Friday, 27 February 2009

Hyper-Inflation on the Horizon?

Hyper inflation is a phrase thats just started to be bandied around in financial circles. But no-one has noticed, we've had hyper-inflation for years already. Thats what the debt bubble is.

Instead of good old fashioned seventies-style monetary inflation, we've had debt inflation. The government have kept quiet about it, because it increases the money supply without having any tell-tale signs like printing vast volumes of money. It was kept off the official inflation figures and so made everyone in the treasury look good. But it was unsustainable.

Well, now the chickens have come home to roost and right now what the government are doing by pouring cash into the banking black hole is converting debt inflation into good old monetary inflation. They've even started increasing the money supply (how that phrase send chills through anyone that lived through the seventies and eighties) in order to throw banknotes into the void.

The only difference this time round is that the effects are delayed. But there will be serious effects and consequences as the transition occurs.

So, we're already suffering from hyper-inflation, its just that its not been converted into a form that is recognisably recorded as such by the financial establishment. Yet.

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