Hyperinflation- Good or Bad?

The_Honeybadger

I have read some reports lately that state that the USA is braced for hyperinflation by year end. I never studied economics (wish I had), if this were to happen in Europe what are the implications for Ireland? My immediate thoughts are that it may inflate some of our debt away, surely a good thing, but I'm guessing it is not that simple. Anybody got any thoughts on whether this is likely to happen and what would the implications here be?

ei.sdraob

Not gonna happen in Europe not with Germany at helm (they had their hyperinflation)

maybe UK tho...

I actually been a lot to a country in 90s (exUSSR) and Russia when they had their run of hyperinflation and defaults, it wasnt pretty

One day for example the bread in shop cost X "rubble", next day it was X*2, no joke! crazy stuff
what happened then is everyone was using US$ and a huge black market developed

oh and there was no metal coins only metal coins that kept their value where the metro tokens!

Permabear

This post has been deleted.

The_Honeybadger

LOL thanks for the pic, I guess I was talking more along the lines of abnormally high inflation, not the type of thing that obviously goes on in extreme cases, for example 10%+ across the EU for two years. Are we not likely to see at least some due to the "quantitive easing" that has been applied since the recession kicked in.

ei.sdraob

mickeyk wrote: »

LOL thanks for the pic, I guess I was talking more along the lines of abnormally high inflation, not the type of thing that obviously goes on in extreme cases, for example 10%+ across the EU for two years. Are we not likely to see at least some due to the "quantitive easing" that has been applied since the recession kicked in.

Keep an eye on UK
its like over 4% now (not sure of its per month? cause that be fairly hi yoy then)
they went crazy on QE, the ECB hasnt on the other hand

and of Greece does default, that would make the euro stronger again


basically you think that by printing the West can get out of the debt hole, only if it was that easy

Nody

ei.sdraob wrote: »

basically you think that by printing the West can get out of the debt hole, only if it was that easy

Well you can but only by doing a one of payment and never borrowing again (i.e. US could print up enough dollars to pay of every existing loan but they would have all kind of issues to raise a new loan in USD for the next decade or two by doing so). This of course don't take into account the instant devaluation for the population in general etc. (i.e. Zimbawe where you pay 50 Million for a bus ticket on Monday and 100 Million by the end of the week for the same ticket).

ei.sdraob

Nody wrote: »

Well you can but only by doing a one of payment and never borrowing again (i.e. US could print up enough dollars to pay of every existing loan but they would have all kind of issues to raise a new loan in USD for the next decade or two by doing so). This of course don't take into account the instant devaluation for the population in general etc. (i.e. Zimbawe where you pay 50 Million for a bus ticket on Monday and 100 Million by the end of the week for the same ticket).

US could default just so to avoid paying back the debt (certainly a popular option of walking away from debt, that is regularly practised in the country),
maybe they will eventually,
they've gone past the point of ever having a hope of repaying their debt (they owe us Irish 1% btw )

it would be interesting, maybe UK and US would agree to default at same time, leaving China and EU holding the can in amazement

could trigger a war, then again they still have the bigger guns so...

cson

ei.sdraob wrote: »

it would be interesting, maybe UK and US would agree to default at same time, leaving China and EU holding the can in amazement

Could you imagine! :eek:

ei.sdraob

@OP

Fed chairman Ben Bernanke sat before the Joint Economic Committee, which asked him point blank about inflating away debt. His answer gets to the heart of the matter: "Given the structure of our debt, [inflation] wouldn't even help reduce the debt ... given that so many of our obligations are indexed."

http://www.fool.com/investing/general/2010/04/16/why-the-us-cant-inflate-its-way-out-of-debt.aspx

There goes that plan

peasant

T'would be kinda handy though ...just hand out a few of those and be done with it



that's a long scale Billion btw ...1000 of those that we now call "billion"

Here's 200 billion of the kind that buys you NAMA or Anglo

Flamed Diving

Why is 10% inflation = hyperinflation?