Hyperinflation Australian style

Any offense to historical figures depicted in this parody is unintended, reproduced for educational purposes.

Any offense to historical figures depicted in this parody is unintended, reproduced for educational purposes.

Posted on June 6, 2013, in Meme, Monetary system and tagged , , . Bookmark the permalink. 3 Comments.

  1. Many reasons for inflation, and I think I hit at one of the leading causes in a cartoon I did the other year.

    It’s here on my blog………..

    http://cartoonmick.wordpress.com/editorial-political/#jp-carousel-623

    Cheers

    Mick

    • Despite what Reserve Bank of Australa economists will try to tell you about the cause of inflation. this is what really causes it. RBA will claim inflation is caused by prices rising, this is not true rising prices is the result of inflation not the cause. Inflation (of the money supply) is caused but the RBA printing more money. The fact that 97% of out money is digital (existing only on a computer screen) makes printing fiat currency as cheap and easy as entering a number into a computer.
      ————
      For the mathematically interested:

      Inflation = PiQi / PoQo (for a standard bundle of consumer goods and services, measured 1 year apart)
      P Price
      Q quantity

      1.01 will mean 1% inflation, 0.98 will mean 2% deflation

      ————-
      Pt x Qt = M x V

      Pt total money spent
      Qt total quantity purchased
      Pt x Qt total monetary value of all sales in the economy.

      M Money supply (money in circulation)
      V Velocity of money (average number of times each dollar is spent)

      So if we assume the velocity of money stays largely constant, an increase in the Money supply will increase the monetary value of sales.
      printing money creates inflation and the rise in prices.
      Some inflation is due to prices rising but the majority of the effect in general is the endless printing of worthless fiat currency.

      ———

      To complex or too many assumptions?

      Money like anything else has some level of value based on scarcity.
      the more money there is the less valuable it is, the more you will need to purchased the same physical product or service.
      If every third rock was solid gold no one would value gold very much.

    • Hi, just had a look at your hilarious cartoons. GOLD!!

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