Re:Abundant Capital
by imtringued on Tuesday February 23, 2021 @03:30AM
(#26235037)
Hyperinflation is caused by a collapse of production capacity(think of weimar republik or the collapse of coal and gas power plants in texas). Where do you see that happening? Obviously, there is a collapse in house construction rates and that's why you see house prices go up but that's a long term trend which started decades ago and not something caused by the Fed.
>(Incidentally, historical incidents of hyperinflation usually happen in the transition between a command to a market economy,
Most command economies simply didn't provide enough production capacity to meet the demand of all citizens.
>the two most common examples being when wartime gives way to peacetime, and when communism gives way to capitalism.
China had massive food shortages that were papered over by price controls. Just because someone fakes the numbers doesn't mean there was food for everyone. By introducing a free market you are merely revealing an existing collapse in production
The Weimar Republik is a classic example of a collapse in production capacity. Germany lost the war, winners destroy factories and there is a lack of working age men because they died in the war. People don't have fond memories of there being food everywhere and some speculating capitalist driving up prices because of greed. No, there were many days where they got three slices of bread per day and a hand sized lump of coal to heat their home.
>The transition from a pandemic economy to a normal economy has many elements in common with that: there's a large shift in consumer demand while the economy has been optimizing for pandemic production for the last year.)
How exactly is that going to result in a food shortage?
>(Incidentally, historical incidents of hyperinflation usually happen in the transition between a command to a market economy,
Most command economies simply didn't provide enough production capacity to meet the demand of all citizens.
>the two most common examples being when wartime gives way to peacetime, and when communism gives way to capitalism.
China had massive food shortages that were papered over by price controls. Just because someone fakes the numbers doesn't mean there was food for everyone. By introducing a free market you are merely revealing an existing collapse in production
The Weimar Republik is a classic example of a collapse in production capacity. Germany lost the war, winners destroy factories and there is a lack of working age men because they died in the war. People don't have fond memories of there being food everywhere and some speculating capitalist driving up prices because of greed. No, there were many days where they got three slices of bread per day and a hand sized lump of coal to heat their home.
>The transition from a pandemic economy to a normal economy has many elements in common with that: there's a large shift in consumer demand while the economy has been optimizing for pandemic production for the last year.)
How exactly is that going to result in a food shortage?