Comment: Hyperinflation isn't caused by

(See in situ)


Hyperinflation isn't caused by

Hyperinflation isn't caused by X dollars being in the system. There is no "magic" amount of money that will trigger it. Rather it is caused when a critical mass of people lose faith in the ability of those dollars to repay debts. Right now, faith is all the dollar is hanging on right now, and it will probably hang on for some time yet.

However, even now some lenders are beginning to throw up their hands at the inability of the dollar to retain enough value to allow them to earn a profit. As more and more lenders come to this conclusion, loss of faith in fiat currency will spread from the monetary institutions to the general population.

You might then think: if the answer to staving off hyperinflation is faith, then the system can be maintained in perpetuity as long as we all continue to believe in it. That, however, is an argument for propaganda and thought police. It's been tried in Zimbabwe (among other places) and failed miserably. You can't force everyone to believe that the dollar is a good value; eventually enough people are going to reject it, regardless of what you do to keep the faith.