Deflation as a Leading Indicator of Hyperinflation

April 14, 2012

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German Marks Per Ounce of Gold $GLD Look how quick it happened ~ 2-3 years; also, note the deflation first. 

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The path to hyperinflation is deflation, or perhaps hyperdeflation. Think about Greece for a moment: they’ve had five years of wage deflation and your average economist is going to extrapolate this to infinity. But what if Greece defaults, delinks, and devalues; suddenly, they have something much different.

Exported Inflation to Return Home, but When and  

Deflation Does Not Lead to a Depression

 

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