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Hyperinflation? No, I don't think so.


A structural imbalance of the external accounts is part of the story in all the hyperinflationary episodes that I can bring to mind, with notable examples from the Confederate States of America in the 1860's through the Wiemar Republic, through Brazil in the 1970's, through Argentina at the turn of this century.
Unless the US' trade deficit is a structural imbalance large enough to trigger hyperinflation. If the US dollar collapsed, would the US stop importing, or would it continue to inflate its currency in a futile attempt to import more than it can possibly?

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
by Migeru (migeru at eurotrib dot com) on Thu Oct 14th, 2010 at 10:08:05 AM EST
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