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Hyperinflation Defined, Explained, and Proven: Part II - Jeff Nielson

Hyperinflation Defined, Explained, and Proven: Part II - Jeff Nielson
By Jeff Nielson 3 years ago 34723 Views 9 comments

August 4, 2016

Part I began the somewhat ambitious mission described in the title: providing readers with the true definition of the term “hyperinflation”, in both economic and mathematical terms. This was done through first defining the term “inflation” itself. It was then explained how the dynamics of inflation/hyperinflation operate, through the use of a simple allegory. Finally, readers were provided with a real-life illustration: the hyperinflation of the U.S. money supply .

Part II continues this mission by explaining why the current economic context makes a full-blown, monetary episode of hyperinflation inevitable, meaning the collapse (to zero) in the exchange rate of our fiat currencies – at least those of the Corrupt West. The starting point here is obvious: “competitive devaluation” .

Competitive devaluation is the official (and permanent) monetary policy of all the regimes of the Corrupt West. Let me restate this, so that the true insanity and criminality of this policy is explicit. All of our governments are racing to see which can drive down the value of its currency the fastest, i.e. which can “create inflation” the fastest – since lowering the exchange rate and creating inflation are two sides of the same coin.

Regular readers already know what inflation really represents: central bankers stealing our wealth through (deliberately) diluting the value of our currencies. We already have the written confession from the Dean of these inflation-thieves.

In the absence of the gold standard, there is no way to protect savings from confiscation [i.e. theft] through inflation.

- Alan Greenspan, 1966

Our governments are racing to see which can steal our wealth the fastest, through the monetary crimes of the central banks which rule above them . When will it end? When will our governments stop this race to steal our wealth?

Never. In fact (via the Corporate media), we are now being told by the central bankers that they plan on accelerating the race. “Helicopter money” , the scornful nickname given to the policy of deliberate hyperinflation by a monetary berserker named B.S. Bernanke, is now being openly touted as “the next step” in the monetary mega-crimes of the West’s central banks – along with the puppet regime of Japan.

Our corrupt governments are racing to see which one can create hyperinflation the fastest: driving the exchange rate of our currencies all the way to zero, stealing all of our wealth. The Traitor Governments of the West are not merely reckless as to whether they trigger hyperinflation in our economies, it is their economic objective.

Economic suicide is (supposedly) going to “fix” our economies. But the surreal insanity of deliberately engaging in suicide as a supposedly therapeutic economic measure is only the starting point in our journey Through The Looking Glass.

Once we arrive in Wonderland, we immediately encounter a choir of pseudo-economic zealots: the Deflationists. The inability of these charlatans to correct apply the principles of economics is only matched by their failure to comprehend the facts.

The Deflationists present us with the absurd hypothesis that no matter what level of monetary criminality is pursued by the West’s central banks (and Big Banks) as they seek to dilute our currencies to zero and steal all of our wealth, the criminals will fail. More than that, the Deflationists present the laughable assertion that as the bankers race to drive our currencies to zero that these fraudulent, fiat currencies will actually rise in value .

Regular readers are already familiar with the concept of dilution. It has been explained that the process of central banks diluting the (real) value of our currencies with their money-printing is economically identical to the process of a corporation diluting its share structure through printing new shares.

Imagine a Magical Corporation, where no matter how many new shares are created by management (even in near-infinite numbers), the value of those shares would never fall. This is the official position of the West’s central banks. They have been trying to “create inflation” across the West, they tell us, by conjuring near-infinite quantities of our fiat currencies, but (supposedly) failing to do so. Inflation is “too low” , they tell us, again and again.

Now imagine a Magical Corporation, where no matter how many new shares are created by management (even near-infinite numbers) that the value of the shares will rise. This is the position of the Deflationists. It is absurdly infantile.

Why? Why would these charlatans adopt the position that the worst Inflation Thieves in the history of our nations would fail to steal more of our wealth, even as the Thieves publicly announce their intentions to increase the scale and scope of their monetary crimes?

As their own title proclaims, the Deflationists are predicting that the same Inflation Thieves who have been successfully stealing our wealth for a hundred years would/will fail to steal more of our wealth because of “deflation”. The Deflationists point toward the massive debts and hopeless insolvency of Western regimes. They point to the extreme, unprecedented asset-bubbles which the central bankers have also created via their easy-money monetary crimes, and they shriek “deflation”.

