Rick Ackerman argues that the burden of debt is the key to identifying whether it is the “I” word or the “D” word at work in the economy today: 

“Concerning the inflation-vs-deflation debate, we’re going to try and kick the level of discussion up a notch or two with a couple of suggestions.  First, because the pro and con arguments often bog down in pseudo-intellectual claptrap about what constitutes “money,” we are going to provide you with foolproof way to recognize deflation for what it is – namely, an increase in the real burden of debt. Some will say that this is just a symptom of inflation, but we would tell them that it is ultimately only the symptoms that matter. Trust us on this: You’re a deflationist, just like us, if you believe that paying off your mortgage, servicing the $200,000 debt your daughter racked up attending Vassar, and retiring at 65 will not get any easier within the foreseeable future. If, on the other hand, you believe that Helicopter Ben and his band of tooth fairies will come to the rescue, raising your real income very substantially and causing perpetual increases in the value of your home sufficient to allow you to borrow against it just like in the good old days, then you are an inflationist.

When Money Dies

Our second suggestion is that you beg, buy, steal or borrow a copy of Adam Fergusson’s book, When Money Dies: The Nightmare of the Weimar Hyper-inflation. Used original copies of this minutely detailed and fascinating work go for upwards of $800, but if you search the web for the title, you can turn up cheaper ways to access it.  The book is essential for anyone who wants to understand why it would be impossible for the U.S. to trigger off a hyperinflation in the way the Germans did. The mechanisms simply don’t exist.  Fergusson will save you the trouble of searching a million web pages to find out how all those D-marks actually got into the hands of German workers. Surely this question has occurred to you, right?  Nearly all sources say the same thing – i.e., that the government revved up the printing presses, and… Bitteschön!… hyperinflation simply happened. In fact, putting a google of D-marks into circulation required a degree of collusion between the government and major employers that could not exist in the U.S. without major changes in the law.

It turns out that certain large German companies were allowed to print their own money in times of emergency. Because they did so most promiscuously when Germany’s official-currency printers were on strike, as occurred several times, the ironic result was that the most severe stretches of hyperinflation during the nearly three-year period occurred when sovereign notes were not even being printed. Another revelation from Fergusson is that some officials failed to see a hyperinflation threat even when money-creation was at full-bore. Would America’s political leaders be so stupid as to let hyperinflation occur inadvertently? And, was screwing the allies out of war reparations Germany’s motive for hyperinflating? In fact, maintaining a high level of employment was the original goal, and it worked to the extent that Germany in 1921 had full employment while the war’s victors were wallowing in joblessness. This book is a great read, and the answers you’ve been looking for are all here. “