Why can’t hyperinflation be fixed by creating a new currency? or just stop printing?
In: 101
>Why can’t hyperinflation be fixed by creating a new currency?
That IS how they fixed a lot of cases of hyperinflation. There are some problems with that, like telling everyone the cash they’re getting paid with today is going to be literally worthless in 6 months once you get done printing the new one. Or how once you have a new currency, everyone knows you’re just going to start printing more and more and eventually “fix it”.
>or just stop printing?
Bingo. This is the real solution. BUT, usually the governments that are printing money are doing so because they need to pay people. And it doesn’t just magically fix everything instantly. There’s lag. People have to adjust their expectations and clam down.
The US federal government would be almost completely non-functional if they had to suddenly have a balanced budget. Even if they had a couple years to plan.
Latest Answers