Ingo Sauer explains hyper #Inflation by looking at central bank balance sheets. From my understanding:
- not the money supply growth causes hyper inflation but the insolvency of the central bank
- the insolvency of a central bank can be caused by debt monetization aka brrrrrr or by losing hard reserve assets. In general: by deterioration of the asset side of the balance sheet
- the mechanism is: central bank loses solvency —> FX rate falls —> inflation —> central bank tries to stabilize FX —> central bank goes bust —> hyper inflation
- the only remedy is recapitalization to stabilize FX (basically by stealing money from the people)
I think he is right. I think #Bitcoin can be understood as a speculative self defense attack on all #Fiat.