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I know nothing about economics. However, something sticks out to me.
The good side of hyperinflation is supposed to be that if you have debt like mortgages for example, you will be able to pay it down more easily using inflated dollars.
What I don't get is how you are supposed to pay with inflated dollars when I don't make any more money now than I did 5 years ago for example but am far more educated, have a much higher title, and have much greater responsibilities.
My point is, they generally aren't increasing wages now. Would they really increase wages alot during hyperinflation?
If not, then how will you have more money to pay down yesterdays debts?
plain and simple it is not a good thing. even the plain old high iflation we had in the late 1970's-early 1980's crippled things. equities died and 18% mortgages crippled real real estate.
it was not until inflation finally fell that things did well.
I know nothing about economics. However, something sticks out to me.
The good side of hyperinflation is supposed to be that if you have debt like mortgages for example, you will be able to pay it down more easily using inflated dollars.
What I don't get is how you are supposed to pay with inflated dollars when I don't make any more money now than I did 5 years ago for example but am far more educated, have a much higher title, and have much greater responsibilities.
My point is, they generally aren't increasing wages now. Would they really increase wages alot during hyperinflation?
If not, then how will you have more money to pay down yesterdays debts?
Thanks for explaining.
You're talking about two completely different issues. If the demand for, and supply of labor remains the same and inflation kicks in, you will see wages rise relative to inflation. The situation we've had in the past decade is quite different. The demand for labor from 10 years ago to today has basically remained the same. We have also added some 30 million new workers to the labor pool. Since the supply of labor has grown, but the demand remained unchanged, this put downward pressure on wages. Many experienced wage stagnation, while many others experienced a sharp decline in their earning potential.
In the case of hyperinflation, wages would have to rise. Who is going to get out of bed for a days pay that doesn't cover the expense incurred getting to work? Of course, in such a circumstance, one would expect job prospects for the average worker to be rather bleak. Maybe employers will offer free job site room and board as an incentive?
I know nothing about economics. However, something sticks out to me.
The good side of hyperinflation is supposed to be that if you have debt like mortgages for example, you will be able to pay it down more easily using inflated dollars.
What I don't get is how you are supposed to pay with inflated dollars when I don't make any more money now than I did 5 years ago for example but am far more educated, have a much higher title, and have much greater responsibilities.
My point is, they generally aren't increasing wages now. Would they really increase wages alot during hyperinflation?
If not, then how will you have more money to pay down yesterdays debts?
Thanks for explaining.
Most money is created by mortgage money, meaning that it reduces debt ponzi style for early adopters only. 70-80% of bank credits it from mortgages. We have been in the end of that run which is why people who recently purchases are not inflating their principle away.
plain and simple it is not a good thing. even the plain old high iflation we had in the late 1970's-early 1980's crippled things. equities died and 18% mortgages crippled real real estate.
it was not until inflation finally fell that things did well.
Everything you just described is from the point of view of creditors and rent seekers. The productive economy was doing just fine. The only thing that crippled us was the oil embargo and S&L scandal. .
Most money is created by mortgage money, meaning that it reduces debt ponzi style for early adopters only. 70-80% of bank credits it from mortgages. We have been in the end of that run which is why people who recently purchases are not inflating their principle away.
The mechanism for inflation and hyper inflation differ. You run inflation on debt. You run hyper inflation on cash.
Everyone is still saying We want USD. When that change things will go bad fast. Printing money to meet our external obligations. That is what drove hyper inflation in post WWI pr-Nazi Germany. That is coming.
The mechanism for inflation and hyper inflation differ. You run inflation on debt. You run hyper inflation on cash.
Everyone is still saying We want USD. When that change things will go bad fast. Printing money to meet our external obligations. That is what drove hyper inflation in post WWI pr-Nazi Germany. That is coming.
Now we can intentionally drive hyper inflation with the minimum wage law.
You don't seem to realize the actual scale of the German event. It is only coming to the US if we keep printing with no supply. It could go on for decades or more.
Hyperflation is a very special case which is quite rare. Understand it happens for quite different reasons than standard inflation. Countries which experience it are often bordering on being cut out of the world economy for a number of reasons. Often its a condition the government has almost willingly done out of spite or for special domestic political reasons, such as handing an enormous benefit to a small portion of the population like the rich who probably have extensive foreign holdings. Think Zimbabwe not that long ago or Germany in the 20s. Its one thing to think well we can inflate our way out of government debt, quite another mindset to say screw the world, we want you to regret ever loaning us a dime. To hyperinflate is a blatant intentional act, the alternative is just to say we can't pay and can we work something out as most countries do.
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