Hyperinflation - The inevitable end of Fiat-Money
Today I would like to talk about this article which I recently came across while browsing NOSTR. I want to start with the following quote from the article:
It is all but inevitable that central banks will continue expanding the money supply to delay the day of reckoning and preserve the facade until the inevitable hyperinflationary crack-up boom, although the sheer weight of debt alone may produce this outcome. Promises of reform have been made, only to go unfulfilled. In order to prevent disaster, we must fundamentally rethink our monetary and fiscal policies against the temptations of short-term political gain.
The article makes many interesting points and the one above is the one I found most significant. Our underlying system is broken. Fiat money is not how we get a stable economy. All fiat currencies have ended and the ones that have survived up until today have lost significant levels of purchasing power, this fact stands as of now. I will do a deep dive on the developments of purchasing power at some point in the future, for now you have to take my word for it.
The article describes how through centrally controlled money we run into a death spiral of interventions. Each intervention creates new problems those newly created problems are tackled by putting even more money into the system. This bloats up the money supply and leads to broad malinvestments. And some day the reckoning for those short term decisions will hit, often in the form of hyperinflation. Hyperinflation is a beast that destroys economies just have a look at Venezuela, Argentina, Zimbabwe and all the several other appearances of hyperinflation in recent history and for those interested I can only suggest to look into the hyperinflationary period in Germany around 1922-1923.
I want to leave it at that for this post. I recommend the article for a better understanding. I don't want to just copy paste articles from other sources so I will preferably give a couple interesting quotes with commentary and leave it up to you to dig into a topic that I am merely summarising.
Stay humble and stack sats.
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