How will this affect America as trading partners?

rxwong42

If the ECB prints money and causes hyperinflation in Europe.

happyman81

rxwong42 wrote: »

If the ECB prints money and causes hyperinflation in Europe.

The ECB does print money and has not caused hyperinflation in Europe. Perhaps you could further elaborate on your hypothesis? What increases in the volume of money would be required for this hyperinflation to occur? What other shocks and factors would be necessary prerequisites to this disastrous scenario?

No videos please. Thanks.

andrew

This chance that this could or would happen is vanishingly, absolutely, incredibly tiny.

Also, steady on with the back seat modding there happyman81. Vidoes are fine (unless they're the money as debt ones) so long as they're relevant etc.

happyman81

andrew wrote: »

This chance that this could or would happen is vanishingly, absolutely, incredibly tiny.

Also, steady on with the back seat modding there happyman81. Vidoes are fine (unless they're the money as debt ones) so long as they're relevant etc.

I wasn't speaking for the forum, but rather for myself. So no back seat modding here. I never watch videos that people post as way of debate, it's just lazy.

rxwong42

happyman81 wrote: »

The ECB does print money and has not caused hyperinflation in Europe. Perhaps you could further elaborate on your hypothesis? What increases in the volume of money would be required for this hyperinflation to occur? What other shocks and factors would be necessary prerequisites to this disastrous scenario?

No videos please. Thanks.

As in, if the ECB prints colossal amounts of Euros to pay off the PIIGS's debt.

happyman81

rxwong42 wrote: »

happyman81 wrote: »

The ECB does print money and has not caused hyperinflation in Europe. Perhaps you could further elaborate on your hypothesis? What increases in the volume of money would be required for this hyperinflation to occur? What other shocks and factors would be necessary prerequisites to this disastrous scenario?

No videos please. Thanks.

As in, if the ECB prints colossal amounts of Euros to pay off the PIIGS's debt.

So why hasn't this led to hyperinflation yet? What is the difference between now and the Weimar Republic, when hyperinflation actually happened?

rxwong42

happyman81 wrote: »

So why hasn't this led to hyperinflation yet? What is the difference between now and the Weimar Republic, when hyperinflation actually happened?

Because this didn't actually happen; I just threw in a possible scenario and your acting as if they are already printing mass amounts of Euro. There are different factors that could potentially lead to hyperinflation and the Weimar Republic's does not fit the scenario I am describing. I'm talking about something like Zimbabwe's crisis. Do you understand now?

happyman81

rxwong42 wrote: »

Because this didn't actually happen; I just threw in a possible scenario and your acting as if they are already printing mass amounts of Euro. There are different factors that could potentially lead to hyperinflation and the Weimar Republic's does not fit the scenario I am describing. I'm talking about something like Zimbabwe's crisis. Do you understand now?

Yes, I think so. How is the Eurozone similar to a Zimbabwe, though? I guess you are seeing something that I am not. Enlighten me.

rxwong42

happyman81 wrote: »

Yes, I think so. How is the Eurozone similar to a Zimbabwe, though? I guess you are seeing something that I am not. Enlighten me.

Again, you are taking my scenario too literal. It is a SCENARIO, as in IF the ECB prints too much money to pay off debt, how will it affect America. And, indeed, Zimbabwe DID print money to pay off their debt. There IS a similarity of Zimbabwe's past and my FAKE scenario of the ECB's actions based on what I just said. I can't make this any clearer if you can't comprehend that; you can just stop posting here because, clearly, you don't have the answer to my question.

noodler

Interestingly. up until now the 200bn (approximately) the ECB has purchased in Government Bonds has been counteracted by taking money out of the system (sterilised transactions).

The LTROs have not been sterilised but their scale has been slightly overexaggerated in the media because a good deal of the lending was not new (many banks, including Irish ones, simply transferred their shorter-term ECB loans to the new 3-year LTROs).

I think the actual new amount of LTRO raised was over 300bn (rather than the 500bn reported as that wasn't all 'new' as I said).


So the question remains, is 300bn enough to cause a noticeable increase in inflation?

I don't believe so. Also, and I could do with some input on this, but I'd imagine the effect on any CPI would be even more limited by the fact they apprently alot of the money is staying with the ECB anyway as overnight deposits as banks are afraid to lend their new ECB monies to each other.

Finally, total debt in the Eurozone in 2010 was around 10 trillion euros so 300bn or so is a relatively small number (EDIT: at least in terms of any talk of printing our debts away).

noodler

If money is created (in huge quantities) the Euro will become less valuable in theory.

This would mean the dollar would buy more euros.

Concievably it could then lead to an increase in European Exports to the US but a decrease in American Exports to Europe (as the dollar is relatively more expensive).

Is this the effect you were thinking about OP?

rxwong42

Thank you! that was the answer I was looking for.

seanmacc

happyman81 wrote: »

So why hasn't this led to hyperinflation yet? What is the difference between now and the Weimar Republic, when hyperinflation actually happened?

Hyperinflation can only occur if there is a massive shortage of an essential commodity. It occured in Weimar Germany because of massive shortages of food and medicine. Where we are in danger of it in Europe if the cost of fuel spikes up to a massive figure or if there is a cut in supply.

Jan Hus

It will lower the price of Irish goods relative to American goods.