It’s Always A Confidence Game

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QUESTION: I don’t understand the page 11 comments about German Hyperinflation and that it took place because capital was being hoarded and there was no lending?????

Can you clarify how price hyperinflation occurs if no one is spending or lending.

RESPONSE: 

Because people were hoarding real money so there was none to be deposited in banks and thus there was a shortage of internationally accepted money. The Wiemar Republic was a communist revolutionary government that did not have the ability to borrow for who would lend anything to a government that was rejecting capitalism? Therefore, it was the complete lack of CONFIDENCE in the government that (1) caused the hoarding, and (2) caused the complete lack of credit preventing any bond issues. Consequently, the government could ONLY print money.

But the KEY that is overlooked is CONFIDENCE. All we hear is how the US will go into hyperinflation because of the Fed’s monetization. That is gibberish. Ask the average American if they trust government and the answer is still YES! Hyperinflation requires the wholesale collapse in the CONFIDENCE of government. That is not likely. We must crash and burn before that will happen. It is not what YOU believe, it is what the MAJORITY believe and they are NOT on board yet with the full collapse in CONFIDENCE in government.