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; Originally Posted by LondonJimmy If you can't work it out for yourself I am not sure I should bother, especially ...

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Old Jun 26, 2010, 12:17am   #561
 
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Re: Could the Weimar Hyperinflation Happen Again in America?

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Originally Posted by LondonJimmy View Post
If you can't work it out for yourself I am not sure I should bother, especially when you post like ipso facto you are correct.

Modern definition is that inflation and deflation tend to relate to prices. In the long run changes in the money supply tend to equate to changes in price, but the modern definition relates to prices.

Older economics textbooks refer to the money supply. I buy into this definition. If we look at the last three decades then there has been plenty of inflation (increase in the money supply) but prices for things like computers, plasma tv's, calculators etc. has been falling due to advances in technology. These prices would suggest a deflationaty environment by the modern definition, whereas if you look at the money supply you would see that we were in an inflationary environment during the last 3 decades.
Well this is where NRs arguement fails.

To explain these discrepancies in Ms and prices and nominal and real inflation etc etc one must consider economic activity the frequency of exchange of money from one hand to another as well as increase in productivity and output for goods and services.

Then one can see the economy and transaction mechanism how money feeds into prices at work.

EG.

Ms rises x frequency of exchange stays same = Output rises x prices remain same.

In electronic items if Output of these items due to mass production rises ie

OUTPUT > Ms

then for the equation to balance prices must fall.

HIGH OUTPUT x FALL IN PRICES.
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Old Jun 26, 2010, 12:18am   #562
 
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Re: Could the Weimar Hyperinflation Happen Again in America?

Also to flip the question over, seeing you think i am wrong in my theory and views. Why is it i make a living from trading and do rather well from it? Another pondering for your glass of scotch..
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Old Jun 26, 2010, 12:18am   #563
 
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Re: Could the Weimar Hyperinflation Happen Again in America?

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Originally Posted by N Rothschild View Post
and im still waiting on why fed needs to push yields to 0, from you two experts.
So that it can sell junk bonds to mugs like you...
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Old Jun 26, 2010, 12:19am   #564
 
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Re: Could the Weimar Hyperinflation Happen Again in America?

Uh huh, care to hazzard a real guess? or do you not know? Did they not teach you that as part of your supply and demand equations?
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Bullsh!t, Bearsh!t all smells the same to me!

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Old Jun 26, 2010, 12:22am   #565
 
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Re: Could the Weimar Hyperinflation Happen Again in America?

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Originally Posted by Atilla View Post
Well this is where NRs arguement fails.

To explain these discrepancies in Ms and prices and nominal and real inflation etc etc one must consider economic activity the frequency of exchange of money from one hand to another as well as increase in productivity and output for goods and services.

Then one can see the economy and transaction mechanism how money feeds into prices at work.

EG.

Ms rises x frequency of exchange stays same = Output rises x prices remain same.

In electronic items if Output of these items due to mass production rises ie

OUTPUT > Ms

then for the equation to balance prices must fall.

HIGH OUTPUT x FALL IN PRICES.
Right so, let me get this right..if production of electornic items increase, supply icnreases, prices fall? yeh? sweet.

So where does the producer get the money to pay for the increase in production.. bank loans? Sale? Etc? But if there is no money in the system to lend how is this company going to start mass producing **** to increae supply and make prices fall? They dont. And if the consumer has no money to buy said items, prices will far regardless of supply.
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"Let me issue and control a nation's money and I care not who writes the laws." Mayer Amschel Rothschild

Bullsh!t, Bearsh!t all smells the same to me!

"It is not cheap to develop automated systems , mine already cost over $1m. " oildaytrader
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Old Jun 26, 2010, 12:23am   #566
 
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Re: Could the Weimar Hyperinflation Happen Again in America?

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Originally Posted by N Rothschild View Post
Uh huh, care to hazzard a real guess? or do you not know? Did they not teach you that as part of your supply and demand equations?
Stop blowing your trumpet and going off on tangents.

You haven't dealt with

Ms fall = Price fall yet???

On balance yes true correlation but not always. WAY TOO SIMPLISTIC.

Your dinky winky formula doesn't explain Jimmy's observation does it?
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Old Jun 26, 2010, 12:24am   #567
 
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Re: Could the Weimar Hyperinflation Happen Again in America?

If you answer the yield question it will unravel the rest, and i asked first, manners please..

Go just admit you dont know? Then we can put this to bed that while you may have a good grasp of text book economics you dont know how things REALLY work, which we have actually proved time and time again in the various threads regarding your lack of understanding in money creation and the credit markets.

And i will admit you seem to be more clued up on the supply demand ratios etc than i am, but it would seem i know more about the parts that matter! (hence being a proftible trader and you not)
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Bullsh!t, Bearsh!t all smells the same to me!

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Old Jun 26, 2010, 12:29am   #568
 
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Re: Could the Weimar Hyperinflation Happen Again in America?

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Originally Posted by Atilla View Post
Stop blowing your trumpet and going off on tangents.

You haven't dealt with

Ms fall = Price fall yet???

On balance yes true correlation but not always. WAY TOO SIMPLISTIC.

Your dinky winky formula doesn't explain Jimmy's observation does it?
as i stated in earlier post, jimmy observation is completely incorrect.
__________________
"Let me issue and control a nation's money and I care not who writes the laws." Mayer Amschel Rothschild

Bullsh!t, Bearsh!t all smells the same to me!

"It is not cheap to develop automated systems , mine already cost over $1m. " oildaytrader
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Old Jun 26, 2010, 12:30am   #569
 
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Re: Could the Weimar Hyperinflation Happen Again in America?

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Originally Posted by N Rothschild View Post
Right so, let me get this right..if production of electornic items increase, supply icnreases, prices fall? yeh? sweet.

So where does the producer get the money to pay for the increase in production.. bank loans? Sale? Etc? But if there is no money in the system to lend how is this company going to start mass producing **** to increae supply and make prices fall? They dont. And if the consumer has no money to buy said items, prices will far regardless of supply.
Good point!

So what happens if the producers have productivity improvements?

Before we used to have wage inflation.

Reason why inflation avoided this time round is due to migrant labour preventing wage inflation and increased productivity improvements. Thus you can maintain higher output at stable prices with changes in Ms or economic activity.

You capiche?
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2. 80% of what happens to you can be attributed to 20% of your behaviour

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Old Jun 26, 2010, 12:32am   #570
 
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Re: Could the Weimar Hyperinflation Happen Again in America?

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Originally Posted by Atilla View Post
Good point!

So what happens if the producers have productivity improvements?

Before we used to have wage inflation.

Reason why inflation avoided this time round is due to migrant labour preventing wage inflation and increased productivity improvements. Thus you can maintain higher output at stable prices with changes in Ms or economic activity.

You capiche?
Wrong, well partly right. But not the real reason for lack of inflation, or to be correct, the disinflation that has occurred over the last 2 decades.
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Bullsh!t, Bearsh!t all smells the same to me!

"It is not cheap to develop automated systems , mine already cost over $1m. " oildaytrader
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