4 ms·

> "Printing money and putting in into circulation has historically caused hyperinflation. Money is just a proxy for goods and services and without a gold standa

> "Printing money and putting in into circulation has historically caused hyperinflation. Money is just a proxy for goods and services and without a gold standard it's nothing more than paper. Germans were burning and wallpapering with Marks in 1922 and 1923 because of the printing of money." Hyperinflation in Germany was caused by a mix of high economic penalties post WW1 and reckless actions by private banks and investors. It's a common misconception that the hyperinflation was the fault of the government printing too much money, but that doesn't get at the underlying causes. Would recommend taking a look through this, though you don't need to read to the end, as the article also covers the actions taken after hyperinflation started. http://www.wintersonnenwende.com/scriptorium/english/archives/articles/hyperinflation-e.html http://www.wintersonnenwende.com/scriptorium/english/archive... > "My opinion is that there would be runaway inflation if you ended up with a situation where people had the option to drop out of the workforce funded by printed paper money." You get around this by having debt-free money, which removes one of the key demands on money, the demand that it should be directed towards economic growth.

lujim 11y ago
> Hyperinflation in Germany was caused by a mix of high economic penalties post WW1 and reckless actions by private banks and investors. It's a common misconception that the hyperinflation was the fault of the government printing too much money, but that doesn't get at the underlying causes. I agree to some degree. Germany was forced to pay reparations with goods such as coal. However, I've never seen it disputed that money printing causes hyperinflation. Sorry for the Wikipedia quote but I'm doing it... "Hyperinflations are usually caused by large persistent government deficits financed primarily by money creation (rather than taxation or borrowing)" In short you can't create value out of thin air. QE is a tool to keep credit flowing, but I guarantee you have never personally touched a dollar printed for the purpose of QE. If you have you were in a bank vault.
- ZenoArrow 11y ago
  "However, I've never seen it disputed that money printing causes hyperinflation." It can be caused by that, but you have to question what would cause a government to keep printing money when it became clear that inflation was too high? With the example of German hyperinflation, printing/creating money wasn't the cause of hyperinflation, it was a symptom that resulted from forces in the German economy, specifically high demands from foreign countries as repayment for WW1 (even though it's debatable whether Germany really caused the war or were pushed into it by Britain, and I say this as someone from Britain) and recklessness on the part of private banks and investors. The German government didn't drive the country into hyperinflation. It's worth noting that even the German central bank was privately owned and run at the time, so all the money printing was happening in the private sector. I'd be happy to explore an example of when a government created hyperinflation, are there any examples you know of?
  - lujim 11y ago
    Austria 1922, China 1943, France 1795, Hungary 1923 and 1945, North Korea 2009, Philippines 1944, Singapore 1942, Yugoslavia 1989, Zimbabwe 2000ish (89,700,000,000,000,000,000,000%) in mid-November 2008

lujim 11y ago

> Hyperinflation in Germany was caused by a mix of high economic penalties post WW1 and reckless actions by private banks and investors. It's a common misconception that the hyperinflation was the fault of the government printing too much money, but that doesn't get at the underlying causes. I agree to some degree. Germany was forced to pay reparations with goods such as coal. However, I've never seen it disputed that money printing causes hyperinflation. Sorry for the Wikipedia quote but I'm doing it... "Hyperinflations are usually caused by large persistent government deficits financed primarily by money creation (rather than taxation or borrowing)" In short you can't create value out of thin air. QE is a tool to keep credit flowing, but I guarantee you have never personally touched a dollar printed for the purpose of QE. If you have you were in a bank vault.

ZenoArrow 11y ago
"However, I've never seen it disputed that money printing causes hyperinflation." It can be caused by that, but you have to question what would cause a government to keep printing money when it became clear that inflation was too high? With the example of German hyperinflation, printing/creating money wasn't the cause of hyperinflation, it was a symptom that resulted from forces in the German economy, specifically high demands from foreign countries as repayment for WW1 (even though it's debatable whether Germany really caused the war or were pushed into it by Britain, and I say this as someone from Britain) and recklessness on the part of private banks and investors. The German government didn't drive the country into hyperinflation. It's worth noting that even the German central bank was privately owned and run at the time, so all the money printing was happening in the private sector. I'd be happy to explore an example of when a government created hyperinflation, are there any examples you know of?
- lujim 11y ago
  Austria 1922, China 1943, France 1795, Hungary 1923 and 1945, North Korea 2009, Philippines 1944, Singapore 1942, Yugoslavia 1989, Zimbabwe 2000ish (89,700,000,000,000,000,000,000%) in mid-November 2008