2020 had some significant silver linings

Re:2020 had some significant silver linings by krupan on Friday December 25, 2020 @09:29AM (#25536655)

ELI5: When there is a lot of demand for something, the value of that thing goes up. When you increase the supply of that thing, the value goes back down. In other words, the value of a thing changes based on both supply and demand.

Inflation is where the value of dollars goes down. As long as you don't print more dollars than people are demanding, you won't get hyperinflation.

The U.S. dollar, for one reason or another, is in high demand all over the world. Other national currencies are not, so when they printed too much of their currency they got hyperinflation.

If the U.S. printed too many dollars too quickly, or demand for dollars dropped quickly, the dollar could see hyperinflation too.

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Re:2020 had some significant silver linings by mehrdadn on Friday December 25, 2020 @09:34AM (#25536680)

You didn't account for the effect of increasing debt on the necessity to print money?

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Re:2020 had some significant silver linings by krupan on Friday December 25, 2020 @09:35AM (#25536693)

Debt is the demand. People (governments) are loaning the U.S. money in exchange for the U.S. paying them back in dollars. That's how bad they want dollars.

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Re:2020 had some significant silver linings by mehrdadn on Friday December 25, 2020 @09:46AM (#25536740)

But obviously the question isn't "would they still want dollars?", right? But rather "at what price (i.e. interest) will they want dollars?"... and my point is that price will need to keep increasing as the US borrows more and prints more money to pay interest on its existing debt, right? I don't understand how you just neglect this feedback loop... it screams exponential growth to me.

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Re:2020 had some significant silver linings by krupan on Friday December 25, 2020 @09:52AM (#25536781)

You are absolutely correct. If demand for dollars drops someday the U.S. is in for a world of hurt. It would have to find some way to decrease the supply of dollars to match. Right now I believe that would have to be through increased taxation.

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Re:2020 had some significant silver linings by mehrdadn on Friday December 25, 2020 @09:59AM (#25536816)

I'm saying that on the current path the US is on, it's not "if" to me, but "when". Or to be more precise, "at what rate". And I see that rate as monotonically getting worse.

And either way, then doesn't "nobody in the field worries about hyperinflation for developed economies" seem utterly misguided? It seems quite worrying given what I just described.

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Re:2020 had some significant silver linings by krupan on Friday December 25, 2020 @10:01AM (#25536830)

So, buy bitcoin!

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