Hyperinflation

[DeadFish]

Wanna hear a joke?
Zimbabwe replaced their dollar with American currency after their inflation crisis.

 

[Badungus Kabungus]

A system with several currencies - clearing dollar for corporations to settle their bills, interdollar for international trade and cryptodollar with an expiration date on it for wagies. This will allow them to fully implement MMT. Although, I expect this from some Eurozone countries first.

I saw that same scenario, but with a few minor changes. Each major corporation has its own crypto, tradable on the free market. Microsoft wagies get paid in Microsoft bucks, Apple wagies get paid in Apple bucks, etc. Due to that the wagies are incentivized to work harder and to promote their corporation even outside of work, as any increase to the value of their corp crypto will directly increase their buying power. Congratulations, you just turned regular wagies into 24/7 shill machines.

Also, who wants to bet it will be Estonia first?

 

[Car Won't Crank]

Wanna hear a joke?
Zimbabwe replaced their dollar with American currency after their inflation crisis.

Ecuador did the same thing upon the impending failure of the Sucre in the 90s. I believe they only use the USD now.

 

[General Tug Boat]

Doesnt the value of the dollar happen because people exchange for it in times of crisis, like when japan plateaued and japanese citizens bought dollars? If china or europe or wherever collapses the rich there won’t just let their money be stolen, they’ll buy dollars and put them in american banks or assets: a country that isn’t likely to collapse in the same way. So if people buy dollars at a similar rate that the dollar inflates, wont it be fine?

Typically that is the ideal scenario and dollars are still a safe haven compared to every other currency on the planet for sure. Though the problem is that when x number of dollars are generated in such a small amount of time, it's difficult for the other markets to catch up. Hence the surge in general every day prices.

It is an incremental process, but the trend lines always are sketchy. Foreign bond markets actually seem to be safer right now because how Yellen did not readjust interest rates. Bond treasuries are risky ATM, because of this assessment that the FED isn't going to deflate the printer brrrr.

It's like a pressure cooker, and the never ending flu season is an indicator of the problems we are facing in the financial sector. It won't be hyperinflated to the point of Weimar Republic, that is just an absurd scenerio in the scope of modern economics. Though, the incremental rise in being able to be a human is a real factor.

 

[Willie Thrills]

I saw that same scenario, but with a few minor changes. Each major corporation has its own crypto, tradable on the free market. Microsoft wagies get paid in Microsoft bucks, Apple wagies get paid in Apple bucks, etc. Due to that the wagies are incentivized to work harder and to promote their corporation even outside of work, as any increase to the value of their corp crypto will directly increase their buying power. Congratulations, you just turned regular wagies into 24/7 shill machines.

Also, who wants to bet it will be Estonia first?

What are the stakes? I'd say Iceland, Estonia has too many domestic issues around its Russian minority, and Iceland already has electricity to spare.

 

[Badungus Kabungus]

What are the stakes? I'd say Iceland, Estonia has too many domestic issues around its Russian minority, and Iceland already has electricity to spare.

Estonia (as unlikely as it sounds) is the place where the EU is doing all their digital ID/vaccine passports pilot projects. They already have a country-wide digital ID program that's been going on for a few years. https://e-estonia.com/solutions/e-identity/id-card/

How Estonia is Pioneering the Digital Identity Space

Currently, Estonia leads the digital identity frontier, primarily because of its highly-developed national ID card system.

medium.com

Right now Estonia is pretty much run by EU glowies. Interesting how their former president Toomas Ilves is currently involved with an IMF-linked global digital ID project called Everest ID.

 

[Cool Dog]

I have been unable to shake myself of the fear that because fiat currency is just an idea, and not actually based on anything tangible

Its based on the country that prints it, if theres confidence in that country's ability to not shit the bed then its worth something

 

[L50LasPak]

Its based on the country that prints it, if theres confidence in that country's ability to not shit the bed then its worth something

Evidently the powers that be have a lot more confidence than I do.

 

[Billy Beer]

I said in the Biden thread and I'll repeat it here, Hyper inflation has to happen if the 'Great Reset' is going to occur.

A rising tide of inflation drowns the working class and middle class, leaving them with very little choice but to grab any flotsam to keep a float.

If the govt/fed (who make the inflation) then offer to buy your house for ten times what you paid for it, during hard times, how many would say no?

You're happy and you own nothing.

 

[knobslobbin]

Evidently the powers that be have a lot more confidence than I do.

funny you should mention that, feds just put out a worrying report saying equities gonna shit the bed (probably) ruhroh

Fed Warns "Asset Prices Are Vulnerable To Large Declines" If Risk Appetite Falls | ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero

www.zerohedge.com

Equities gonna tank, commodies will soar. Couldn't possibly be related to unrestrained government spending (printing).

