Just Add Hyperinflation: Its Armageddon
As I stand upon the mountain top, over looking the huddling masses of the peasants of humanity. My long beard and shanks rippling in the wind, my grizzled staff raised high, pointing at the dark mass of rolling darkness, darkness broken only rarely by the crackle of lightening. It is a darkness like no other, a mass of despair, a malice that is palatable and pungent in its hostility. My voice booms like the thunder of that storm, pummeling the gathered, clutching masses of frightened humanity: rich and poor, high and low, man and woman."Behold! Your Lord High Economist, the godling Keynes, through his priests the Interventionist Central Bankers have declared!" I pause for dramatic effect, fear and mysticism in the eyes of the masses. Mysticism at the mention of the shadowy man, nah godling John Maynard Keynes, fear at the coming of his Central Bankers. "Thou, sinners, thou thrifters, thou who have questioned his eternal Wisdom...now fear the fires of Inflation! Thou wilest be purged of your doubt and your consumer debt through the fires of Inflation! And since you voiced your doubt! Since you questioned the Will! It will be no simple inflation BUT...(more dramatic pause)...DEPRESSIONARY-HYPERINFLATION! You will eat grass and choke on weeds as you fondly remember steak dinners and red wine!"Gasps come from the huddle masses. Women cry out in shock and dismay. Babies wale, their cries mixing with the howling of the wind that brings the storm of Depressionary-Hyperinflation. The gnashing of teeth is heard over all. The End is neigh, thy punishment severe. I laugh the laughter of the mad, my eyes sparkling in the coming darkness."But how will this be worse then just Hyperinflation or a Great Depression?" comes a brave voice from the masses and suddenly the people's fear is abetted. Hope once more arises in their eyes that maybe, just maybe, this all is not as bad as they had but moments before feared. Even the storm seems to pause, rolling and pulsing but some how less menacing and stationary."Hmmm, this will not do, not do at all!" I think. "I will have to explain myself so that these fools will once more tremble." I pull up my robes around my knees and settle down upon the rock, perching over the masses, a wicked wisdom covering my face."To find this answer, let us examine, oh huddled masses, the difference between Hyperinflation and Depression and how both would normally effect your lives." They listen attentively."In a hyperinflationary situation, one usually created by a hyper expansionary government, a debt loaded economy or some catastrophe such as a major war, the money supply is rapidly expanded. The economy continues to roll along, jobs continue to exist as demand also continues to exist. At first, the workers are freed from their debts, as the amounts owned literally melt away in the face of larger and larger pay checks. Of course, as is usual, salaries rarely stay up to date with prices, which are much more agile and elastic. Soon the worker finds that while debt free, he can afford less and less to buy with his ever more worthless money, but at least, ground under the heel of hyperinflation, he is still employed and remains fed, even if on bread and processed meat rather then on croissants and steak."They bob their heads in understanding. Many of these peoples of the world have lived all their lives with inflations of one level or another and quite a few with hyperinflation. It is, after all, the order of the century, as the godling Keynes dictated to the interventionist fiat monetary systems. I go on."Then there is depression, something that most of you know little about. First spending falls, then output falls to match the new lower demand levels. Of course excess employees are laid off. These in turn spend little if anything and their employed brethren also spend much less, in fear of losing their jobs. Less spent means less produced and the cycle repeats. Debt become overwhelming and crushing, as the value of the dollar becomes greater, again, adding to the cycle. Of course, for those tens of millions unemployed, at least what few savings they have and what little money they get from their governments, will now buy them more then it did before.The pricing levels of the system are reset and will be kinder to future generations, but like most such things, it is painful and a nasty, if not necessary a long, process.""But how does this link back to Depressionary-Hyperinflation?" again that doubting Thomas. Enough of this, time to learn fear."Well," I begin, in an quite, almost gentle voice, "you see, the people fear this painful process of depression and they call upon their betters, their masters to do something, anything about it. Of course the Monetary Interventionists know only one thing to do: lower interest rates and print money. At first, this makes the pain less so and easier to bare. The problem is, especially for you millions and millions of unemployed, it is rather hard to propagate. Each easing requires more and more cash, sorta like a drug addiction. But once the cash hits the system it propagates inflation. This of course takes time to appear, so it is rather hard to guess when to much is to much and out of fear of not being enough, that gut feeling is ignored. Then comes the Hyperinflation!" I feel satisfied in my explanation, but still there is hope in their eyes!"So..." again that voice, though this time a bit more hesitantly."So!" I begin, "for those 15 to 30% of you without jobs, on meager fixed government monies, on pensions and savings...hahahaa....it's over, in days and weeks, your money buys nothing as the fires of Depressionary-Hyperinflation burn it all away! You will beg, you will steal, you will burn in rage and hunger and as the living dead, you will fall upon those who still have jobs but are to poor themselves to help you and you will consume them to! Fire and flame, hunger and despair! Then you will, in your orgy of despair and destruction, turn to the saviors who will come to you, the demagogues who will enslave you! Then and only then, will you truly know suffering!" My voice rings in stark laughter. I am on my feet again, waving my staff...the dark clouds booming and rolling forth.Now they understand, now they know, there is no hope, no salvation, not from this one. Some throw themselves at my feet, begging for salvation, others throw themselves from the nearby cliffs...but there is no salvation, no...only the Fires of Depressionary-Hyperinflation.My laughter is swallowed by the rolls of thunder.