The key stressor for hyperinflation always starts with monetary policy and the practice of using liability expansion as the basis for increasing the amount of currency in circulation (by any means - electronic or printed).  Liability inflation offers the macroeconomic structure no benefit that is sustainable on a macroeconomic basis, forcing the economy to cycle between sustained growth and recession.  This means the private-sector economy can never sustain growth as a result; this is the natural tendency of all free-market economies where there is not government ownership of private-sector businesses and/or government intervention in the policies pertaining to operations and markets.  The classic (Lovellian) solution is to change the structure of monetary policy from the liability expansion method over to the equity expansion method.  This necessitates some additional structure changes in order for the benefits to be realized and include:

Capital market operations.  There must be created a capital market exchange that does not allow short-sales by any participants and there must be no instantaneous transfers of ownership for capital, as this allows for the formation of market bubbles due to a lack of complete information and due diligence being able to be applied.  Furthermore, government must be limited to participating only in companies that are structured as RLPs (or similar contrivance) so as to eliminate the possibilities of fraud, total investment loss or a lack of performance regarding the payout of investment-income streams.  To ensure the equity investments are inflation neutral at all times and at all scales of operation, there must be rigid enforcement of the contribution matching requirement in order to sustain the market and provide a constant stimulus to the demand schedule for capital investment.  These economics fundamentals cannot be ignored or contravened for the purposes of satisfying political dogma as the beneficial impacts of the entirety of Lovellian Economics would be forfeited.

Currency Inflation Limitations.  The inflation of new currency must be undertaken in accordance with market activity.  This means the federal government would undertake all investment activities (owing to equity security investments and not the origination of long-term debt) on the exchange (TREX or licensed equivalent) would allow for increasing the currency supply in strict accordance with the increase in new business formations, so that the resulting increases in equity created as a result of the business formation would be that portion (the 1/3rd contribution by the government) that is allowed to be circulated throughout the private-sector economy.  This method creates the outcome of increasing market competition and increasing the demand schedule for employment inter alia.  This is purely a structural issue that can be defined without reliance upon concurrence of mathematical expressions.  The use of equity investments provides a benefit that cannot otherwise be contrived - the reduction of the proportion of total capital owing to liabilities is decreased each and every time the equity inflation method is used and this economic fact is beyond any reasonable dispute.  Investments in equities are not inherently inflationary, so the benefit is the increase in currency without having the attending inflation fears daunt the decision-making process again.  There are simple limits that correspond to the actual operations and growth of the economy and the result is one where the outcome will be sustainable long-term growth and not cyclical economic activity.

This topic continues on page 2.