On Thu, 12 Nov 2009, SA wrote:
>> you don't really need to ask, do you?
>
> I'm guessing you mean the answer is "obviously yes." In that case, how's
> the Zimbabwe Stock Exchange been doing? Must be the mother of all
> bubbles! (Or at least the most certain of all bubbles.)
Well, maybe. Hyperinflation and bubbles could correlate cet par, and cet might not be par in the Zimbabwean case. And secondly, laws that operate under normal times might not operate in extreme cases. Hyperinflation might be like the zero bound, where lots of economic rules are suspended.
It would be interesting to examine a series of hyperinflation cases. I assume someone's probably already doing that?
FWIW, in Weimar, the archetype of hyperinflation, there was a mother of all bubbles. In Sebastian Haffner's _Defying Hitler_ (brilliant book, although very misleading title in translation), he describes that this is how the average office worker ending up making do when things got into the billions: they had their wages paid in shares of blue chip stock, which held their value fairly well. And shopkeepers began to tote accounts and accept transfers of stock as payment.
Michael