This post is about inflation and hyper-inflation. I found a great article and decided it was worthy of some wider circulation
If you too are interested, then you had better be REALLY interested, and enjoy a lot of reading and have a lot of time to spare. The article linked is 127 pages+notes (lots of dense type and dense argument).
But if you want a good education, then it is worth it.
Dying of Money:
Lessons of the Great German and American Inflations.
by Jens O. Parsson
” …governments have been perpetually rediscovering first the splendors and later the woes of inflation. Each new government discoverer of the splendors seems to believe that no one has ever beheld such splendors before. Each new discoverer of the woes professes not to understand any connection with the earlier splendors. In the thousands of years of inflation’s history, there has been nothing really new about inflation, and there still is not…
The twentieth century brought the institution of inflation to its ultimate perfection. When economic systems are so highly organized as they became in the twentieth century, so that people are completely dependent on money trading for the necessaries of life, there is no place to take shelter from inflation. Inflations in the twentieth century became like inflations in no other century.
The two principal inflations that occurred in advanced industrial nations in the twentieth century will probably prove to have done more to influence the course of history itself than any other inflation. One of these was the German inflation that had its roots in World War I, grew to a giddy height and a precipitous fall in 1923, and contributed to the rise of Adolf Hitler and World War II. The other was the great American inflation that had its roots in World War II, grew in the decade of the 1960’s toward an almost equally giddy height…
The past is prologue, it is said. No more instructive prologue to the American inflation… still unfinished, could be chosen than the German inflation “
What we can say is that inflation is a choice, governments do it deliberately. Because it’s seen as being in their best interests. The fact that it steals from the rest of us is neither here nor there, not their problem. And that’s what governments DO, anyway – appropriate, one way or another.
As long as it is working for the top, the rest of us can get screwed…
It’s amazing how simple it all is really.
Wouldn’t it be nice if we (the sheeple) could learn from history…
Btw – one more little take away from all of this:
” Still another pronounced tendency of an inflationary boom is to channel its growth into fringe activities, which means activities that constitute the overhead of society and do not directly generate any well-being for its members. Germany had this tendency acutely, and the United States did too. Inflation’s most prominent characteristic is feverish hyperactivity, and generally it is indiscriminate activity at forced draft for its own sake and without any considered connection to a useful purpose. Inflation has no tendency to stimulate productive activity most, but quite the opposite.
What was clear…was that capital investment can be valueless, bad capital investment is total waste, and the strong tendency of capital investment in an inflation is to be misdirected and to exceed all valid requirements. “
For a essay written about the period of the 60’s – 70’s, it could easily have be written about now.