DO not get scared to death when you hear the word "hyperinflation". I am asking a serious question, what is so wrong with that? I was from China, and my parents still live there. The inflation in China from 1980 to now is at least 30X, yes, 3000%. I know that based on my first hand experience. It does not take a Economic Nobel prize winner to figure that out. I knew the prices back then, and I know the prices now. China just keeps printing, without telling anyone in the world. I can't say China living standard has gone downhill since 1980s. On the contrary, it is at least 10 times better now. Now, let's come back the US. If you compare 1930 and now, the inflation is at least 3000%. Do you like the life back then, few people had cars, not many roads available, no TV, no phone, no advanced medicine, etc... or you like the life now? I would easily choose now. Now if we fast forward the whole thing, if we have 200% inflation in next 5 years, what's so wrong with that? Yes, the price will be 200% more, but your income will also be 200% more. The only problem I see is "old money" will be devalued. Well, in China, most retired people worked for the government, so they have pension, and their pension is inflation adjusted. For instance, my parents retired as university professors. Their salary was around $200 a month 10 years ago. Now their pension is about $1500(I am only use US dollar here) a month. Their house was free to them, and the medical is paid 100% by the government. Now, in the US, if social security is inflation adjusted, I think there is no harm to "old money" or old people. If they have 401K, I believe their investment would appreciate if hyperinflation comes. Yes, the US made serious mistake during Greenspan's term. The money got so cheap back then. It was a huge housing bubble. You can let the bubble burst and everybody suffers, or you can bubble up everything else, then nothing is bubble anymore. Seriously, I don't like inflation, but at this point, looks like the FED is running out options. Just inflate the hell of it. Put 100 Trillion in the market if we have to. The gas price may be $50/ gallon, but your salary will also be $1M/year. Then there won't be any foreclosure problem. Anyone can easily pay off their house. Basically what i am saying is the US made a huge mistake, let's just redo it from scratch. Let's wipe out "old money" and "old debt" by inject trillions of dollars. BTW, I am doing very well. I am still young, and I can easily pay off my house now. I have some "old money", but i am ok with hyperinflation.
Google the term if you must. Hyperinflation devestates the middle and lower classes. The wealthy are traditionally fine if not better off because they own the assets. And HYPERinflation refers to 3000% over a matter of months, rather than 30 years so it is much more dramatic than anything you've seen in china.
Or google Zimbabwe and hyperinflation. When the redistributionists finished with seizing the land from the evil white farmers, the people were literally reduced to eating rats to survive.
This is the error of your statement right here. In 2005 average income was 46k per year. Today its still 46k per year. You think prices havent risen in 6 years? Wages are the last thing to rise when inflation is concerned. So you are paying 200% more for things while still waiting for your income to rise 200%. Thats where you get screwed. Its like, lets say your employer pays you $2000 per month and your rent is $800 per month. Then hyperinflation takes over and your landlord raises your rent to $1600 per month, meanwhile your boss isnt give you a raise for another 3 months. Thats 1 reason why hyperinflation is bad.
Those people come from "upper social class" of China, they don't understand diddly-squat of modem economical theory, they are forced fed government propaganda all their life. They don't understand effects of price control on goods which produced by peasant migrate worker from country side. Price control on vegetables, wheat, rice, cooking oil and etc has destroyed people's will to work for decent and legal wages, instead getting rich quickly schemes on their minds, moral standard has gone downhill, poisonous food and counterfeit goods are everywhere . Those people has little idea that inflation is root cause of infamous event in 1989. And yet, OP has the audacity to speak up his ignorance. This world is mad as hell.
If you drink one shot of vodka per hour for 20 hours, not much will happen to you. If you drink 20 shots of vodka in 1 hour - you will probably die. This is what hyperinflation is like. It is not just the inflation, it is also the speed with which inflation hits. 3000% inflation over the course of a few years is manageable (if your pay is going up roughly 3000% as well). 3000% inflation per day is hyperinflation...and it is not manageable by the common person. As stated before - the wealthy are not usually harmed by hyperinflation. Don't forget...Keynes said something like, "In times of deflation it is best to hold money. In times of inflation it is best to hold product." When hyperinflation swings around...you had better have EVERYTHING you need to live on...until hyperinflation goes away! You have $1,000,000 saved up to buy a house today...tomorrow, with hyperinflation that $1,000,000 will buy you a cup of coffee...no joke! Like another poster wrote - check out what happened in Zimbabwe. -gastropod