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RE: Always Ignore The Inflationists

in LeoFinance3 years ago

For those who are not aware, hyperinflation is a run in prices at the rate of 50% per month. Outside some countries that nuked their currency, this is not even conceivable.

Nuking is the right word. The narrative that inflation will get out of hand automatically is misleading and based on a small number of extraordinary cases. The Weimar Germany hyperinflation occurred nine years after the Reich decided fund the First World War entirely by borrowing rather than taxation, after which the Germans were forced to pay reparations to the other side on top of that huge debt. They had no better options.

In recent history, Zimbabwe and Venezuela mismanaged their currency on a spectacular level, worse than 178 other currencies, including those of Iraq, Afghanistan, and Somalia which didn't have a government for years. Even Turkey, which tried to fight inflation by lowering the interest rate instead of raising it as usual, isn't nearing hyperinflation yet, at 84% on a yearly basis in November.