John wrote:Vince, I don't know why I keep doing this, since the same argument keeps going around. Examples from previous centuries are irrelevant because the only form of money was physical money.
Last time your claim was that since the US dollar is the main world reserve currency it could not hyperinflate. Countries are working hard to "diversify their reserves" and work out trade that does not depend on the dollar. So this argument will not last forever.
Earlier in this thread your argument was that hyperinflation does not happen in the crisis period. But in America that seems to be exactly when it does happen. Oh well.
Now your argument is that since we keep track of money in computers and much of the money in the Fed computer is never even printed on paper, we can't have hyperinflation. You have bought into Bernanke's claim of "we are not printing money we do it on computers". Remember, anytime you agree with Bernanke, the odds are you are wrong. If you look at Argentina you will find that they too had computers and most of their money was on computers, but they still got hyperinflation. Computers don't prevent hyperinflation.
In fact, hyperinflation pre-dates paper money. England used tally sticks as money before paper money. The King made too many sticks and then they became worthless in 1671. It was not exactly the same as today's standard hyperinflation. The sticks were like bonds and like money, where today these are more separate. But really it is the same thing.
http://pair.offshore.ai/38yearcycle/#1671
The "this time is different" arguments are tricky. Every time is unique, so it is always true that this time is different. It can be hard to tell if the difference really changes things. Like maybe "doing it on computers" means we won't see wheelbarrows full of money or people burning money to stay warm, but is that the important part?
I say give it another round John. But get your arguments in before the hyperinflation starts or they will be already falsified by events.
[quote="John"]Vince, I don't know why I keep doing this, since the same argument keeps going around. Examples from previous centuries are irrelevant because the only form of money was physical money. [/quote]
Last time your claim was that since the US dollar is the main world reserve currency it could not hyperinflate. Countries are working hard to "diversify their reserves" and work out trade that does not depend on the dollar. So this argument will not last forever.
Earlier in this thread your argument was that hyperinflation does not happen in the crisis period. But in America that seems to be exactly when it does happen. Oh well.
Now your argument is that since we keep track of money in computers and much of the money in the Fed computer is never even printed on paper, we can't have hyperinflation. You have bought into Bernanke's claim of "we are not printing money we do it on computers". Remember, anytime you agree with Bernanke, the odds are you are wrong. If you look at Argentina you will find that they too had computers and most of their money was on computers, but they still got hyperinflation. Computers don't prevent hyperinflation.
In fact, hyperinflation pre-dates paper money. England used tally sticks as money before paper money. The King made too many sticks and then they became worthless in 1671. It was not exactly the same as today's standard hyperinflation. The sticks were like bonds and like money, where today these are more separate. But really it is the same thing.
http://pair.offshore.ai/38yearcycle/#1671
The "this time is different" arguments are tricky. Every time is unique, so it is always true that this time is different. It can be hard to tell if the difference really changes things. Like maybe "doing it on computers" means we won't see wheelbarrows full of money or people burning money to stay warm, but is that the important part?
I say give it another round John. But get your arguments in before the hyperinflation starts or they will be already falsified by events. :-)