It does matter. If you don't have money, it matters even more whether it is deflation or hyperinflation. Hyperinflation is an equalizer in some sense. It destroys everyone's wealth equally past a certain threshold of intolerance. People always win out in these scenarios but they're usually connected government insiders and the owners of physical capital who maintain physical possession through and after the hyperinflation occurs. Who in Zimbabwe was still rich after hyperinflation? The military and Robert Mugabe + entourage (100,000 lucky Ins?)
It has an intimate effect on the pace of collapse and the overall social compact. Hyperinflation would truly galvanize the 99% against the 1%. Engulfed in such a horror, no one can really protect papers assets at all. Consider the one difference going for this monetary collapse is that the majority of the denominations are digital ledgers.
It is the limited number of people capable of operating complex mechanical capital that come out holding the wealth in a hyperinflation. Crime would spike during hyperinflation but social order would not collapse. Government could maintain order up to the point of open insurrection. Rioting and "armed looting" would be expected. Basically, you'd see people get tribal in a hurry.
A lot of businesses would end up closing out of the sheer terror of operating in the HI price environment. Mafias fill the void in vulnerable areas, so pretty much every urban periphery becomes a slum area. Rents can't be paid, real estate owners must collect from their tenants somehow especially b/c physical ejection is risky. The devolution of social order in the exurbs and "working class" suburbs does not signal the end of anything. A new currency can be strung up fast, and it can be fiat. Electronics also allows rapid deployment of a new currency regime. What choice do you have but to use your ATM card for the new red money. Since all the green money got canceled out...
Hyperinflation is not the dirt nap you're looking for. It is likely the contraction in "Growth" aka consumerism and hedonism is restricted to a smaller group, the ones who float their reconstituted corporations on the new red money stock exchange. Who is rich in the Russian Federation? Putin may end up as the richest man in the world!
Deflation, on the other hand, truly threatens the entire economic paradigm and once deflation begins you scale on the Collapse spectrum. Deflation would essentially mean the abandonment of money and the tyranny of money. Greece is being forced to endure a deflation instead of being allowed to have a hyperinflation, which is what would ultimately occur if they default and then re-denominate all the old debt into the new currency.
In Greece, businesses have been shutting down because people stopped patronizing them and the taxes. People went into survival mode. Hoarding cash and supplies. Making arrangements to flee or go underground. Setting up barter exchanges and going back to the land. Also, as money left the economy, things got relatively more expensive. Gas may be $10 in Athens but what's a Greek Taxi make per day? The notional feel for him could be what we'd feel like at $20
Deflation is like unplugging a bath tub full of water. It sucks cash out of the economy to settle obligations at once! The extension of credit ceases because projects and enterprises must stand on their own rather than their ability to favorably finance. Time value of money becomes the primal factor. Extension of cash flow credit, for time-sensitive businesses can end suddenly.
Cash flow ends for everyone because people stop getting paid. And businesses close because their not getting customers because people stop getting paid. It is the virtuous circle of credit collapse. It does not happen overnight. It happens in several dislocations. Greece is significantly advanced right now over a few years at this point. Argentina came through a deflationary collapse that had the unfortunate side effect of severe inflation just not hyperinflation.
Crimes and mafias increase. People turn to the underground economy and barter. The underground and barter exchanges are predatory because the deflation is advantaging certain people. The government can begin to lose a grip on certain areas. If the supply of important civilian goods and services has run out, then the government has become a predatory adversary towards the people. Some areas and communities may agree to incorporate the new mafias. Mostly, people who have hoarded supplies specific to life support. Cooking oil. Rice. Condoms... And they trust can get more.
This is getting long. I only mean to illustrate that while that these paths might lead us to the same place, the journey is very different and cannot be approached the same way. Hyperinflation and collapse takes a very different approach than a grinding deflationary collapse.
