Big Gap in Logic Weakens Hyperinflation Argument

Rick Ackerman schooled by Gonzalo Lira:

http://www.zerohedge.com/article/gonzalo-lira-vs-rick-ackerman-slicing-logic-behind-no-hyperinflation-argument

I heard that FOFOA had some comments as well.

If hyperinflation is defined as a 'crisis in confidence' in the dollar, it doesn't matter how many dollars are awash in the community. If the prevailing sentiment is that dollars are worthless, then no one will accept them regardless of the supply in circulation. That was the essence of the Weimar experience. The crisis in confidence happened first, and then quite quickly, the printing of marks quickly overcame any shortage of currency which may have initially existed.

Remember that inflation is a monetary phenomenon. Hyperinflation is a psycho-sociological phenomenon.

If I understand your premise, you seem to be suggesting that the supply of dollars would dry up from the loss of paper wealth which would be brought on by a financial collapse. This would theoretically reduce inflation as there would be fewer dollars chasing a given supply of goods. But hyperinflation doesn't necessarily imply that prices go up because there are too many dollars chasing too few goods, but rather it implies that the perception of the value of those dollars has declined and no one wants to hold them at all -- let alone accept them in exchange for tangible goods that DO have value.

Remember that the collapse we are envisioning will bring with it the implicit destruction of the economic and financial system on which the dollar is based. Indeed, a free-fall of the dollar in the world markets could conceivably trigger such a collapse in the first place.

Post collapse, the dollar is worthless. And, if I hold tangible goods and that collapse scenario you describe comes to pass, I'm inclined to decline exchanging those tangible goods for a now-worthless fiat paper currency.

wont QE3 and QE4 keep the banks asset prices inflated so there wont be a crash?