 

[CockPockets]

This thread has been haha funny dobson and tard fighting the whole time, now we need to veer off into an autistic niche for 10 pages for the Kiwifarms hat trick

 

[MarvinTheParanoidAndroid]

how many of you doomers even realize how money is "printed" into the economy

do you genuinely think the US mint just fires up the printer and gives the money to a bank chosen via throwing some darts? if that's the level you're on, this is over your head

You can feel free to explain it, unless it happens you don't know either.

 

[Rich Evans Apologist]

You can feel free to explain it, unless it happens you don't know either.

You can buy back bonds or you can buy debt. If you really want to pump the supply, you can buy back those securities at expediated valuation (ie, buying a 15-year bond for full value at 12-years) and you can buy up toxic debt. The government normally issues bonds to pull money out of the money supply - people and companies (as well as international entities) can pick them up.

To take an example, say you buy a $400 bond that'll be worth $500 in ten years. Anyone that buys the bond has given $400 to the fed, which they can choose to sit on to 'remove' it from the economy. When that bond is cashed for the full amount, the government is now putting $500 in -- on-net, they're putting $100 more into the economy. To make that money, they either have to issue more currency or sell more bonds - or take on loans. That naturally means you'll see a gradual, 'base' increase in the money supply over time with a fiat currency.

So when the government issues a bunch of currency, it buys back a bunch of existing securities / debt. Issuing currency doesn't necessarily involve printing it - you can print some of the stuff that you issue, sure, but that's not really the important part. It goes to banks just the same as changing values on their balance sheets.

There are other ways that the fed raises funds that involve interactions with overnight trading of debt between banks as well as the all-important interest rates, but that's the short of it. The government always has to issue new currency naturally by the very existence of bonds, as otherwise people would be parking money to lose money. This is fundamentally why discussing money 'printed' is pretty irrelevant, and the more interesting topic of concern is how all indicators of inflation responded to the 2011 bailouts, which saw $4tr in currency issued to pretty limited effect.

 

[MarvinTheParanoidAndroid]

You can buy back bonds or you can buy debt. If you really want to pump the supply, you can buy back those securities at expediated valuation (ie, buying a 15-year bond for full value at 12-years) and you can buy up toxic debt. The government normally issues bonds to pull money out of the money supply - people and companies (as well as international entities) can pick them up.

To take an example, say you buy a $400 bond that'll be worth $500 in ten years. Anyone that buys the bond has given $400 to the fed, which they can choose to sit on to 'remove' it from the economy. When that bond is cashed for the full amount, the government is now putting $500 in -- on-net, they're putting $100 more into the economy. To make that money, they either have to issue more currency or sell more bonds - or take on loans. That naturally means you'll see a gradual, 'base' increase in the money supply over time with a fiat currency.

So when the government issues a bunch of currency, it buys back a bunch of existing securities / debt. Issuing currency doesn't necessarily involve printing it - you can print some of the stuff that you issue, sure, but that's not really the important part. It goes to banks just the same as changing values on their balance sheets.

There are other ways that the fed raises funds that involve interactions with overnight trading of debt between banks as well as the all-important interest rates, but that's the short of it. The government always has to issue new currency naturally by the very existence of bonds, as otherwise people would be parking money to lose money. This is fundamentally why discussing money 'printed' is pretty irrelevant, and the more interesting topic of concern is how all indicators of inflation responded to the 2011 bailouts, which saw $4tr in currency issued to pretty limited effect.

So Covid has actually stimulated the economy more long term than it has damaged it? Otherwise, if people weren't panicked then they wouldn't be buying government bonds for a larger payoff later on.

It's a ton of money if you live with your parents and your expenses consist of ramen noodles, a purchase of a new video game once a quarter, and a pornhub subscription. The moment you get a family, some land, and a boat or a cottage, it's not that much money.

400K a year is a new house every year.

 

[knobslobbin]

This thread has been haha funny dobson and tard fighting the whole time, now we need to veer off into an autistic niche for 10 pages for the Kiwifarms hat trick

Any suggestions for an autistic niche? Are you thinking we should hyperfocus on how inflation might impact the price of comic books?

 

[plattschwanz]

Post war inflation in Germany was deliberatly made much worse by Hjalmar Schacht (same Guy who was behind Nazi economic ""Miracle"") in effort to get Entente back to negotiation table to get better deal on how much war reparations Germany needed to pay. This doesnt work because French needed that money to repay war loans to USA and restore devastated Northern France.

This is wrong, Schacht had nothing to do with that. Inflation started when Rudolf Havenstein was president of the Reichsbank, Schacht replaced him in November 1923 and put an end to hyperinflation by substituting the Papiermark with the Rentenmark. In his book, Schluss mit der Inflation from 1960, Schacht blamed the monetarisation of the reparation's induced debt for causing hyperinflation since its easy credit was utilized by speculators for naked shorting against the Papiermark.

