Report Can Someone Explain How A No Crash Scenario Works? in House prices and the economy Posted April 11, 2007 Hyperinflation would cause asset prices to keep on rising. However those with mortgages will be crushed as interest rates would rise to try and abate it. Which is why hyperinflation is a red herring. Why do people keep mentioning it? As you say interest rates will be raised as necessary to combat inflation. This may have other effects but these are deemed preferable to inflating ourselves completely out of the ability to sell goods and services abroad. Mentioning hyperinflation - hysteria. We've had 15 years of relatively benign interest rates and inflation. There is SOME inflationary pressure in the economy at the moment - largely energy and government spending caused - but it is being (to some extent) dealt with by rising interest rates. If inflation is deemed at some point in the future to be under control they will come down again. Strikes me the crashsayers on here are now relying on some sort of financial armageddon to trigger the crash. Whilst accepting the growth in money supply is unhealthy, that real inflation is higher than the published figures and that an economy based on consumer borrowing cannot continue forever - nonetheless - the endless forecasts of imminent meltdown on here are pure hysteria. I see the FTSE has recovered from its little slip recently. I see a housing market that is still shuffling along okay. There's not much to see really - certainly no hyperinflation.