When Deflation Becomes Hyperinflation

Hard assets possess a virtue which is almost beyond the comprehension of most of us, in our debt-saturated lives. They are not encumbered by debt, meaning (as more elementary logic/arithmetic) they cannot go to zero in value. What then will be the "price" of those assets, denominated in absolutely worthless fiat currencies?

It is essentially a nonsensical question. One can "buy" nothing with a worthless currency, which is simply another way of saying that the "price" of hard assets will (quickly) soar to infinity. This is what economic theory (and simple arithmetic) tells us must happen with any exponential spiral in money-printing. This is what empirical evidence tells us has happened in the many hyperinflation episodes in history.

The simple fact that our nations are bankrupt cannot give worthless currencies value. The same level of money-printing which must result in hyperinflation in a solvent economy will also result in hyperinflation in an insolvent economy. This is the point of logic entirely lost in the inane inflation/deflation "debate".

Conversely, hyperinflationary money-printing cannot prevent a debt-default implosion. If this was true; then we would have never seen any sovereign nation go bankrupt. Deadbeat nations would simply keep printing, and printing, and printing their worthless paper until they became "solvent".

[link to etfdailynews.com]