AlexR

The American Crisis and the Case for an Inflationary Depression

Unfortunately there are no examples of a Inflationary Depression in U.S. history. Somebody should study what happened to South American economies from 1982 thru 1992 or so. I've personally experienced sustained inflation rates of up to 250% (10%/month), and I can tell you, it's not as socially destabilizing as you might think. Everyone from rich to poor figures out some surprisingly clever ways to manage through it. The only long-term effect is a population that abominates debt of any kind, for about to 10-15 years after recovery (note, although fixed-rate borrowers get a nice bonus in the initial phase of an inflationary spiral, lenders have the last laugh as foreign-currency and commodity-linked loans quickly become the norm).