You will have contraction of money supply along with the value decrease of each individual dollar. Hyper-inflation would be the lowering of value of each individual dollar by creating more of them and adding to the supply.
To put another way: A decrease in quantity and value as opposed to increase in quantity and decrease in value.
This is about as bad as it gets because not only is the dollar worth less there is a lot less in circulation.
The part that people don’t understand is the unique relationship that the US dollar has with other currencies. In simplest terms the value of the dollar is propped up by other currencies however this weakens other currencies in the process. Normally the amount of debt we have combined with are massive trade imbalance would crush our currency.
So basically they are getting together this weekend to discuss how the financial management of the US is screwing up the world economies on many levels. One of the things they will discuss is kicking the dollar to the side, which, unfortunately for people in the US is the best thing to do for the world.
I think this maybe a first time in the history of financial crises phenomena, pretty cool. But then again we have been the only reserve currency in history. Isn’t fiat money fun. Weee!
