| | Wikipedia suggests that,"Hyperinflation is often associated with wars, their aftermath, sociopolitical upheavals, or other crises that make it difficult for the government to tax the population, as a sudden and sharp decrease in tax revenue coupled with a strong effort to maintain the status quo can be a direct trigger of hyperinflation."
I like what the Wikipedia article says about the difficulty collecting taxes and especially coupled with a strong effort to maintain the status quo. That, to me, it the description of the massive denial, fantasy thinking, and evasion that would characterize a government that creates that quantity of fiat currency.
I don't see it requiring a war to get that going. I can imagine something like a financial collapse in California where that state government is no longer able to fund hospitals or pay emergency workers or police. The Fed steps in. The financial markets get super jittery, not just because of California, or its effect on national and global economies, but because they know that even the fed isn't large enough to take that size of a bailout. The fed goes crazy pumping money into the stock-market to keep them from panicking at the same time they are suddenly paying the bills for California. This is that psychology of trying to make things look normal, to have their cake and eat it too.
Add to that mix the progressives who believe in a massive growth in government, who believe that if they could just spend more (maybe 10 times as much?) that it would 'stimulate' us back to health, and who understand and love the fact that a crisis can be used to leverage the transformation of the nation in the direction they want. So, I don't see them as being helpful in stopping inflation as it arrives on the cusp of being hyperinflation.
And, again, it is the psychological aspect of supply and demand that is at work in the steep, rapid, downward spiral in the worth of the dollar. The demand for money drops as people see that it is growing worth less rapidly - first the perception isn't that it IS getting worse, but that all the rumors are that it WILL, and it becomes like a self-fulfilling prophecy (except that there is a consistent reality under the fears). Because it is a psychological effect, this demand for money, in which a massive number of people can express uncertainty and fear by either holding onto money and suddenly taking us into a crash dive to a depression, or they can fear holding onto dollars and make them like hot potatoes. And, at this point in history, and maybe forever, no economist has a tool or technique that will let him predict which way it will go in advance.
|
|