There can’t be any inflation in our economies (let alone hyperinflation), they tell us, because when the debt-bubbles burst and the asset-bubbles burst there will be a massive deflation in our economies, and – they claim – we can’t have inflation and deflation simultaneously.

There are two rebuttals to this nonsense. The first is to introduce the Deflationists to a real economist (there are a few) named John Williams. It is now over a decade since Mr. Williams first published his brilliant essay (at Shadowstats.com) entitled “The Hyperinflationary Depression”. In that essay, he provides a detailed explanation as to how some segments of our economies can be crushed by deflation, while the rest of the economy is devoured by hyperinflation.

It is beyond the scope of this piece to review and repeat that theoretical argument. Suffice it to say (as was done in a previous commentary ) that hyperinflation can never be prevented via debt/deflation. Instead readers will be presented with a second rebuttal: empirical evidence which shows that our economies will not be allowed to deflate, not until after the central banks have completed their monetary crime of hyperinflation.

Throughout the first half of last year, during “the Greek crisis” , the government of Greece begged to be allowed to default on its sovereign debts, i.e. it begged to be allowed to deflate. For six months; the government begged to be allowed to deflate Greece’s economy, and for six months the central bankers who now completely control the EU refused. Eventually, Greek leader Alexis Tsipras was coerced/corrupted into abandoning his principles, and allowing the central bank criminals to bury his bankrupt nation under an even larger mountain of (unpayable) debt.

The Deflationists also need to be introduced to another widely-used phrase, of which they are apparently completely unfamiliar: “too big to fail” . When the One Bank crime syndicate bankrupted itself (deliberately) via the Crash of ’08, a few of its tentacles were sacrificed, for purely theatrical purposes. The rest of this oligopoly of crime was propped-up, through promises and guarantees totaling in the $10’s of trillions.

Since that time; “too big to fail” has been the official policy of all of the West’s puppet governments regarding the financial sector: no deflation allowed. The mega-debts and mega-bubbles of the Big Banks will never be allowed to deflate (until after hyperinflation has been detonated). As we saw with Greece, the mega-debts of our bankrupt governments will also never be allowed to deflate (until after hyperinflation has been detonated).

Pockets of our economies can and will experience (fully-contained) deflationary implosions: those not “connected” to the One Bank crime syndicate, and/or it will prune a few of its own tentacles – so that the remaining tentacles can cannibalize those assets and grow even larger. Outside of that, we already have the iron-clad promise of the banking Criminals, and the puppet governments they command: no deflation allowed.

To reiterate what was explained and demonstrated in Part I; the fiat currencies of the Corrupt West have already been hyperinflated (in the correct use of this term). The money supply of these fraudulent, fiat currencies has been diluted to worthlessness, in fundamental terms . The central banks and our governments have already promised to complete this hyperinflation spiral, through driving the exchange rate of our currencies to zero (and stealing all our wealth in the process).

The true meaning of hyperinflation has now been defined. The factors which have made this economic holocaust both inevitable and irreversible have now been explained. One task remains to be completed: the proof. If our currencies have already been hyperinflated to worthlessness in fundamental terms, where is the economic carnage (i.e. price spiral) which is the consequence of the exponential, ultra-extreme dilution of these fiat currencies?

This task will be accomplished in Part III. It will first be explained how-and-why there is always a time-lag between when a currency has been rendered fundamentally worthless, and the time when the official exchange rate of that currency reflects this worthlessness. It will also be explained how the banking crime syndicate has managed to extend this time-lag through assorted lies, manipulation, and other financial crimes.


Jeff Nielson is co-founder and managing partner of Bullion Bulls Canada; a website which provides precious metals commentary, economic analysis, and mining information to readers and investors. Jeff originally came to the precious metals sector as an investor around the middle of last decade, but with a background in economics and law, he soon decided this was where he wanted to make the focus of his career. His website is www.bullionbullscanada.com.


The views and opinions expressed in this material are those of the author as of the publication date, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.

Jim Lauder 3 years ago at 3:17 PM
Already looking forward to part III. (would I term that 'forward guidance?')
Jeff Nielson 3 years ago at 10:37 AM
Lol, thanks Jim!
E K 3 years ago at 12:46 PM
Good one Jeff! I find your views close to reality and your analysis accurate. Will look forward to part III
cliff 3 years ago at 10:08 AM
Great read and spot on. We are in a massive inflationary spiral right now for any asset associated with banking. Look at housing in Canada... it is absolutely mind boggling how anyone can claim that we have deflation when house prices in Vcr and Toronto are skyrocketing. Of course, this sector is banking related and the banks are on the hook for millions of overpriced homes, so deflation WILL NOT be allowed as long as they can manipulate it so.
Personally, I can't believe the extent of the manipulation in our financial markets by central banks. I can't believe they are allowed to do this, and I can't believe that the average person doesn't see it or even care to examine why their wages aren't going up 15% per year, but house prices are.

