Hyperinflation: A Currency Event

By: Gordon Long | Thu, Mar 14, 2013
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First and foremost HYPERINFLATION is a Currency Event. Prices rise because it becomes widely understood that the currency is being intentionally debased and it is no longer a store of value.

Secondly, Hyperinflation is not a protracted affair. It happens very quickly, causes massive dislocations and social upheaval, but is over in a relatively short period of time. Often measured in weeks and months. However, the devastation it wrought is felt for decades and generations.

Hyper-inflationary is considered as starting in the month that the monthly inflation rate exceeds 50%, and it ends when the monthly inflation rate drops below 50% and stays that way for at least a year. These percentages seem almost inconceivable, but nevertheless the reality for the 56 documented examples of Hyperinflation are:

Additionally none faced the almost inconceivable headwinds of:

"This first stage of the inflationary process may last for many years. While it lasts, the prices of many goods and services are not yet adjusted to the altered money relation. There are still people in the country who have not yet become aware of the fact that they are confronted with a price revolution which will finally result in a considerable rise of all prices, although the extent of this rise will not be the same in the various commodities and services. These people still believe that prices one day will drop. Waiting for this day, they restrict their purchases and concomitantly increase their cash holdings. As long as such ideas are still held by public opinion, it is not yet too late for the government to abandon its inflationary policy." Ludwig Von Mises


Velocity of Money

During Hyperinflation, Money Velocity explodes upward as everyone attempts to get the remaining purchasing power out of their money before it disappears. Presently however Money Velocity is plummeting.

Why hasn't hyperinflation already arrived?

The is because of FEAR, due to the current business climate, eroding earning potential, existing malinvestments & debt levels and the ongoing destruction of capital. We have a Crisis of Trust also occurring.

Fear due to current business climate

Hyperinflation is not imminent, but it is clearly on the horizon.

Escalating Currency Wars are a strong indicator of its approaching presence.


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Gordon Long

Author: Gordon Long

Gordon T. Long
Publisher - LONGWave

Gordon T. Long

Gordon T. Long has been publically offering his financial and economic writing since 2010, following a career internationally in technology, senior management & investment finance. He brings a unique perspective to macroeconomic analysis because of his broad background, which is not typically found or available to the public.

Mr. Long was a senior group executive with IBM and Motorola for over 20 years. Earlier in his career he was involved in Sales, Marketing & Service of computing and network communications solutions across an extensive array of industries. He subsequently held senior positions, which included: VP & General Manager, Four Phase (Canada); Vice President Operations, Motorola (MISL - Canada); Vice President Engineering & Officer, Motorola (Codex - USA).

After a career with Fortune 500 corporations, he became a senior officer of Cambex, a highly successful high tech start-up and public company (Nasdaq: CBEX), where he spearheaded global expansion as Executive VP & General Manager.

In 1995, he founded the LCM Groupe in Paris, France to specialize in the rapidly emerging Internet Venture Capital and Private Equity industry. A focus in the technology research field of Chaos Theory and Mandelbrot Generators lead in the early 2000's to the development of advanced Technical Analysis and Market Analytics platforms. The LCM Groupe is a recognized source for the most advanced technical analysis techniques employed in market trading pattern recognition.

Mr. Long presently resides in Boston, Massachusetts, continuing the expansion of the LCM Groupe's International Private Equity opportunities in addition to their core financial market trading platforms expertise. GordonTLong.com is a wholly owned operating unit of the LCM Groupe.

Gordon T. Long is a graduate Engineer, University of Waterloo (Canada) in Thermodynamics-Fluid Mechanics (Aerodynamics). On graduation from an intensive 5 year specialized Co-operative Engineering program he pursued graduate business studies at the prestigious Ivy Business School, University of Western Ontario (Canada) on a Northern & Central Gas Corporation Scholarship. He was subsequently selected to attend advanced one year training with the IBM Corporation in New York prior to starting his career with IBM.

Gordon T Long is not a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. Of course, he recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and barring that, we encourage you confirm the facts on your own before making important investment commitments.

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