your "antiwork" reference.
Oliver Perez
I've been here since Mr Sprinkles was given to you on your 7th birthday eleven years ago. It stops being fun after a few years, and just becomes a dopamine addiction like Facebook.
Hudson Campbell
I've been reading the same stuff since 2012 at least. Any day now, aaaaany day...
Logan Gomez
>preaching based on assumptions Go back, I'm probably twice your age.
>let's keep fighting about gay shit in a thread about the velocity of money hitting critical mass. Do you have fun posting your anti landlord stuff here or reddit and twitter? Here you get to pretend you win arguments on the internet, which gives you a 10 second hit of dopamine; meanwhile, you can check in on your infinite upvotes over there for a heckin validation boost whenever you want.
