Could the Weimar Hyperinflation Happen Again in America?

This is a discussion on Could the Weimar Hyperinflation Happen Again in America? within the Economic & Fundamental Analysis forums, part of the Methods category; I believe that hyperinflation is a near certainty in the UK and USA. Massive trade and budget deficits and falling ...

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Old Jul 13, 2009, 3:00pm   #16
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I believe that hyperinflation is a near certainty in the UK and USA. Massive trade and budget deficits and falling tax revenues make it very difficult to pay debts back with anything but devalued currency. Both countries have been purchasing their own govt bonds to keep interest rates artificially low and create a market for the debt. In other words electronically printing money. This is Zimbabwe style economics. The debt to gdp figures that are used disguise the fact that the economic activity is being created not by useful productivity, but by borrowing and printing more money used to bail out bankrupt institutions and companies. Deflation will be a short term symptom of this crisis, followed by currency collapse and runaway inflation.
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Old Jul 13, 2009, 3:01pm   #17
 
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fwiw poborsky, I agree

I also think that it will be extraordinarily quick and catch us all off guard.
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Old Jul 13, 2009, 3:03pm   #18
 
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Quote:
Originally Posted by poborsky View Post
I believe that hyperinflation is a near certainty in the UK and USA. Massive trade and budget deficits and falling tax revenues make it very difficult to pay debts back with anything but devalued currency. Both countries have been purchasing their own govt bonds to keep interest rates artificially low and create a market for the debt. In other words electronically printing money. This is Zimbabwe style economics. The debt to gdp figures that are used disguise the fact that the economic activity is being created not by useful productivity, but by borrowing and printing more money used to bail out bankrupt institutions and companies. Deflation will be a short term symptom of this crisis, followed by currency collapse and runaway inflation.
i think some of you underestimate the era of inflation and credit creation that has come to an end..the fed buying government notes is just a small aprt of money creation..
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Old Jul 13, 2009, 3:06pm   #19
 
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for one, if such mega hyper world destorying inflation is coming, why is gold not even trading above last years highs?

imo the entire fiat monetary system is slowly failing..
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Old Jul 13, 2009, 3:08pm   #20
 
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why do gold dealers advertize on the all conspiracy radio shows/websites

if they were so sure hyperinflation was coming it makes no sense to swap their gold, for joe tinfoilhat's worthless paper money

instead of making 20-30% on each ounce (whatever their profit margin is, i don't know) which will be destroyed by the h.i anyway
they could just sit on all their gold and make a 200-300% or MORE return when the hyperinflation comes

the dealers couldn't be swindling joe public could they :O
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Old Jul 13, 2009, 3:13pm   #21
 
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last 10 years has been mega inflationary, to the point governments hid the true figures..without the continuation of the credit bubble how are prices gona go hyper inflationary? the govt printing a tril or 2 is nothing compared to the credit that has been created in the last decade
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Old Jul 13, 2009, 3:28pm   #22
 
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Genics old boy if fiat money collapses that is the ultimate inflation...
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Old Jul 13, 2009, 3:31pm   #23
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I think a better and more recent example would be Argentina who increased deficit spending in response to a recession. Falling taxes, bank failures and printing money leading to a loss of confidence in its currency as the country struggled to meet debt payments.
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Old Jul 13, 2009, 3:32pm   #24
 
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America aint Argentina is it though. Argentina debt was in foreign currency which as most people know is economic suicide.
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Old Jul 13, 2009, 3:33pm   #25
 
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Originally Posted by arabianights View Post
Genics old boy if fiat money collapses that is the ultimate inflation...
how? if fiat money ceased to exist inflation wouldn't really be possible on the same scale as it is now..countrys would be forced to live with in their means
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Old Jul 13, 2009, 3:41pm   #26
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America aint Argentina is it though
The only difference is perception. Paper money is a reflection of the value of a nation and its productivity. The US has massive debts and is expected to keep borrowing trillions for years to come.
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Old Jul 13, 2009, 3:44pm   #27
 
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see me edit to the post. also Weimar Germany's debt was issued in foreign currency. using either as a comparison to the current situation is null and void.

"See, if your currency declines when you have issued debt in a foreign currency then the principal value of that loan has just gone up. This in turn causes your credit rating to decline (your debt-to-income goes up) which in turn forces your currency lower, which makes the principal value go up again, which....." KD
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Old Jul 13, 2009, 3:52pm   #28
 
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Originally Posted by Genics View Post
how? if fiat money ceased to exist inflation wouldn't really be possible on the same scale as it is now..countrys would be forced to live with in their means
inflation of the fiat currency would be infinity% as it would become worthless, dig?

Of course they could tie it to some commodity, but how would they back that up?
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Old Jul 13, 2009, 4:09pm   #29
 
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thats if they scrapped the currency, you could stop fiat currency creation slowly without having to replace the actual currency..(i think) perhaps we can discuss this at our next meeting of the secret order of zion
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Old Jul 13, 2009, 5:01pm   #30
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for one, if such mega hyper world destorying inflation is coming, why is gold not even trading above last years highs?

imo the entire fiat monetary system is slowly failing..
are you joking or what

fiat money is expanding at a never seen rate before, whats these reckless loans, bailouts, stimulus packages.

all this money right now is with the banks when it gets to the public inflation will rise so fast your pants will fall down. gold will obviously rise with it,
this will happen most likly in 2010-11 or maybe into 2012
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