Saturday, July 7, 2012

What is Hyperinflation ?

More cash printed does not make the US better off. It actually worsens our situation.  Printing more money or "Quantitative Easing" fuels an inflationary spiral.

    I did not enjoy the college course I took in Economics.  In fact, I wrote an entire paper on how Economics is "soft and squishy science" as it attempts to use scientific principles to explain and predict human behaviors, much as Sociology does.   My  Phd economics professor, who was from Ireland, probably didn't like me much, but he did not let my views on his life's work adversely impact my grade.
             Economics is still hounding me, all these years later, and I still disagree with some of the view of economists in general.
                Hyperinflation is what occurs when a government prints additional money in fairly large amounts.  Basically, more paper chases the same amount of goods and services, and therefore everything from oranges to a new well installation will cost more paper, as a result.  Hyperinflation is not peculiar to the world in the present.  There are many times when hyperinflation has occurred. Sometimes it has occurred because excess money was printed. Sometimes political instability or mismanagement created hyperinflation. Sometimes war has generated hyperinflation.

The chart which follows deals with percentage of inflation per month, the years this occurred, and the nation in which it occurred.   These are good examples, but are certainly NOT an inclusive listing.

These are example of hyperinflation:

FRANCE 1789-96 143.26
GERMANY 1920-23 29,525.71
AUSTRIA 1921-22 124.27
POLAND 1921-1924 187.54
SOVIET UNION 1922-24 278.72
HUNGARY 1923-24 82.17
GREECE 1942-45 11,288.00
HUNGARY 1945-46 1,295,000,000,000,000,000.00
TAIWAN 1945-49 398.73
CHINA 1947-49 4,208.73
BOLIVIA 1984-86 120.39
NICARAGUA 1986-89 126.62
PERU 1988-90 114.12
ARGENTINA 1989-90 196.60
POLAND 1989-90 77.30
BRAZIL 1989-93 84.32
YUGOSLAVIA 1990 58.82
AZERBAIJAN 1991-94 118.09
CONGO 1991-94 225.00
KRYGYZSTAN 1992 157.00
SERBIA 1992-94 309,000,000.00
UKRAINE 1992-94 249.00
GEORGIA 1992-94 196.72
ARMENIA 1992-94 438.04
TURKMENISTAN 1993-96 62.50
BELARUS 1994 53.40
KAZAKHSTAN 1994 57.00
TAJIKISTAN 1995 78.10
BULGARIA 1997 242.70
ZIMBABWE 1997 2,600.20
SOURCE : Monetary Regimes and Inflation:History,Economics and Political Relationships by Peter Bernbolz Northampton,Mas:Edward Edgar Publishing 2003

              This is important because we must accept, as Americans, and then as citizens of the world, that hyperinflation, which has destroyed many an economy, is coming for ours as well.  We must accept that this is a problem, in order to try to goad our representatives into behaving more responsibly.   If this fails, then we need to have reasonable and effective plans for survival for our own families.through such times.

              I am not an economist, and I don't even play one on the radio, however, it is my opinion that without sweeping course correction, which I do not believe will be forthcoming, that the US is headed for a hyperinflationary spiral.   More posts on this are to come.


Gorges Smythe said...

WHAT? You don't trust the wisdom of our government? I'm shocked! ;-)

JaneofVirginia said...

Sadly, they have been making too many severely ill advised decisions with OUR money for too long. No, I do not trust them with financial decisions. As in the words of a wonderful bumper sticker I see occasionally, "I love my's my government I do not trust".

Matt said...

My question is how long will the government be able to continue to lie and fudge the reports and hide the truth that we are already in an inflationary period.

JaneofVirginia said...

As long as the majority of Americans allow them to.