Comment by arcticbull
11 hours ago
Hyperinflation is not 6% inflation, it's not even "inflation but bigger."
Hyperinflation is better thought of as the rejection of a currency by the people, and it has historically always been associated with extreme exogenous factors like foreign-currency denominated debt, with war, civil war or rampant corruption.
The Weimar Republic had foreign-currency denominated debt, which famously you cannot satisfy with printing more domestic currency.
[edit] Here's a good write-up that aligns with my take.
[1] https://www.pragcap.com/hyperinflation-its-more-than-just-a-...
In 2023 my father was talking about how his grandfather talked about the inflation and the Weimar Republic. He talked about it how clearly in 2023 inflation was going to destroy the US as well.
My father is in his late 60s. He lived through the 70s. He saw double digit inflation. He saw price controls. All in his prime working years.
I don’t know where this leaves us. But it worries me when even those with memories to draw from don’t.
To be clear I'm not trying to say it will or won't happen, just that when people think hyperinflation, they think of a purely monetary phenomenon where inflation exceeds some threshold so it gets a "hyper-" prefix. I think it's worth thinking about the phenomenon more deeply when trying to pattern match because there's more to it. It's also something that's not super well understood since we don't have a ton of data points on it.
Would sure be nice to live in precedented times for a change.
Oh yes I agree. Not trying to downplay the recent inflation at all. More musing about how it’s interesting that we’re mostly looking back to events outside of the US when in reality we can look to the US for much of this. Which isn’t to say don’t look everywhere more that it feels like we have a blind spot that we shouldn’t have.
This is a bad article. The expert it quotes are all wrong in important ways. Mises who wrote at the time when lot of information wasn't actually available and is simply factually wrong.
Adam Fergusson is a controversial right wing economists. And the claim that its 'more a psychological event than a purely monetary event' can be made about many things. One could argue that an earthquake or anything else is 'more psychological'.
Factually speaking, its simply a monetary event. It doesn't matter what when and where, if you print money to the extend Wiemar did your gone get hyperinflation. Had France, Britain or the US done the same, it would have had the same effect.
Carl Melchior was a member of the German elite who had a completely wrong understanding of economics and his words should not be just accepted.
> made by huge German exports and these exports will ruin the trade in England and America
This is a fundamentally flawed statement. This is German elites still thinking in Zero-Sum terms. The idea that Britain and the US could never accept German as an exporting trading partner, is just false. And its also false that debt can only be paid back if you are a massive exporter.
Every modern economist who looks at this, concludes that Germany could have paid back the debt just fine. Its simply that the German elites didn't want to pay it. That the simple reality.
Hyperinflation happened because German elites preferred hyperinflation, economic chaos to paying back the debt.