World's Most Worthless Money

1. World's Most Worthless Money
As Americans worry about the rate of inflation exceeding 4 percent, we should consider Zimbabwe, where the inflation rate broke the shocking 100,000 percent mark and the country released a 10 million-dollar note (now valued below \$4 on the black market). But Zimbabwe's currency is hardly the only one inflated beyond reason.

SLIDE SHOW

2. I thought we we're now supposed to worry about DEFLATION?

3. Runaway inflation is often the precursor of massive deflation. Volatility ain't good in either direction.

4. Inflation ... deflation -- now my head hurts.

Anyone care to give a simple "deflation for dummies" explanation of just what it is? Help an Old Guy out here, will ya?

(No, I am NOT old enough to have lived through the Great Depression, but my parents did.)

5. Originally Posted by writerguy
Inflation ... deflation -- now my head hurts.

Anyone care to give a simple "deflation for dummies" explanation of just what it is? Help an Old Guy out here, will ya?

(No, I am NOT old enough to have lived through the Great Depression, but my parents did.)
Inflation means stuff costs more; deflation is just the opposite; prices decrease.

Now you would think prices decreasing would be a good thing, but most economists say otherwise. They believe deflation could result in a deflationary spiral (ever increasing reduction in prices, wages, etc), and is a major cause of the Great Depression:
http://en.wikipedia.org/wiki/Deflation

Austrian economic theory, however, offers a counter opinion:
Deflation: Nothing to Fear
The Blessings of Deflation

http://en.wikipedia.org/wiki/Deflation
http://en.wikipedia.org/wiki/Velocity_of_money
http://en.wikipedia.org/wiki/Hyperinflation

Now, 50% will agree and 50% will disagree BUT

What if we need to stimulate the economy and to JUMP START the [ farmer and a mechanic, with just \$50 between them scenario] economy.

The government of the U.S. could print 100's of millions and send check to most everyone.

BUT, what if people did not buy stuff. They paid off debt and/or put the money in FDIC insured savings accounts for a "rainy day"?

Velocity_of_money might be ZERO.

What do ya think the government would propose NEXT?

A new stimulus package and if that didn't work another stimulus package and on and on until it would provoke people to BUY.

Buy this time we "could" get to The Nightmare German Inflation like 1923

While I do understand that this is not "Happy Holiday" material, IT COULD HAPPEN.

Barney is calling for it NOW