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The precursor to Hyper-inflation

Source: http://feedproxy.google.com/~r/YourFinancialFuture/~3/n4kYdUXKdvs/
Posted on Tuesday, September 22nd, 2009 | In Gold Markets
Contributed by: Alex Stanczyk (http://rapidtrends.com/blog) -

Woman uses currency to heat house during german hyper-inflationWoman uses currency to heat house during german hyper-inflation

Many do not know what triggers hyper-inflation. It is a monetary event.

The thing that history shows leads up to it, is the rampant printing of money, often buying or paying off the governments own debt (instead of another country or central bank buying it).

This is known in economics parlance as “Quantitative Easing”

From wikipedia:

The term quantitative easing describes an extreme form of monetary policy used to stimulate an economy where interest rates are either at, or close to, zero. Normally, a central bank stimulates the economy indirectly by lowering interest rates but when it cannot lower them any further it can attempt to seed the financial system with new money through quantitative easing.

In practical terms, the central bank purchases financial assets (mostly short-term), including government paper and corporate bonds, from financial institutions (such as banks) using money it has created ex nihilo (out of nothing).

If you think it cant happen in the USA, please do more research.

I am protected against such an event. Are you?

Last 5 posts by Alex Stanczyk





About Alex Stanczyk (http://rapidtrends.com/blog)
Alex Stanczyk is the editor of Your Financial Future. Mr. Stanczyk has launched numerous businesses, acted as the CEO of a Publicly Traded US Company, and brings over 21 years of business experience to YFF. He has authored numerous articles, mentored hundreds in personal finance and wealth building, and spends at least 4 hours each day studying the global markets, drawing insight and conclusions from the flows of global commerce. As an Affiliate of Anglo Far East Bullion Company, Mr. Stanczyk specializes in teaching foundational principles of money, the gold market, and why gold has been a storehouse for wealth for thousands of years.

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