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dnd

Hyperinflation - A Definition

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This is a quote from a Wikipedia definition of Hyperinflation - I kid you not....

http://en.wikipedia.org/wiki/Hyperinflatio...nd_the_currency

"Governments will often try to disguise the true rate of inflation through a variety of techniques. These can include the following:

- Outright lying as to official statistics such as money supply, inflation or reserves.

- Suppression of publication of money supply statistics, or inflation indices.

- Price and wage controls.

- Forced savings schemes, designed to suck up excess liquidity. These savings schemes may be described as pensions schemes, emergency funds, war funds, or similar.

- Adjusting the components of the Consumer Price Index, to remove those items whose prices are rising the fastest."

Hmm, let see....

Edited by dnd

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This is a quote from a Wikipedia definition of Hyperinflation - I kid you not....

http://en.wikipedia.org/wiki/Hyperinflatio...nd_the_currency

"Governments will often try to disguise the true rate of inflation through a variety of techniques. These can include the following:

- Outright lying as to official statistics such as money supply, inflation or reserves.

- Suppression of publication of money supply statistics, or inflation indices.

- Price and wage controls.

- Forced savings schemes, designed to suck up excess liquidity. These savings schemes may be described as pensions schemes, emergency funds, war funds, or similar.

- Adjusting the components of the Consumer Price Index, to remove those items whose prices are rising the fastest."

Hmm, let see....

Believe me, if we'd had hyperinflation in prices, but were increasing wages by about 3%, we would have noticed a long, long time ago.

Edited by Casual Observer

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Believe me, if we'd had hyperinflation in prices, but were increasing wages by about 3%, we would have noticed a long, long time ago.

Not saying we've reached it yet - just that the Govenment/BOE behaviour indicates a preference to move towards HIGHER real inflation...

Edited by dnd

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- Adjusting the components of the Consumer Price Index, to remove those items whose prices are rising the fastest."

dnd - have you been editing Wikipedia entries again? I've told you about that before... :ph34r:

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Not saying we've reached it yet - just that the Govenment/BOE behaviour indicates a preference to move towards HIGHER real inflation...

Do you think that would be a good thing? The reason I ask is that many posters point out how lucky my generation was to buy a house during a period of high inflation.

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dnd - have you been editing Wikipedia entries again? I've told you about that before... :ph34r:

Honest, guv, I never touched 'em

Why did you select that quote in particular? :lol:

Do you think that would be a good thing? The reason I ask is that many posters point out how lucky my generation was to buy a house during a period of high inflation.

Yep, but back then we had unions fighting our corner to make sure wages kept pace with inflation and IIRC immigration numbers were smaller

Edited by dnd

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Yep, but back then we had unions fighting our corner to make sure wages kept pace with inflation...

But if employers kept pay rises below the inflation in the price of the goods they sold, no-one would be able to afford them

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But if employers kept pay rises below the inflation in the price of the goods they sold, no-one would be able to afford them

Credit? - again, not as prevalant back then as it is now....

People are borrowing to bridge the gap between wages and prices - they just don't realise it - it's that subtle (I think we've been down this path before ;) )

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Believe me, if we'd had hyperinflation in prices, but were increasing wages by about 3%, we would have noticed a long, long time ago.

Well my wage goes up by about 3% per annum and I did notice quite a while ago how fast unavoidable basic living costs were rising. There has certainly been hyperinflation in gas, electricity, water rates and council tax for the last few years. Edited by Bingley Bloke

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Guest Alright Jack

I would describe hyperinflation as that point when the demand part of the equation begins to kick in. At this point, the money supply becomes irrelevant (and ultimately goes negative i.e deflation). Of course, the currency is effectively dead already.

Value of currency is dependent on its supply (inflation / deflation) and the demand for it. Once people turn over their cash immediately for tangible goods (demand falls off a cliff) it's all over. Deflation follows (people don't bother borrowing worthless money, creditors effectively write-off worthless debts and people burn notes for firewood)

Note that, inflation and deflation are mutually exclusive. Hyperinflation and deflation are not.

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Guest Alright Jack

IIRC M4 up 13% this year

Yes. We've been running double digits for ages now. It is interesting to note that the FED got embarrased enough to hide M3 at just 8%

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As a recent STR I start sh*tting myself whenever I see the word "hyperinflation". I'm not well-versed in economics but my understanding is that wage inflation would make my deposit in the bank progressively less valuable. If this occurs I would have been better off stretching myself to buy a house as the value of the debt would be decreasing rather than my deposit. Have I got that right, and is it a real risk? I certainly haven't been noticing any wage inflation in my office though.

Also, what happens to wage inflation in a "stagflation" scenario, please?

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As a recent STR I start sh*tting myself whenever I see the word "hyperinflation". I'm not well-versed in economics but my understanding is that wage inflation would make my deposit in the bank progressively less valuable. If this occurs I would have been better off stretching myself to buy a house as the value of the debt would be decreasing rather than my deposit. Have I got that right, and is it a real risk? I certainly haven't been noticing any wage inflation in my office though.

Also, what happens to wage inflation in a "stagflation" scenario, please?

Your money was probably better in property as real inflation (currently 10%+) is eating away at your cash

The only risk is if the BOE decides, unexpectedly, to raise IR sharply (macroeconomic event?) which would crash the housing market

Edited by dnd

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Guest Alright Jack

As a recent STR I start sh*tting myself whenever I see the word "hyperinflation". I'm not well-versed in economics but my understanding is that wage inflation would make my deposit in the bank progressively less valuable. If this occurs I would have been better off stretching myself to buy a house as the value of the debt would be decreasing rather than my deposit. Have I got that right, and is it a real risk? I certainly haven't been noticing any wage inflation in my office though.

Also, what happens to wage inflation in a "stagflation" scenario, please?

If you are not well versed in economics then that is to your credit, since you haven't been brainwashed by all this Keynsian / Socialist garbage. The outcome of this type of system is to make everyone equal, equally poor! Except for those that understand and use the system.

The system we live in now is doomed to fail one day. It is literally designed to. When that day will come is open to debate. Some, like myself belive it is only a few short years away. The dollar will collapse first and then the rest will follow it down.

Basically, we don't have money (we are NOT ALLOWED TO HAVE MONEY!), we have a worldwide system of CREDIT. (Money is gold and silver - always has been)

The only reason we use the credit system is because of legal tender laws (i.e threat of violence by government) to use the system. This is the basis of Aaron Russos new film: America, from Freedom to Fascism.

Now, because the banks create all the credit in the first place and demand interest payable on that, it is a game of musical chairs where there is never enough credit in the system at any one time to pay down all the debt and so, for the system to remain solvent, the credit must expand indefinately at an ever accelerating pace.

There are two choices, stop expanding the supply and let the system crash (effectively hyperinflation because who would hold a note that is in default?) or, contine until people realise their currency is being debased (despite hacking the official numbers and changing the definition of inflation and inventing ridiculous ideas like CPI, core rates and golden rules). Once people understand what is happening, they stop holding their cash and buy gold, silver, wheelbarrows, anything of value as soon as they acquire their money. At this point, the currency is doomed and after a few months of hyperinflation it is all over. the currency is dead and the middle classes are wiped out.

The system will then start over again.

I hope this helps a bit in getting started. I would recommed the following people for more info

Jim Puplava over at www.financialsense.com

www.goldmoney.com

www.dollarcollapse.com

www.silver-investor.com

www.mises.org (fantastic austrian economics learning site!)

There is so much out there now and it's getting pretty intense!

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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