An expert economist said recently that a loaf of bread is going to cost $100.
I don’t know much about hyperinflation, but I remembered an example I had read about the hyperinflation in Germany. The story that circulated was about a woman who took a basket of money to a store to buy a few items. While she was there, her toddler ran out into the street. Terrified, the woman sat the basket of money down and ran into the street and rescued the toddler. When she came back to where she had left the basket of money, she found the money still there, but the basket had been stolen.
I decided that since my knowledge of hyperinflation was so small, I’d better research the subject. I went to my computer and typed in the word hyperinflation. Two articles appeared. I chose the one by a college economics professor: The Concise Encyclopedia of Economics. What the professor said that impressed me the most was that a $1 item today at 50 percent inflation would cost $130 in one year.
Germany’s experience is probably the most famous hyperinflation example. However, the professor, the cause of hyperinflation is the rapid growth in the supply of paper money. In today’s economy, that means hyperinflation is being caused by the Fed’s practice of printing money out of thin air. Government uses hyperinflation to tax the citizens without their knowledge.
According to the article, the government can end hyperinflation by two commitments: “halt the rapid growth of paper money and bring the government’s budget into balance.”
Many economists are predicting that an economic tsunami is coming our way. Some refer to it as Armageddon.
Big government spenders didn’t believe there would be a price to pay for spending money we don’t have. Now the government and each of us will learn the hard way, the very hard way, that the law of cause and effect hasn’t been repealed.