Posted on August 23, 2015 by Martin Armstrong
The hyperinflation that is being focused on in the press of late in VENEZUELA illustrates the real causes behind such events – the total collapse in the confidence of government. It is not a question of money supply for that puts the cart before the horse, As confidence collapses, people trust the government less and turn to using the currency of neighboring countries. This was the outcome on the hyperinflation that hist Germany following World War I and other Eastern European countries as well as Zimbabwe. As the confidence collapses, that is what causes the government to issue more and more money. Those who survived such events rely upon tangible assets and the currency of neighboring economics.
This is why the dollar is rising right now, It is not that the entire world is moving into hyperinflation, it is that the confidence in Emerging Markets and Europe is declining. As that unfolds, there ONLY game in town to park money becomes the US dollar.
This entry was posted in Uncategorized by Martin Armstrong. Bookmark the permalink.