3 ms·
Hyperinflation has always been caused by a deficit of production. The 1rst cause of this is the reapeated lack of investment in productive industries. I'm not t
by orwin 6y ago
Hyperinflation has always been caused by a deficit of production. The 1rst cause of this is the reapeated lack of investment in productive industries. I'm not talking about services here, i'm talking about energy production and farming mainly. A drop in production always create inflation, printing money often create some inflation. Printing money while your production drop? Yeah, bad recipe.
- throw0101a 6y ago"Always" is a very strong statement. Generally, political collapses (often by losing wars) lead to currency collapses: * https://clintballinger.wordpress.com/2021/01/12/the-myth-of-hyperinflation/ https://clintballinger.wordpress.com/2021/01/12/the-myth-of-...
- panarky 6y agoThis exactly. People are so distracted by the gradual erosion of wealth caused by the magic money printer that they fail to appreciate the risk of rapid devaluation triggered by political and social disintegration. Check out what happened to the exchange value of the ruble after the collapse of the USSR, and that wasn't even caused by losing a war. The last two decades, and especially the last year, should be telling us that our political, financial, technological and social systems and supply chains have become brittle. I'd guess that the probability of a USSR-style collapse of one or more large western nations in the next five years is in the low double digits.