Posted Aug 10, 2013 by Martin Armstrong
QUESTION: Does “Europe” constitute a new/revolutionary state and is therefore liable to Hyperinflate?
ANSWER: No. The revolutionary type government such as Germany with its Communist Revolution in 1918 do not honor the debt of the previous government and was unable to sell bonds. Therefore, it lacked the confidence of capital and sent capital fleeing and into hoarding of all tangible wealth. There still remains bond markets in Europe so people still have confidence in government. Nevertheless, as you see, they are adopting the BAIL-IN and thus become very aggressive against their own people destroying the economy. This is how major economies collapse because they try to hold on to power. Hyperinflation emerges when there is no previous structure to try to preserve because everything is thrown out. They are left only with the power to create money and try to dictate its value (fiat) when there is not confidence in the survive-ability of government as an entity.
In Hyperinflation all tangible assets retain value such as gold, shares, and property. In Deflation, the government sucks in everything raising taxes etc so that people simply migrated out of Rome (suburbium) walking away from property. This is when movable v immovable assets are distinguished. The further you go down this path, the more basic money becomes. You can pass the point where shares and property fail, then gold fails, and finally we arrive only at food. These are the stages of Deflation to the point you enter a Dark Age. Unfortunately, what we face is far worse and this is why I say you will pray for hyperinflation before they are done with this. Socialism is collapsing. The Bail-IN and the NSA proves that. It is no longer a government to protect the people and make things fair, it is they rule and it is about them retaining the reins of power.
I can only hope that if enough people begin to see this distinction whereby DEFLATION is far more dangerous than HYPERINFLATION, then perhaps we will blink and save the day before a Dark Age emerges. If not, we end in civil war and the Mad Max outcome. Hyperinflation would be paradise because it is survivable. Deflation is not – the total annihilation of society and all the threads that bind it together are placed at risk when we choose the path we are on. This is a HUGE difference. Those preaching hyperinflation have to stop the nonsense for this propaganda serves no one but government by assuming they can remain in power as is of we just tweak things a bit and end fiat currency. Good on. But there is NOT a single incident in history where such a solution has every worked.