Here's your answer:

....because fiat money ceases to be accepted as a medium of exchange


Start putting the pieces together or you'll get hurt. You're looking for conventional solutions to a very unconventional problem. When fiat money dies, the concepts of inflation or deflation become moot.

And for the tsunami of inflation question, READ all my posts on here, and the answer you are looking for has already been posted.

charlatan, I'm starting to think that your forum name suits you.

It's amusing that you think that 1) our banks have collapsed and 2) the global financial system and FIRE economy has collapsed but "in 1) and 2) fiat money has not yet died. the value of one currency has plummeted". To say that this comment is naive is an insult to all naive people out there.

If 1) and 2) happens (the choice of the word COLLAPSE was not accidental) chaos ensues, savings are lost, pensions are lost, workers in virtually all industries get laid off by the hundreds of thousands, the broad "economy" collapses, food and fuel shortages ensue, the government collapses and people are rioting in the streets. The collapse is not orderly and imagine this happening on a global scale. FIAT MONEY DIES RIGHT THERE AND THEN, it's not just "the value of one currency has plummeted".

Hyperinflation will occur in the final days/hours of the ensuing chaos and confusion as people will try to either acquire items in an attempt to preserve/save some of their wealth (gold, silver, collectible fine art) at any price, or food at any price. The problem will be that within the same period of the time any sellers of such items will quickly come to the realization that all paper money is worthless.

I think you grossly underestimate the catastrophic impact of a global banking system collapse. If there ever was an armageddon scenario besides nuclear bombs raining on our heads, this would be it.

I'm not sure what thread it's on and I don't have the time nor the inclination to go looking for it just to satisfy you but my previous posts on "tsunami of inflation" included information on the massive commodity price increases we have witnessed in 2010 and the assertion that inflation is with us NOW (ignore CPI, pay attention to your bills) and massive inflation is making it's way through the system, to be here in 3-6 months once existing inventories get depleted and the price increases make their way through the system.

If you're too lazy to bother reading other threads on here don't make it my problem.

One more post then I'm off.

I never claimed that 1) & 2) happen because fiat money dies, and then changed my mind to say it was the cause, thus a "red herring" as you claim.

What I said was that 1) & 2) will happen IF the USD collapses.

And if you can't see the difference in this, then you should be posting on a financial forum.

uSA announces it has the LOWEST inflation  since 1958.Chance of hyper is now less than blot.

i find the diametrically opposed view points on such a large issue so interesting.

Clearly there are those on here that know more on the technical components of deflation and hyperinflation than i.

However put simply, that fact that ALL fiat money systems eventally fail, one must conclude fail only because of hyperinflation or runaway inflation or anything of the kind where the faith in 'nothing than a piece of paper and ink' is lost.

Therefore, it must happen eventually its just a matter of when. Given the precarious positon of the US debt(s), its reserve banks chairmans paradigm of printing money as a cure to deflation and many other factors right now seems a likely time this could eventuate.

Finally people like Peter Schiff, Mark Faber and other Austrian economist are adamant very high inflation is on the way.

Ben Bernake and the likes of Paul Krugmen think otherwise.

Ill stay in the high inflation-be careful of hyperinflation camp.

It's amusing that you think that 1) our banks have collapsed and 2) the global financial system and FIRE economy has collapsed but "in 1) and 2) fiat money has not yet died. the value of one currency has plummeted". To say that this comment is naive is an insult to all naive people out there.

they were merely hypothetical questions following your reasoning. so now you are effectively asserting that you are naive. i'm just asking a question, trying to gain a coherent response from you. does that make me naive?

If 1) and 2) happens (the choice of the word COLLAPSE was not accidental) chaos ensues, savings are lost, pensions are lost, workers in virtually all industries get laid off by the hundreds of thousands, the broad "economy" collapses, food and fuel shortages ensue, the government collapses and people are rioting in the streets. The collapse is not orderly and imagine this happening on a global scale. FIAT MONEY DIES RIGHT THERE AND THEN, it's not just "the value of one currency has plummeted".

you can't say x ensues so y happens right there and then, unless x ensues instantaneously but it doesn't as you admit below.

more importantly you still don't explain the mechanism by which money being destroyed decreases the value of that which remains. you simply assert it over and over again.

also i'm intrigued by your assumption that the government would collapse.

Hyperinflation will occur in the final days/hours of the ensuing chaos and confusion as people will try to either acquire items in an attempt to preserve/save some of their wealth (gold, silver, collectible fine art) at any price, or food at any price. The problem will be that within the same period of the time any sellers of such items will quickly come to the realization that all paper money is worthless.

and now here it happens in the final hours of a period of chaos. earlier on in that period clearly the fiat money (other than the dollar) wasn't worthless. you are naive. qed.

I'm not sure what thread it's on and I don't have the time nor the inclination to go looking for it just to satisfy you but my previous posts on "tsunami of inflation" included information on the massive commodity price increases we have witnessed in 2010 and the assertion that inflation is with us NOW (ignore CPI, pay attention to your bills) and massive inflation is making it's way through the system, to be here in 3-6 months once existing inventories get depleted and the price increases make their way through the system.

i wasn't after an explanation (i've read all that in other threads as you say), merely a timescale and a magnitude.

now i have the timescale please tell me what level UK inflation will be in 3-6 months (let's make it 30 june to simplify matters) according to whichever scale you choose to name (including my bills if you like: rent going nowhere (very similar flat below has been void for over six months and they aren't asking for any more rent than i signed up for nearly three years ago), council tax frozen and that's the majority of my expenditure accounted for already).

