Inflation Falls To 4.2% – Where’s The Hyperinflation, Then?
The main cause of hyperinflation is a massive and rapid increase in the amount of money which is not supported by growth in the output of goods and services. The UK Column has been warning for a number of years now that we are staring hyperinflation in the face. So where is it?
Article | January 17, 2012 – 1:53pm | By Mike Robinson
It’s there in the half trillion Euros pumped into an already dead European financial system at Christmas by the European Central Bank. It’s there in the half trillion Euros that the ECB is going to pump in next month. It’s there in the trillions upon trillions of dollars pumped into the system by the Fed, and the hundreds of billions of pounds pumped into system by the Bank of England.
All this money printing is supposed to be increasing the availability of credit. Except it isn’t. The bankrupt Inter-Alpha Group banks are hoarding it – in Europe to the tune of over €500 billion. The banks are in a blind panic, hanging onto every penny they can get their grubby mits on. It’s that fact alone which has created a temporary downward pressure on prices.
As a result of that downward pressure, the real economy is grinding to a halt.
Britain has “slipped into recession”, we’re told. What a joke that is, as a quick walk along any of our high streets will demonstrate. For a consumer society, we are becoming extremely lacking in anything to consume, as our high streets become increasing devoid of any actual shops. Those that exist are trying to drum up a few crumbs of business with 70% discounts. Is this sustainable?
And here’s the danger. The hyperinflation is there, now. It has been there since before this bailout process began.
In fact, we are in the final stage just before it kicks us all in the face. The “consumer price index”, that bastion of lies, is falling, mostly because of energy price falls as a result of fluctuations in the commodities markets, and all those 70% off signs. The sustained, heavy, downward pressure on prices in the high street is having a direct effect – shops are closing.
What happens when they have all closed, and all we are left with is a couple of major supermarket chains? What will be the effect of the lack of competition? What will happen when all the distribution companies have closed down because there are no shops to distribute to? What will happen when the manufacturers can no longer afford to pay even their child labour costs? What will happen when all this is combined with a collapse of confidence in national, or, at least initially, one particular international currency?
Prices are going rise, significantly, soon, as the supply and demand equation kicks in. Another link in the systemic collapse chain will have been forged. Once that upward price pressure has begun, it will be unstoppable.
Could this be why China is willing to take the risk of handing its currency over to the City of London in an effort to turn it into a reserve currency? Perhaps, sitting on over three trillion dollars in foreign reserves, China feels it has nothing left to lose?
GoldMoneyNews on 30 Oct 2011
Subscribe to our newsletter at http://www.goldmoney.com/goldresearch. Historian Adam Fergusson discusses his cult-classic history of the Weimar hyperinflation, When Money Dies, with James Turk from the GoldMoney Foundation. They discuss the fateful decisions that led to hyperinflation in post-First World War Germany, and how central bankers as well as ordinary members of the public today would be well advised to heed this warning from history.
Fergusson discusses how the hyperinflation affected different groups in German society in different ways — with debtors benefitting and huge numbers of middle-class savers wiped out. Riots, corruption and political extremism were just some of the malignancies encouraged by the hyperinflation. He points out that those who held hard currencies as well as people who held tangible assets like gold and silver were in-large part protected from the worst economic consequences of the hyperinflation. In his words: “gold remained at all times in Germany the measure of what was important to them.”
James and Adam discuss whether or not today there is any way for governments in the developed world to repay their huge debts. Both men conclude that inflation is the only politically viable method of repudiating these unmanageable obligations. Fergusson highlights the importance of velocity and the demand for money in determining whether or not inflation turns into hyperinflation — though points out that this tipping point can take a surprisingly long-time to arrive; in Germany, people kept confidence with the rapidly devaluing mark throughout the First World War, despite clear signs that the country was heading for a currency crisis.
Fergusson thinks that we are heading for high inflation in many countries, but is doubtful that Weimar Germany’s nightmare currency collapse can be replicated in a sophisticated modern economy. He concludes with a quote from Jean-Claude Juncker, prime minister of Luxembourg, who recently commented with respect of the sovereign debt crisis: “we all know what has to be done; what we don’t know is how to get re-elected once we done it.”
It is not fair to say that “Hitler promised order” (@29:59), without at least mentioning that he delivered on that promise. Especially considering the betrayals of Democrats and Republicans in American history.
So could it not be argued that Democracy and Republicanism ARE associated with financial, social and political disorder (@29:45)?
redcorona14 2 months ago 4
KICK OUR PRIVATE BANKERS-SAVE BILLIONS EACH YEAR IN USARY PAID TO THEM!