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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: jimmg who wrote (75866)	12/17/2006 12:16:47 PM
From: bart13	Read Replies (2) \| Respond to of 110194

<<bottom line, study any hyperinflations of the past and you'll find that the money generally does not make it into the pockets of the households.>>> That's not true. wages for everyone skyrockets in hyperinflations. Kris is right. For hyperinflation to occur, there has to be some mechanism for getting money into the hands of the masses. Weimar Germany used printing presses (literally) and money velocity skyrocketed. Wages skyrocket for the masses, but purchasing power doesn't. If a household is very wise about investing they may gain but most don't and didn't - during Wiemar or any other hyperinflation. Middle classes are mostly destroyed during hyperinflations.

To: jimmg who wrote (75866)	12/17/2006 1:29:21 PM
From: kris b	Read Replies (2) \| Respond to of 110194

Weimar Germany used printing presses (literally) and money velocity skyrocketed. It was easier to create hyper inflation back then because cash (credit was limited to very few) was also needed for transactional purposes, therefore it was easy to put liquidity/buying power into to the population's hands. After all everybody was paid in cash. Today buying power is created through credit. The next step is to force both borrowers to borrow (and spend it) and lenders to lend. In a nutshell you need two steps today rather then one in Weimar Republic. Nobody here showed me yet logically the method of implementation of the two step process. What is the transmission mechanism from the credit creation (which asset class can be still monetized) to the cash register? Anyone?