Philip Pilkington on the Myth of Hyperinflation

First, you need only look at the video below to see the kind of hysterical craziness that was unleashed after the crisis of 2008 and the turn in the Western world to that most misunderstood of policies: quantitative easing.



According to the Austrian economics-inspired crank Marc Faber, hyperinflation in the US was “100% certain,” no less!

Well, we are still waiting for that alleged hyperinflation.

Philip Pilkington has an old but wonderful post here that really is one of the best refutations of this nonsense I have ever seen:

Philip Pilkington, 2013. “Hyperinflation! The Libertarian Fantasy That Never Occurs,” Nakedcapitalism.com, March 6.

The answer is, quite simply, that Austrians and hyperinflation cranks do not – and have never – understand real world capitalism.

Their economic models and assumptions are virtually worthless, and they have never understood the role of administered prices/mark-up prices, excess capacity, and stocks/inventories in modern economies.

I advise them to read Nicholas Kaldor’s classic Economics Without Equilibrium (Armonk, N.Y., 1985), simply one of the best short introductions to real world capitalism you will find.