It's simple if you think about it...
Hyperinflation basically wipes out all debt as the value of currency collapses.
Money becomes almost worthless - the second picture on the top right shows that in Weimar, Germany the hyperinflation devalued the German Mark so much that it was more economical to burn the banknotes than use them to buy firewood or coal. The woman in the picture is doing just that.
Suppose you have a $100,000.00 mortgage.
The dollar becomes so devalued, that a loaf of bread costs, say, $100,000.00 - so you are on your way to the store to buy two loaves of bread... you can simply opt out of one and use the money to pay off your $100,000.000 mortgage on the way to the store.
This has happened not just once in Weimar, Germany, but periodically throughout the world, most recently and famously in Zimbabwe.
Hyperinflation Has Occurred in 21 Countries Over the Past 25 Years.That’s nearly 1 country every year!
This time, it is setting up to be a global catastrophe, as all currencies have long ago become 'fiat currencies', and all banks under Basel II are allowed to be technically insolvent - with accounting tricks allowing them to bend and stretch to reach a disturbing 8% capital to overinflated assets ratio.
It can't happen here...
Hyperinflation has recently occured here:
1. Angola (1991-1999) - new kwanza = 1,000,000,000 pre-1991 kwanzas.
2. Argentina (1975-1991) - 1 new peso = 100,000,000,000 pre-1983 pesos.
3. Belarus (1994-2002) – 1 new ruble = 2,000 old rublei.
4. Bolivia (1984-1986)
5. Brazil (1986-1994) - 1 (1994) real = 2,700,000,000,000,000,000 pre-1930 reis.
6. Bosnia-Herzegovina (1993) – the highest denomination was 10,000 dinara in 1992 and 10,000,000,000 dinara in 1993.
7. Bulgaria (1991-1997) – A currency board established in July 1997 slashed three zeroes off the currency.
8. Ecuador (2000)
9. Georgia (1995) – 1 new lari was exchanged for 1,000,000 laris.
10. Madagascar (2004)
11. Mexico (1994)
12. Nicaragua (1987-1990) – 1 old Cordoba = 5,000,000,000 pre-1987 cordobas.
13. Peru (1984-1990) – 1 nuevo sol = 1,000,000,000 pre 1985 soles de oro.
14. Poland (1990-1993) – 10,000 old zlotych were exchanged for 1 new zloty.
15. Romania (2000-2005) - 10,000 old lei = 1 new leu
16. Russia (1992-1994) - In 1993 the annual rate was 840%
17. Turkey (1990′s) - New Turkish Lira; 1 was exchanged for 1,000,000 old lira.
18. Ukraine (1993-1995) – 100,000 karbovantsivi = 1 hryvnya
19. Yugoslavia (1989-1994)one novi dinar = 1,300,000,000,000,000,000,000,000,000 pre-1990 dinars (that’s alot of zeros there).
20. Zaire (1989-1996) – One 1997 franc = 300 billion pre-1989 dinars.
21. Zimbabwe (1999 – present) - no new currency is introduced yet. As shown in last blog they are considering gold backed currency.
