{"id":66059,"date":"2023-10-29T15:47:39","date_gmt":"2023-10-29T20:47:39","guid":{"rendered":"https:\/\/olduvai.ca\/?p=66059"},"modified":"2023-10-29T15:47:51","modified_gmt":"2023-10-29T20:47:51","slug":"the-specter-of-hyperinflation-looms-over-the-economy","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=66059","title":{"rendered":"The Specter of Hyperinflation Looms over the Economy"},"content":{"rendered":"

The Specter of Hyperinflation Looms over the Economy<\/a><\/h3>\n
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The threat of hyperinflation has haunted fiat money economies throughout history. Although past empires crumbled under the weight of unrestrained money printing, modern bankers at the Federal Reserve assure us that today\u2019s financial system is immune to such a fate. Austrian business cycle theory, however, reveals that current economic stimulation may be propelling us toward a crisis of catastrophic proportions: a crack-up boom that marks the dramatic end of this boom-and-bust cycle. When a central bank expands the money supply to reinflate bubbles, it destroys the currency\u2019s purchasing power. This endgame, in which the monetary system crumbles beneath a weak economy, represents the ultimate failure of interventionism. Once the public expects prices to keep rising, hyperinflation becomes a self-fulfilling prophecy.<\/p>\n

The Expanding Boom-and-Bust Cycle Ends in a Crack-Up Boom<\/h4>\n

To comprehend the precarious state of America\u2019s monetary system, we must first\u00a0review the boom-and-bust cycle<\/a>\u00a0as formulated by Ludwig von Mises and the Austrian school. The Austrians observed that the artificial suppression of interest rates by a central bank initiates an unsustainable economic boom by promoting malinvestment. Pushing rates below natural market levels sends a distorted signal to businesses that long-term capital investment is more profitable than the economy can actually support. In the euphoric boom phase, jobs multiply and GDP grows with investment. But the investments lack economic merit, so the house of cards eventually collapses.<\/p>\n

With the liquidation of malinvestments, the bust phase emerges: unemployment soars, output contracts, and a recession begins. Since the investments were built on quicksand, they must unwind. Each failed business further curtails consumer spending, rippling the bust through the economy. But rather than letting liquidation and market corrections occur, policymakers add stimulus, setting up a larger bubble and more painful bust down the line.<\/p>\n

\u2026click on the above link to read the rest\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The Specter of Hyperinflation Looms over the Economy The threat of hyperinflation has haunted fiat money economies throughout history. Although past empires crumbled under the weight of unrestrained money printing, modern bankers at the Federal Reserve assure us that today\u2019s financial system is immune to such a fate. Austrian business cycle theory, however, reveals that […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[2282,122,303,309,413,498,33990,534,538,13351,25781,3650],"class_list":["post-66059","post","type-post","status-publish","format-standard","hentry","category-economics","tag-austrian-business-cycle","tag-central-bank","tag-fed","tag-fiat-currency","tag-hyperinflation","tag-malinvestment","tag-michael-matulef","tag-monetary-policy","tag-money-printing","tag-price-inflation","tag-the-mises-institute","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/66059","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=66059"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/66059\/revisions"}],"predecessor-version":[{"id":66060,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/66059\/revisions\/66060"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=66059"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=66059"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=66059"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}