I relish and await with great anticipation the total financial crumbling of our system. It needs it, badly.
Jeff Nielson 3 years ago at 10:56 AM
Cliff, never underestimate the power of a propaganda machine. Preach certain themes of propaganda, consistently, and you produce brainwashing. This is especially true when dealing with a PASSIVE AUDIENCE which does not even realize it is under psychological attack.

This is why taking control of our media was one of the first and highest priorities of the One Bank -- a hundred years ago. That's when the banking crime syndicate first acquired control of the vast majority of all newspapers. When TV news came along, it ALREADY controlled the TV networks.

For one hundred years we have been brainwashed. For reasons which differ from person to person, a small number of people have either managed to break this mind-control, or resist it all together.

My great fear is that even the terminal collapse of our present system may not be sufficient to deprogram the Zombies. The Puppet Masters may simply take control of the System which rises out of the ashes -- but with a new cast of puppets, and new ideological labels for the Puppet Theater.
scooter 3 years ago at 2:52 PM
Jeff---as the government prints fiat they are using it to buy the debt and control the assets of the nation including much of the real estate. Isn't one of the tenets of communism to own everything. What a sneaky way. By printing money and buying bonds with that phony fiat paper, real estate debt will be in their hands. So, they will be charging the people to pay for handing over their debts to the government, and when they crash the mess, they will own all the defaulting property covered by that paper, and the people will be on the hook for both their debt and the government's which was used to buy their debt and relieve the shyster banks holdings in bad paper.

Meanwhile, instead of shutting down the shysters and defaulting on the con, we have politicians enabling and profiting off the disaster who are in charge of this gutting of the country. All this under the implicit nirvana umbrella of fairness and globalism, a conspired con from Lucifer to establish his worldwide takeover. Never forget his goal---to steal, kill and destroy everything in his path.
Jeff Nielson 3 years ago at 3:48 PM
Scooter, we have programmed, brainwashed, and drowned in the ideological labels continually parroted by the Idiot Ideologues. None of these words MEANS ANYTHING.

The only regime that has been labeled as "communist" which was anything close to Marx's THEORETICAL work is Cuba. A small population, and an island economy. It was then economically isolated by the United States, thus operating in more-or-less a closed system.

Beyond such an extreme parameters, communism has never existed in anything close to a "pure" form. Think FASCISM: government-by-crime-syndicate. This is the one "ism" which DOES exist in pure form -- because it represents the most base form of political oppression. The Have's stealing from the Have-not's.

"Globalism" is another mean-nothing ism. "Free trade" is more, pure mythology since the proponents of this mythology (literally) don't even understand what free trade really represents. So if you like labels, "Lucifer" is as good as any other -- provided that what you MEAN when you use the label is the banking crime syndicate.
kinley 3 years ago at 11:39 AM
Dear Mr Nielson
Is there a missing component in the discussion of inflation/deflation, which makes this topic confusing? When a central bank creates $1 of "money" via lending, it actually creates TWO dollars: one dollar as a $1 currency note to the "borrower", and a second dollar as a $1 IOU note to the "lender". Since BOTH the currency dollar and the IOU dollar can be either spent or traded (central banks have been accused of trading on these IOUs), the central bank's action of "lending" $1 has in reality increased the money supply by $2.

Default of this central bank loan would seem to render the IOU worthless, which would remove the $1 IOU from the money supply. However, the $1 currency note persists. Thus, despite the IOU deflation the money supply has still been expanded by the central bank's currency note.
Jeff Nielson 3 years ago at 10:29 AM
Sorry for the late reply, Kinley.

The debt and the dollar are all the SAME instrument. This is the bait-and-switch which has taken place in our monetary system.

Our currencies used to be MONEY, units of VALUE, backed by gold. When the gold-backing was stripped away, the banking crime syndicate began to literally borrow our currencies into existence (as you point out).

When our governments did this, our currencies became IOU's -- i.e. units of OBLIGATION. It is this obligation which provides this funny-money with quasi value.

Yes, with our governments all insolvent, the IOU's (and thus the funny-money itself) has little-to-no value, and that is even before we also factor in the open monetary fraud called "quantitative easing".

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