Hyperinflation

It seems as if our government is following the manual "Causing Hyperinflation for Dummies" that requires huge government debt, printing money, and an immobilizing fear of repercussions to government actions (no one wants to get blamed and no one wants to cause a recession/depression). All these actions are a path the US government is clearly following.

Here is a summary of an article from Economicshelp.org:

So What is hyperinflation? It is very basically unchecked out of control inflation.

Examples:

Germany, 1922-1923 -- During the hyperinflation episode in Germany from 1922 to 1923, the Weimar Republic printed postage stamps with a face value of one billion marks, as prices doubled every two days. At one point in 1923, the exchange rate equalled one trillion Marks to one dollar

Yugoslavia 1993-1995 -- prices increased by 5 quadrillion per cent


What Causes Hyper Inflation?

Usually, countries with hyper inflation have the following features:

-Large government debt, usually over 100% of GDP. (Henry Paulson, by the way, is asking for an increase in the legal ceiling on federal debt to $11.3 trillion or 70% of GDP.)

-Printing Money. To cope with meeting the debt, the government starts printing money. This decreases the value of existing money creating a multiplier effect where people lose confidence in money and keep demanding wage increases.

-Reluctance / inability to deal with it. When Germany experienced hyperinflation in the 1920s it was not a phenomena they fully appreciated or understood. Their primary fear at the time was unemployment. They feared that unemployment could precipitate a Communist Revolution so they didn't want to do anything to reduce demand and possibly cause a recession.

Lack of Confidence in the Finance Sector

The experience of inflation can become engraved on people's mind making them suspicious of financers, bankers and the general economic system. It is no coincidence the Nazi party were able to feed off these suspicions to introduce extremist policies.

I write about this because it will have a great impact on our way of life as Americans. It will impact your ability to borrow money, to purchase anything due to higher cost of goods, etc. That means be prepared now with tangible goods. Gold will not feed you. Silver will not feed you. Just like having an emergency kit for a natural disaster, have an emergency stock for an economic emergency. If the fool says it could never happen then Murphy's Law says it will happen! Those who laugh now will laugh last when it happens I think. Katrina could never happen, 9/11 could never happen and they have. I'm just sayin'-ya' know?! :)

Here is the link to the above summary of an informative article describing hyperinflation in greater detail:

http://www.economicshelp.org/2008/04/hyperinflation-causes-costs-and.html