The Phaserl


Hyperinflation – How Did They Get It So Wrong?

from Armstrong Economics:

With hyperinflation they ASSUME the cause is an increase in money supply. We have just seen the Fed increase money supply by $3 trillion without inflation. This alone proves that the theory is dead wrong. We have spent tens of millions of dollars building databases on monetary history. We did not assume anything. This research has been conducted the same as Adam Smith – observe and record. Some people are just so convinced that money must be tangible and not paper that no matter what you show them they refuse to believe because they are a fixed entity incapable of adapting.

Paper money has been around since the 1200s and in ancient Egypt money was receipts for grain for thousands of years until conquered by Alexander the Great is 334BC. The premise is the same as social benefits for its value is entirely dependent upon your belief. To some you say social security will collapse and they ask where is you tinfoil hat. Government to them is like God – always was and always will be. They do not allow themselves to dare question what if, because they have no idea what they would do. People go to college to get that piece of paper yet rarely do what they majored in during school. It is just a piece of paper that shows you went to school – that’s it.

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7 comments to Hyperinflation – How Did They Get It So Wrong?

  • Bri 3D

    “We have just seen the Fed increase money supply by $3 trillion without inflation.”

    Gas in 2000 $1.25
    Gas in 2013 $3.50

    Almost 300% inflation. What planet is this author living on?

    The U.S. exports most of its inflation. The people of Eqypt, Brazil, Greece, Spain, ….. ARE NOT Protesting LOWER PRICES.

    • Brian

      280% inflation over 13 years is hardly “hyper” inflation. Now if that occurred over 13 months then I’d be worried. What Armstrong is saying is that there are a lot of factors that need to come together in order to get hyper inflation. The Fed has certainly primed the pump with tons of fiat garbage. The problem is where is it being pumped too? Not to Main Street. Most of it is just churning in the banks excess reserve accounts at the fed. Some of it is blowing bond or equity bubbles, but mostly it is sitting idle collecting .25% interest.

  • josh

    The Fed has a lot of tricks up their sleeves, we just haven’t seen it yet…that’s all
    Buy gold and silver at ridiculously low prices while you still can.

  • Dissolution

    I usually lend Martin at least one of my ears, but I honestly feel dumber for having read this incoherent rant. Btw, most “academics” know how to use their native language (I’m presuming English is his?) and end their articles with the proper punctuation. Just a thought.

  • marc

    Armstrong states hyperinflation (only occurs in correlation with the dollar being considered toilet paper).

    The evil overlords with not allow that to happen, even to the extent of going to war and allowing the peasants to kill each other with USSA’s greatest export (bullets and bombs).

    Most people here are not speaking hyperinflation, just high inflation with manipulations of all markets. Hard to put that in a computer and get the right answers.

    No one has got is so wrong, not sure what he is trying to get at, other than place himself higher than the rest????

  • Ed_B

    “With hyperinflation they ASSUME the cause is an increase in money supply.”

    That would be the classic definition of inflation but not of hyperinflation. For that to occur, the people have to lose faith in the currency. Because they lack faith in the value and stability of the currency, they demand a LOT more of it in exchange for real goods and services. This creates a downward spiral in currency value and a very rapid increase in day to day prices. What was the cost of a loaf of bread in Germany in 1923… about 3 BILLION marks? Something like that. 4 years earlier it was 1 mark for a loaf of bread.

    As to inflation, my God, people, we have a crapload of it now. Food and fuel prices are high and going higher. John Williams, of Shadow Government Statistics, calculated inflation at over 9% now and he uses the same method that the Gov used before they started dicking around with the numbers. You want to find inflation? Just look at the US stock market. Bernanke’s annual trillion dollar printing spree is showing up there with stock prices inflated to about double their true value. When a lot more money comes into the market and the number of shares is declining, share prices MUST go up and regardless of what the economy is really doing. Those who are not seeing inflation are not seeing it because they are CHOOSING not to see it. It’s there.

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