Ron Paul Has Saved Us From Hyperinflation

[sailingaway]

http://www.marketoracle.co.uk/Article30359.html

[sevin]

Thanks to the Ron Paul movement, if hyperinflation happens, everyone will know or at least find out exactly whose fault it is. We couldn't say that a few years ago.

[emazur]

I didn't like the article b/c it assumed that for hyperinflation to happen the Fed itself has to light the fuse. Later today I saw an article that addressed this:
http://www.economicpolicyjournal.com/2011/09/putting-hyper-inflation-cart-before.html

Finally, the big problem with North's scenario is the fact that the dollar is the world's reserve currency. Currently, as various crises pop up around the world, it is clear that the dollar is still respected as a safe haven (as evidenced by the low interest rates on Treasury securities and the flight to these securities during each crisis), but as Bernanke keeps the printing presses running, at some point the global attitude about the dollar could shift dramatically and every central banker that now hugs dollars could choose to ditch those dollars. It is likely that not even hell has a downward swirling slide comparable to the slide that the dollar will take, if the worlds bankers decide to shun the dollar. Such a shipping of dollars back to our shores could in itself cause a hyper-inflation that would be very hard for even a skilled Federal Reserve chairman to handle (and I don't think Bernanke is so skilled).

And of course, hyperinflation can be used intentionally as a weapon against the U.S., which Peter Schiff has pointed out:

http://www.youtube.com/watch?v=SUWSZeM2Vio

[Aratus]

audit the FED + end the FED

[sickmint79]

itulip has some good articles on hyperinflation. we don't nearly meet the historical criteria that others have hit. one of the main ones of course being that we have the world's reserve currency. not to say we won't get high or even double-digit inflation; but no hyperinflation.

[ctiger2]

Hyperinflation is a loss of confidence in a currency. There's plenty of Federal Reserve Notes floating around the world for it to happen. 75% of the Federal Reserve Notes are held outside the US. If foreigners lose confidence in holding them, they'll all come flooding back into this country and BAM, POW, SPLAT, it's over!

[sickmint79]

"In economics, hyperinflation is inflation that is very high or "out of control". While the real values of the specific economic items generally stay the same in terms of relatively stable foreign currencies, in hyperinflationary conditions the general price level within a specific economy increases rapidly as the functional or internal currency, as opposed to a foreign currency, loses its real value very quickly, normally at an accelerating rate.[1] Definitions used vary from one provided by the International Accounting Standards Board, which describes it as "a cumulative inflation rate over three years approaching 100% (26% per annum compounded for three years in a row)", to Cagan's (1956) "inflation exceeding 50% a month." [2] As a rule of thumb, normal monthly and annual low inflation and deflation are reported per month, while under hyperinflation the general price level could rise by 5 or 10% or even much more every day."

[heavenlyboy34]

Hyperinflation is a loss of confidence in a currency. There's plenty of Federal Reserve Notes floating around the world for it to happen. 75% of the Federal Reserve Notes are held outside the US. If foreigners lose confidence in holding them, they'll all come flooding back into this country and BAM, POW, SPLAT, it's over!
Kinda/sorta.

http://www.econlib.org/library/Enc/Hyperinflation.html
Hyperinflations are caused by extremely rapid growth in the supply (http://www.econlib.org/library/Enc/Supply.html) of “paper” money. They occur when the monetary and fiscal authorities of a nation regularly issue large quantities of money to pay for a large stream of government expenditures. In effect, inflation is a form of taxation (http://www.econlib.org/library/Enc/Taxation.html) in which the government gains at the expense of those who hold money while its value is declining. Hyperinflations are very large taxation schemes.
During the German hyperinflation the number of German marks in circulation increased by a factor of 7.32 × 109. In Hungary, the comparable increase in the money supply (http://www.econlib.org/library/Enc/MoneySupply.html) was 1.19 × 1025. These numbers are smaller than those given earlier for the growth in prices. What does it mean when prices increase more rapidly than the supply of money?
Economists use a concept called the “real quantity of money” to discuss what happens to people’s money-holding behavior when prices grow rapidly. The real quantity of money, sometimes called the “purchasing power of money,” is the ratio of the amount of money held to the price level. Imagine that the typical household consumes a certain bundle of goods. The real quantity of money measures the number of bundles a household could buy with the money it holds. In low-inflation periods, a household will maintain a high real money balance because it is convenient to do so. In high-inflation periods, a household will maintain a lower real money balance to avoid the inflation “tax.” They avoid the inflation tax by holding more of their wealth in the form of physical commodities. As they buy these commodities, prices rise higher and inflation increases. Figure 1 (http://www.econlib.org/library/Enc/Hyperinflation.html#lfHendersonCEE2-081_figure_027) shows real money balances and inflation for Germany from the beginning of 1919 until April 1923. The graph indicates that Germans lowered real balances as inflation increased. The last months of the German hyperinflation are not pictured in the figure because the inflation rate was too high to preserve the scale of the graph.
Hyperinflations tend to be self-perpetuating. Suppose a government is committed to financing its expenditures by issuing money and begins by raising the money stock by 10 percent per month. Soon the rate of inflation will increase, say, to 10 percent per month. The government will observe that it can no longer buy as much with the money it is issuing and is likely to respond by raising money growth even further. The hyperinflation cycle has begun. During the hyperinflation there will be a continuing tug-of-war between the public and the government. The public is trying to spend the money it receives quickly in order to avoid the inflation tax; the government responds to higher inflation with even higher rates of money issue.
Most economists agree that inflation lowers economic welfare even when allowing for revenue from the inflation tax and the distortion that would be created by alternative taxes that raise the same revenue