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0 pointsmarcosdumay10y ago0 comments

You simply can not have hyperinflation without the government printing money. In normal situations, there's not enough money to keep an economy running after a 1000 times increase on the prices level.

Now, if you are arguing that the government started printing money because the energy crisis destroyed its budget, then yes, the energy crisis caused the printing of money, that caused the hyperinflation. Thus, in some indirect sense, the energy crisis caused the hyperinflation.

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crdoconnor10y ago

This idea of Milton Friedman's that "inflation is always and everywhere a monetary phenomenon" needs to die already. It's wrong in every possible sense.

AnimalMuppet10y ago

You want to present some evidence for that claim? Some alternate ideas? Some argument on why Friedman's claim is wrong? Something besides just a contemptuous dismissal?

crdoconnor10y ago

The evidence is staring you in the face. Brazil's hyperinflation in the 70s was triggered by a supply shock that had nothing to do with their money supply.

Zimbabwe was similar, in that they destroyed their agricultural sector but continued to buy food.

If you keep the level of money printing and spending the same but your ability to produce goods and services is suddenly hit, you will experience inflation.

If that inflation reaches a trigger point, it will start to feed upon itself in a positive feedback loop, causing what we know of as hyperinflation.

meira10y ago

Reduce income inequality and promote social rise creates inflation, too. In the past you could pay someone R$300/month and have her cleaning your home everyday. Now the same value doesn't pay one week. Inflation to the riches, better work for the poors.

Controlled inflation == growth.

koolkat10y ago

I think you miss understood him. Money is just like any good subject to suply and demand. So if a country produces goods that they sell only in their national currency the more you produce of this goods the more demand there is for your money. So imagine there is a fixed quantity of money and a certain level on demand based on the quantity of the wealth produced. If suddenly you stop producing this goods then demand for your currency sinks. If this happens what you are left with is inflation. And all of this without the need to create money. For example the us prints masive amounts of money and they can do so because of the Bretton Woods system. Because the dollar is the international currency they print based on demand for their money that commes from goods produced all around the world by many countries. So it also depends on the power the nation has to oblige others to use their money.

marcosdumayOP10y ago

Hyperinflation is a completely different game. Your explanation also does not cut it, because a country's GDP simply does not reduce 1000 times in a month, month after month for years. You can not have it if your government isn't printing money like mad.

Also, no the 4 QEs of the US since 2008 weren't not nearly enough to create hyperinflation. They are not even growing exponentially.

crdoconnor10y ago

>a country's GDP simply does not reduce 1000 times in a month, month after month for years. You can not have it if your government isn't printing money like mad.

Yes, but the trigger almost never a government that goes insane and decides to print money like mad. The money printing is ramped up in an attempt to maintain the same level of spending in response to a supply shock.

>Also, no the 4 QEs of the US since 2008 weren't not nearly enough to create hyperinflation.

QE actually causes retail deflation. Which is counter-intuitive, I know.

(the reason is that money printing doesn't cause inflation - spending does, and QE actually reduces spending in non-investment products)

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crdoconnor10y ago

This idea of Milton Friedman's that "inflation is always and everywhere a monetary phenomenon" needs to die already. It's wrong in every possible sense.

AnimalMuppet10y ago

You want to present some evidence for that claim? Some alternate ideas? Some argument on why Friedman's claim is wrong? Something besides just a contemptuous dismissal?

crdoconnor10y ago

The evidence is staring you in the face. Brazil's hyperinflation in the 70s was triggered by a supply shock that had nothing to do with their money supply.

Zimbabwe was similar, in that they destroyed their agricultural sector but continued to buy food.

If you keep the level of money printing and spending the same but your ability to produce goods and services is suddenly hit, you will experience inflation.

If that inflation reaches a trigger point, it will start to feed upon itself in a positive feedback loop, causing what we know of as hyperinflation.

meira10y ago

Controlled inflation == growth.

koolkat10y ago

marcosdumayOP10y ago

Also, no the 4 QEs of the US since 2008 weren't not nearly enough to create hyperinflation. They are not even growing exponentially.

crdoconnor10y ago

>a country's GDP simply does not reduce 1000 times in a month, month after month for years. You can not have it if your government isn't printing money like mad.

>Also, no the 4 QEs of the US since 2008 weren't not nearly enough to create hyperinflation.

QE actually causes retail deflation. Which is counter-intuitive, I know.

(the reason is that money printing doesn't cause inflation - spending does, and QE actually reduces spending in non-investment products)

j / k navigate · click thread line to collapse