INflation, DEflation, HYPERinflation

from my friend Koot on Marketwatch. I will have to investigate and read more later, but wanted to record this.
sbenard, thanks for the kind words. I believe one of the articles that I posted was from Ron Hera of Hera Research LLC. Bernankes Delemma.
--------------------------------------------------------------
http://www.heraresearch.com/images/Bernankes_Dilemma_Hyperinflation_and_the_US_Dollar_20100309e.pdf

http://www.heraresearch.com/

"Rather than a crisis of confidence, hyperinflation results from a crisis of credibility.
Hyperinflation results when the social, legal and political structures that create the value of paper
money break down. When a government borrows excessively and its promises to repay are
contradicted by mathematical realities, the value of its currency cannot be maintained. If a
government so lacks credibility that it cannot issue bonds because there are no buyers other than
its own central bank, the value of its currency declines faster than money is printed to cover its
obligations. Perhaps the most important indicator of impending hyperinflation is whether the
statements of a government or of its central bank, e.g., with respect to the government’s budget or
the central bank’s balance sheet, are evidence based or ideological. If they are not evidence
based, the credibility of the government or central bank, and its currency, will weaken and
eventually fail."
----------------------------------------------------
There were other articles related to the difference between supply demand type inflation-deflation and loss of trust or credibility of government caused hyperinflation. Many people believe a country goes from inflation to hyperinflation but that is not what happens. What happens is a country goes from a credit crisis and loss in credibility of government type deflation directly into hyperinflation, Zimbabwe, Wiemar, et. al. Like Ron explained when people and other nations no longer trust the words or credibility of government or central banks currency, everyone seeks other places of holding their money even if the nation is in a depression.