I asked this question to Tom Woods and he suggested I pose it to the forum:
-Most examples I know of hyperinflation are relatively small nations (Rhode Island, Germany). Do you think hyperinflation is even possible in a country as large as the U.S. I was trying to figure out mathematically how much money would need to be printed and other variables that should be considered.
-People in Texas have different spending habits than people in Minnesota. People save more more in certain parts of the country. How does this effect a central bank churning out dollars? And also, aren’t most of the printed dollars concentrated in places like NY and D.C. (hence higher prices in those places)?
I conclude from these factors that the phenomena of hyperinflation could not occur across the entire country, but if so in certain parts of it. Or perhaps it could occur anywhere, but the timing would be different in different regions.
How does an Austrian approach determining the factors of hyperinflation other than a central bank getting happy at the printing presses?
Thanks, Sean
If it can happen in the Roman Empire, it can happen anywhere.
I’d say not only would American hyperinflation be nation wide, it would be felt across the globe.
So you’re saying that it can’t and won’t happen because it hasn’t happened? There. I just subtly pointed out the fallacy in your argument and, thus, defeat argument. Now we can start from scratch: I don’t why the geographical size of a nation relevant to the issue of hyperinflation. Hyperinflation, is when prices, relevant to the cufrrency, rise dramatically. There is actual rate, or number, to determine this. So I ask you, if the dollar gets dumped, why won’t prices rise dramatically everywhere in the US? Are you saying that a dollar panic in New York won’t affect the dollar in California?
Right. I mean wouldn’t prices already be adjusted to the scope of the population both from the supply of labourers and capital goods and consumer goods and the demand for them? So any disruptions through inflation would still cause a problem because the existing price system would be that which were optimal (or near optimal) for the population’s size.