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I'd really like to point out this: > Hyperinflation is so incredibly destructive that you’d think macroeconomists would spend a lot of time studying the phenom
by rubyn00bie 6y ago
I'd really like to point out this:
> Hyperinflation is so incredibly destructive that you’d think macroeconomists would spend a lot of time studying the phenomenon, figuring out when and why it happens. Especially because the answer to the question of hyperinflation is also the answer to the question of how much the government can borrow. An understanding of hyperinflation would give us a flashlight to shine down the infinite corridor, so we could avoid the pit.
... is pretty ignorant. You have an unrealistic fear of hyperinflation propagated by your ideals; to the point, you think it's important or relevant in situations where it's not. Perhaps, and this is just a thought here, if no one educated on the matter seems to give a shit about it there might be a reason. The US deficit is by and large a bogey-man most people love to wax on but hate to learn about... unless you like the scientific method but even then it is mostly depressing.
To me, the whole things sounds like a rant telling physicists, "you haven't studied enough planets like Jupiter, and without Jupiter, I cannot explain Earth. Please explain Jupiter!"
Here's the real shit, that's boring, but true:
Hyperinflation is no risk to the US economy at present. We are the world's piggy-bank, the wealthiest piggies in the world love the US, because we're the only nation on the planet who has always let's them have it back. The USA has never frozen the dollar. This puts the US an unbelievable economic advantage that nearly all of its citizens fail to realize.
Think about it:
1. The US dollar is the defacto (for now) global currency.
2. It's really hard to default when your debt is in your own currency. See link below:
https://finance.yahoo.com/news/warren-buffett-explains-the-simple-reason-why-the-us-will-never-default-on-its-debt-185105213.html https://finance.yahoo.com/news/warren-buffett-explains-the-s...
The USA can quite literally print money and get away with it almost indefinitely. Yep, that's the rub. We can 100% print money.
Nope, instead of printing it [1] to invest in our infrastructure, citizens, and planet we share-- we piss it away. We piss it away handing out tax cuts to the rich. We piss it away blowing shit up in deserts fighting other nation's equivalent of rednecks. We piss it away funding racist police and prison systems. We piss it away every day; that's why it's called the "trickle down."
In another 50 or a 100 years, when other nations are financially larger, more stable, and many, many, trillions of dollars of risk could be safely diversified anywhere else... then yes, the US could be at risk because it may not be able to issue debt in its own currency.
[1] Most everyone doesn't understand extremely large numbers and when one looks at the quantities over a certain size they all muddle together. It takes a lot of effort and reading to be able to look at billions, hundreds of billions, and trillions to make sense of and not fear those numbers. That's why people are able to fear things that would literally help them; the numbers are "all the same to them" and thus they're all equally bad or misunderstood.
- mr_toad 6y ago> It's really hard to default when your debt is in your own currency. That’s true, but it misses the point because printing money is debasing your currency, not defaulting on debt. And if it’s true that borrowing $x billion and printing money can be done without consequences ‘almost indefinitely’, then why stop at x? Why not 2x, or 10x, or 1000x?
- epistasis 6y agoI think that is the point though, that the very worst that can possibly happen is hyperinflation. Why not stop at 1000x? That's the entire point of the article, we don't know the situations that set off currency debasement well enough. We all assume that there will at least be some period of normal inflation first, before we get to hyperinflation though. When we have become the global currency, there is also great risk when we do not have enough dollars and treasury bills out there. Because the world's savings are pretty much equivalent to our "debt." As there is more wealth in the world and as more of that wealth is held in US dollars or in US T-bills, if we do not continue to deficit spend, or somehow get more money supply, there are other risks too.
- rubyn00bie 6y ago> That’s true, but it misses the point because printing money is debasing your currency, not defaulting on debt. > And if it’s true that borrowing $x billion and printing money can be done without consequences ‘almost indefinitely’, then why stop at x? Why not 2x, or 10x, or 1000x? That's my whole fucking point. For America, right now, we pretty much can. And if we chose to invest it in ourselves instead of subsidising rich fuckos we'd surely see a positive return on our investment even (thereby paying it off). sigh There's literally no place worse on the internet for Economics than HN. I should just delete this fucking account.