So what exactly is a debauched currency, how is it related to hyperinflation and where does Silver Bullion lie in this equation?
First of all let’s look at what a debauched currency is. Basically a currency and this goes for any paper fiat currency is debauched by the continuous printing of the currency without any real assets to back it. Thus is the case with the current U.S Dollar where the Federal Reserve continues to print its fiat currency by monetising the debt that is being accumulated by the American Government.
This process of inflating the fiat currency supply without having any true worth behind it always results in the costs of goods and services rising against the inflated currency. This is referred to as inflation, whereby it takes more and more money over a period of time to purchase the exact same products and services that you have always purchased.
Inflation by definition is a hidden tax that we all pay for due to the irresponsible fiscal policies of our governments.
In economics, hyperinflation is inflation that is very high or “out of control”. While the real values of the specific economic items generally stay the same in terms of relatively stable foreign currencies, in hyperinflationary conditions the general price level within a specific economy increases rapidly as the functional or internal currency, as opposed to a foreign currency, loses its real value very quickly, normally at an accelerating rate.
Definitions used vary from one provided by the International Accounting Standards Board, which describes it as “a cumulative inflation rate over three years approaching 100% (26% per annum compounded for three years in a row)”, to Cagan’s (1956) “inflation exceeding 50% a month.” As a rule of thumb, normal monthly and annual low inflation and deflation are reported per month, while under hyperinflation the general price level could rise by 5 or 10% or even much more every day.
A vicious circle is created in which more and more inflation is created with each iteration of the ever increasing money printing cycle.
Zimbabwe 100 trillion 300×150 Silver Bullion, Hyperinflation and a Debauched Currency
Hyperinflation becomes visible when there is an unchecked increase in the money supply, as outlined in our video above, usually accompanied by a widespread unwillingness on the part of the local population to hold the hyperinflationary money for more than the time needed to trade it for something non-monetary (silver and gold) to avoid further loss of real value. Hyperinflation is often associated with wars (or their aftermath), currency meltdowns, political or social upheavals, or aggressive bidding on currency exchanges.
Root Causes of Hyperinflation
The main cause of hyperinflation is a massive and rapid increase in the amount of money (including bank credit, deposits, and currency) that is not supported by a corresponding growth in the output of goods and services. This results in an imbalance between the supply and demand for the money, accompanied by a complete loss of confidence in the money, similar to a bank run. This loss of confidence causes a rapid increase in velocity of spending which causes a corresponding rapid increase in prices. Once inflation has become established, sellers try to hedge against it by increasing prices. This leads to further waves of price increases.
Enactment of legal tender laws and price controls to prevent discounting the value of paper money relative to gold, silver, hard currency, or commodities, fail to force acceptance of the rapidly increasing money supply which lacks intrinsic value. If the entity responsible for increasing bank credit and/or printing currency promotes excessive money creation, with other factors contributing a reinforcing effect, hyperinflation usually continues. Often the body responsible for printing the currency cannot physically print paper currency faster than the rate at which it is devaluing, thus neutralizing their attempts to stimulate the economy.
Hyperinflation is generally associated with paper money, which can easily be used to increase the money supply: add more zeros to the plates and print, or even stamp old notes with new numbers. Historically, there have been numerous episodes of hyperinflation in various countries followed by a return to “hard money, like silver and gold”. Older economies would revert to hard currency and barter when the circulating medium became excessively devalued, generally following a “run” on the store of value.
Don’t leave it till the last minute to try and convert you debauched fiat currency into hard assets like silver and gold.
Do it now, before you lose all of your current and future purchasing power.