Quote from: deisik on April 21, 2017, 07:27:04 AM

Quote from: lazyturtle on April 20, 2017, 08:49:31 PM

Quote from: deisik on April 20, 2017, 06:54:14 PM

Hyperinflation basically means that the value of money itself collapses, but since bubbles in currencies rarely change the purchasing power of money, they are inconsequential to hyperinflation. Essentially, they are just short-term speculations when the price of money (in terms of other currencies) gets divorced from its value (in terms of goods it can buy). When the currency bubble bursts the price of money goes back to its real value (so called "fair price"), which is determined in the way I explained in one of my previous posts (namely, by the amount of money over the quantity of goods)

I mixed together the terms value and price, thats why i was confused. Thanks for clearing that up, it was interesting to discuss with you! Grin

You are welcome

This may in fact sound like an obscure and convoluted theory, but this regretfully is as real as shit. Many local fiats get "hyped up" (I'm using the terminology from the cryptoworld but it fits well even with real fiat currencies), i.e. their price against reference currencies (say, the US dollar) rises in nominal terms, but it counterintuitively doesn't lower inflation rates in these countries (which would mean real value of that currency rising). For example, the Russian ruble has been rising against the dollar for over a year till now already, so you might intuitively expect that the inflation in Russia should be at least on par with the inflation in the US, while in reality it is nowhere near the case since it has been times greater during this year (as it was years before). The chart below shows the exchange rate of the US dollar to the Russian ruble

http://s019.radikal.ru/i625/1704/8b/7a693b2b0e8c.png

I guess this is the best approximation to a currency "bubble" which we could come up with

I learned alot from this post when you gave a example of a possible currency bubble in Russia. Really interesting and i see your point and agree.

Do you have any litterature you would recommend that explore these topics, or just any book that you would recommend for someone interested in economics (mostly currencies)? Or perhaps just a author you find wisdomful.

I have gone to a pretty basic course in economics and econometrics, so the book's doesnt need to be super "noob", i do have a fundamental understanding of the more basics concepts.

I would really appreciate if you would take the time to give a few tips, i like the way you think and would like to adopt a part of that in my economic thinking.

Thanks