Page 2 of 2 FirstFirst 12
Results 21 to 27 of 27

Thread: HyperInflation Revisited

  1. #21
    Join Date
    Mar 2007
    Location
    A Farm in Tennessee
    Posts
    1,642

    Default Re: Bernholz on USD

    Thanks for the article link.

    Here's a link to Bernholz's book -- .pdf format.
    It can be downloaded for free.

    http://www.goldonomic.com/Monetary_r..._inflation.pdf
    raja
    Boycott Big Banks • Vote Out Incumbents

  2. #22
    Join Date
    Dec 2008
    Location
    Tennessee
    Posts
    1,852

    Default Re: Germany after world war I.

    Quote Originally Posted by raja View Post
    Vince Cate says: "Many people dismiss the German hyperinflation, saying it was caused by war reparations and we don't have those. However, war reparations were only 11.8% of the German governments budget in 1921."

    http://pair.offshore.ai/38yearcycle/
    You are overlooking all of the other things I listed. Reparations were not the only thing. Germany lost a lot due to the Treaty of Versailles and it was very marginalized by it. Germany lost significant amounts of territory, its overseas colonies, its most industrious areas were occupied, it was blockaded, and all the other things I said. Weimar Germany and the USA are not alike. Not even remotely.
    Last edited by BadJuju; 12-31-12 at 05:41 PM.

  3. #23
    jabberwocky Guest

    Default Re: Germany after world war I.

    Bresciani-Turoni discusses this book, and concludes that reparations were not the critical factor leading to the hyperinflation. His brief, but poignant description of the societal effects of the monetary debauch is haunting, and, it seems to me, vaguely analagous to that of today.

  4. #24
    Join Date
    Mar 2007
    Location
    A Farm in Tennessee
    Posts
    1,642

    Default Re: HyperInflation Revisited

    Quote Originally Posted by Polish_Silver View Post
    Thanks for the link.
    I re-read the whole thread.
    This post by Fred jumped out:
    Imposition of taxes is the usual method.
    For example:
    Problem: Capital flight into gold
    Government response: Tax gold sales at 80%


    This agrees with Rickards prediction of 90% windfall profits tax on gold.

    There are a lot of people counting on gold to be their savior . . . .

    My thought is that if there is hyperinflation, it's best to have gold to trade on the black market.

    Vince Cate says: "People start to use a foreign currency or gold as store of value, even though government may forbid it. The black market starts in currency exchange."

    And, "At this point the government has some hard choices if it is not going to fail. It needs to do something so that the "black market" is legalized and taxable and deficits are nearly eliminated. It could just legalize a foreign currency or gold. But then it would forever give up on collecting any "inflation tax". It could get rid of budget deficits and stop printing money. However, people will still fear that it could start again at any time and so be hesitant to use that money. I think the most frequent end to hyperinflation is by making a new fiat money but with enough governmental changes that deficits and inflation are under control and people will use the new money. If they switch to a new currency then old money is no longer used as a store of value, or unit of account, or even for transactions. It has died."
    http://pair.offshore.ai/38yearcycle/
    raja
    Boycott Big Banks • Vote Out Incumbents

  5. #25
    Join Date
    Mar 2007
    Location
    A Farm in Tennessee
    Posts
    1,642

    Default Re: Bernholz on USD

    Quote Originally Posted by Polish_Silver View Post
    EJ's argument is that reserve currencies are invulnerable to hyperinflation. However, EJ has also said that USD is losing status as reserve currency. So, if USD is not international reserve currency, we have:
    Being the reserve currency, the US can print up free money anytime it wants.

    But there is a limit.
    I think many of the countries of the world will get tired the US free lunch.

    Of course others, like Saudi Arabia, will support the US because in return they get the US's military power guaranteeing their continuation in power.
    raja
    Boycott Big Banks • Vote Out Incumbents

  6. #26
    Join Date
    Mar 2008
    Location
    Mexico City
    Posts
    256

    Default Re: HyperInflation Revisited

    To show how the money evolves in a rampant inflation period and the way the cone is modified I'm focusing on one of the longest lived denominations of the past century that appeared as something as strange as the Woodrow Wilson bill and evolved into nothingless.

    In 1943, the Bank of Mexico first emitted the American Bank Note produced MXP 10,000 note. It was very rarely used and the common people rarely saw it in its first emission. Even it was one of the main subjects of a mexican movie from 1963 "El Hombre de Papel". By 1978 inflation had accumulated to the point that it was placed again into circulation. It was the epoch when I knew it first hand. Later it was replaced with the Banxico made Lazaro Cárdenas variation. Later inflation made the cost of producing it quite high and the watermark was retired and the design modified in 1987. At the revaluation it was again modified and then replaced before dumped because of its low value.

    Now another example, but in metallic, that is more difficult to replace, same initial condition. That was what I was referring to as coinage cone.

    The largest circulating gold coin emitted by the Mexican Mint in the past century is, without a doubt, the "Centenario", emitted first in 1921 with a face value of 50 MXP. It has remained as one of the standards of bullion coinage up to present, but it was pushed out of circulation (Gresham Law) by the beginning of WWII. A 50 MXP coin was not emitted until the Copper-Nickel "Coyolxauqui" was emitted in 1982, but it didn't last long. In 1984 it was replaced by the smaller "Benito Juarez". That also was replaced from Copper-Nickel to Stainless Steel in 1988. At the revaluation of 1992, it was equivalent to the new MXN 5c coin that was dumped before the end of last century due to its low value.

    It's worth noting that according to mexican monetary law, all coined precious metal (gold, silver, platinum or palladium) is seen by authority as per its precious metal market value when it is larger than the face value.

    Attention: Electronics Engineer Learning Economics.

  7. #27

    Default Re: HyperInflation Revisited

    Thanks a lot for the post, I simply love Professor Fekete!

    Will print this out fast and read thoroughly!

Similar Threads

  1. Replies: 40
    Last Post: 02-27-09, 01:37 PM

Bookmarks

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
Opinions expressed herein are those of the posters, not those of iTulip, Inc., its owners, or management. All material posted on this board becomes the intellectual property of the poster and iTulip, Inc., and may not be reposted in full on another website without the express written permission of iTulip, Inc. By exception, the original registered iTulip member who authored a post may repost his or her own material on other sites. Permission is hereby granted to repost brief excerpts of material from this forum on other websites provided that attribution and a link to the source is included with the reposted material.

Nothing on this website is intended or should be construed as investment advice. It is intended to be used for informational and entertainment purposes only. We reserve the right to make changes, including change in price, content, description, terms, etc. at any time without notice. By using this board you agree that you understand the risks of trading, and are solely responsible for your own investment and trading decisions. Read full legal disclaimer.

Journalists are not permitted to contact iTulip members through this forum's email and personal messaging services without written permission from iTulip, Inc. Requests for permission may be made via Contact Us.

Objectionable posts may be reported to the board administrators via Contact Us.

-->