If you think hyperinflation is imminent, what should be the plan of attack?  Get as much debt as you can?  buy as much property as you can (if you can get the finance)?

Why would you waste your time reading the fed's minutes?

^

another day gone by and you still haven't locotated your cojones.

inflation down this month....no sign of the tsunami which is apparently due to hit in the next two months.

of course inflation isnt 4% - the heavily manipulated CPI figure is 4% (they are probably manipulating it more heavily than ever atm), real inflation is probably closer to 6 or 7%. when u factor in that wages are practically static it means the common man is going to be penniless in a few short years

charlatan, good to hear from you. I was starting to think you got evicted by your landlord, or something nasty thing like that.

I'll keep things simple for you. Neither the FED nor the BoE can raise rates because it they do EVERYONE BLOWS UP. And I mean everyone, the banks, hedge funds, pension funds, home owners, entire sovereign nations, EVERYONE, the whole house of cards. So in order to give the BoE cover, voila, just like magic, a rabbit out of a hat, a Gov't manipulated CPI number telling us inflation is decreasing. If you believe that, I have a nuclear plant in Japan in need of some minor repairs that I can sell you at an excellent price. Sea front property too, it's just that you may have to wait about 25,000 years before it can be developed.

Actually charlatan, I could even show exactly where the numbers got "massaged" to produce the desirable outcome but since you haven't been a good sport, I'll let you figure it out on your own.

Hint:
1.Yet another "new" basket of goods in calculating CPI (ipad apps???dating agency fees???), how convenient ! Let's throw out things are that getting more expensive and replace them with items with a price which is certain to go down as the economy worsens. Brilliant.
http://www.thisismoney.co.uk/news/article.html?in_article_id=525635&in_p...
2.CPI Weightings suggest 10.8% is spent on food.Really??? It also suggests amount spent on transportation has remained unchanged for over 10 years. Big really??? Average household income is just below £30k, which means 10.8% about £3,200 for the average household to spend on food, or £62 per week: http://www.statistics.gov.uk/articles/nojournal/weights-article-2010.pdf
3.Average number of people/household in 2002 was 2.36, so we'll say 2.30 for 2010. Which means, on a per-person basis, the average person has 62 / 2.30 = £27/week to spend on food. Hmmmm.....
http://www.statistics.gov.uk/census2001/profiles/commentaries/housing.asp


You see charlatan, when the Gov't publishes numbers totally contrary to reality, some of us think critically and investigate. Others it appears, not so much....

Do drop in on occasion however, we all miss you here.

MrBean, here's another offer:

If you post the methodology that UK National Statistics uses to calculate CPI correctly, I WILL NOT POST ON THIS FORUM AGAIN. Otherwise, we'll know what we already know that you are commenting and being belligerent on subjects on which you are blissfully ignorant.

Ball squarely in your court, benny.

its like shooting fish in a barrel with you melly. Just push the buttons and there you are. Too stupid to realise whats going on.

charlatan, we've been down this road before. If you don't think we are not in the midst of a MASSIVE inflation spiral, that's fine by me. I'm not here to force my opinions on anyone, especially those FIXATED into laughable deflation positions like you, and insist on drawing  their conclusions as to what is happening to the economy at large based on their own limited (and in your case rather poor - literally ) experiences.

I'm responsible to managing my own money and protecting my own wealth so that my family's well being and my two young daughters financially independent future is guaranteed. That's the only place where I put my cojones on the line, not convincing idiots like you how to survive.

My estimate is that REAL inflation in the UK right now is running close to 10pc. That's MASSIVE. It's your prerogative to continue to believe the National Statistics fabricated figures. I hate to be so cold about it, but it's not my family that will suffer from that false and blind faith, but rather yours. The best I can do for you is to wish you good luck.

not sure there will be another world reserve currency

china doesnt have lots of gold reserves, so how on earth you can forecast a gold backed yuan..
on top, the yuan is one of the ccies whose m3 grew faster in the last couple of yrs ( hence their monthly hike in the rrr ), so unless you re imagining a world without 'credit' your suggestion isnt credible.
the imf just published that the amount of gold in circulation ( included the private possessions ) is a mere 166k tons, something like 7 trn dlrs worth. more than half is in jewellery, some is used in industrial processes. assume 1 to 2trn are in reserves. china will be able to buy some from smaller countries, but will never get the gold from the usa russia switzerland and i wd even think europe ( germany and italy got massive amounts, france not too much behind ).
so what sort of ccy can be backed by gold holdings of just -hypothetically- 1-200 billions?

according to imf 8000 tons roughly, and yes last audit was in the 50s.
still, what s got to do with what i posted for j2blue? if anything reinforces the fact that a gold backed ccy not only would be antieconomical and bring the world down to a secular depression, but also shows the fact that it cannot be created.

by the way, china has 1000 tons, 400 of which added in last year ( without official purchases..), and of course no auditing on their side as well.

china declared their reserves in gold at 1000 tons just a few months ago.
if you dont trust their numbers, that they unilaterally declare, how would you trust then their gold-backed ccy once it comes to existence? you just killed your own argument, if you can realize it.
ps i have no cares in the world to guess how much gold china s got to the ounce.
i know only that roughly the value of all gold ever mined is 7 trn dollars, that 55% of it is in jewellery, 15% of it in industrial usage, and the rest is spread around the world banks, and that includes whats  privately owned in vaults.