 

[Rich Evans Apologist]

So Covid has actually stimulated the economy more long term than it has damaged it? Otherwise, if people weren't panicked then they wouldn't be buying government bonds for a larger payoff later on.

So it depends on the year-duration, yield, and interest rate at-time-of-purchase of the bond. One reason you might purchase a bond is essentially that the US government/fed is more trustworthy than a bank in the sense that it won't go under; this is almost entirely a consequence of the fact that the greenback is the standard of international currency. Private banks can take on entirely too much toxic debt and default, and your savings are at risk - even with the protections afforded to them after FDR and 2008. More importantly, corporate/business funds and savings are at risk if the banks have taken on a lot of toxic assets, since they might burn through a lot of liquid assets and leave you unable to get capital flow when you need it if they're low at the time. Holding a bond somewhat subverts this, since you can just convert them into capital when you need. In other countries this isn't as true, as the banks performing like shit usually means the government's credit rating and currency will begin to perform like shit.

Another thing is that bonds have different shelf lives, and the amount of bonds that people buy for different durations is generally something worth watching. Back in 2019, 5-year bonds were having a higher payout relative to the amount of time that you'd be parking your money for than were 10-year bonds, suggesting that people were worried about a recession/depression damaging the long-term value of currency (a combination of low interest rates and expectations of inflation). That ceased to be a concern in 2020, as we were unmistakably in a recession. But here's the interesting part:

It's very possible that Covid leads to an absolute explosion of economic output. In the long-run, recovery from the covid lockdowns coupling with the relative stabilization that Quantitative Easing in the form of stimulus and unemployment benefits provided could lead to a very, very bullish run. https://archive.md/gZ37U It's worth remembering that the roaring 20s came after WW1 and the Spanish Flu, so it isn't impossible to think that a wind-down of the Afghanistan war + Covid sees a similar explosion in the US in terms of economic output. However. unlike the boom and bust of the 20s, the very fact that QE is in use now alongside the levels of interwoven supply chains in our globalization makes a 1928 unlikely to occur again, even if market corrections / recessions are inevitable. At the current moment, contrary to expectations of long-run inflation and depression, there are many signs that the post-covid boom could be exceptional.

 

[YayLasagna]

Hi I tried reading this thread before some fishbrained dipshit vomited all over his keyboard and now I'm confused. Are we gonna have a bubble pop or is it just going to expand and then contract again?

 

[Rich Evans Apologist]

Hi I tried reading this thread before some fishbrained dipshit vomited all over his keyboard and now I'm confused. Are we gonna have a bubble pop or is it just going to expand and then contract again?

put all your money in silver stocks, it'll never come back to bite you

 

[MarvinTheParanoidAndroid]

So it depends on the year-duration, yield, and interest rate at-time-of-purchase of the bond. One reason you might purchase a bond is essentially that the US government/fed is more trustworthy than a bank in the sense that it won't go under; this is almost entirely a consequence of the fact that the greenback is the standard of international currency. Private banks can take on entirely too much toxic debt and default, and your savings are at risk - even with the protections afforded to them after FDR and 2008. More importantly, corporate/business funds and savings are at risk if the banks have taken on a lot of toxic assets, since they might burn through a lot of liquid assets and leave you unable to get capital flow when you need it if they're low at the time. Holding a bond somewhat subverts this, since you can just convert them into capital when you need. In other countries this isn't as true, as the banks performing like shit usually means the government's credit rating and currency will begin to perform like shit.

Another thing is that bonds have different shelf lives, and the amount of bonds that people buy for different durations is generally something worth watching. Back in 2019, 5-year bonds were having a higher payout relative to the amount of time that you'd be parking your money for than were 10-year bonds, suggesting that people were worried about a recession/depression damaging the long-term value of currency (a combination of low interest rates and expectations of inflation). That ceased to be a concern in 2020, as we were unmistakably in a recession. But here's the interesting part:

It's very possible that Covid leads to an absolute explosion of economic output. In the long-run, recovery from the covid lockdowns coupling with the relative stabilization that Quantitative Easing in the form of stimulus and unemployment benefits provided could lead to a very, very bullish run. https://archive.md/gZ37U It's worth remembering that the roaring 20s came after WW1 and the Spanish Flu, so it isn't impossible to think that a wind-down of the Afghanistan war + Covid sees a similar explosion in the US in terms of economic output. However. unlike the boom and bust of the 20s, the very fact that QE is in use now alongside the levels of interwoven supply chains in our globalization makes a 1928 unlikely to occur again, even if market corrections / recessions are inevitable. At the current moment, contrary to expectations of long-run inflation and depression, there are many signs that the post-covid boom could be exceptional.

You don't want a roaring 20's anyway because that was a prelude to the Great Depression, and the New Deal, like the Green New Deal would, actually prolonged it.