Understanding Hyperinflation

Hyperinflation is very poorly understood by modern economists.  My research has shown that this is likely due to the lack of evidence showing direct connections between economic environments and consistency in prior cases of hyperinflation.  The widely held belief is that government debt and deficits (aka, “money printing”) lead to hyperinflation.  But my research shows that hyperinflation is not merely the result of “money printing” or an expansion of the money supply and in fact tends to occur around very specific and severe exogenous economic circumstances which lead to an increase in the money supply ultimately leading to hyperinflaiton.  Hyperinflation is not merely high inflation or a collapse in confidence, but is actually due to severe exogenous shocks with very real and provable transmission mechanisms. Historically, these events tend to be:

  • Collapse in production.
  • Rampant government corruption.
  • Loss of a war.
  • Regime change or regime collapse.
  • Ceding of monetary sovereignty generally via a pegged currency or foreign denominated debt.

For more on this subject please refer to my research below:

Hyperinflation – It’s more than a monetary phenomenon

How the hyperinflation meme can be bad for your portfolio.

The persistent hyperinflation theories don’t add up. Why is there deflation in hyperinflation predictions?

Do gold prices correlate with inflation?

On being right for the wrong reasons.

Scary stories aren’t going to cause hyperinflation and serve little purpose other than to scare you into believing someone’s preconceived political biases.

The Russian default – what happened?

Debunking Ron Paul’s talking points.

The myth of American bond vigilantes.

 

Cullen Roche

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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