My Father-in-Law, Inflation, and Speculation in Fire Arms

When my father-in-law was a young man going to school after World War I, inflation in Germany was severe. He took the train to school. One day, when getting ready to board the train to return home, he discovered that the price of a ticket had inflated so high that he no longer had enough money to buy one, and he had to walk the five miles home.

We read of this inflation and economists and particularly monetarist economics tries to interpret it; they call it hyperinflation. I will quote and article from Wikepedia on Hyperinflation, and it is sufficient to give and idea of how hyperinflation is understood:
http://en.wikipedia.org/wiki/Hyperinflation#Root_causes_of_hyperinflation

By definition, hyperinflation is a rapid increase in Nominal GDP (the Money Supply multiplied by the velocity of money) without a corresponding increase in real output (see Equation of exchange). This is often caused by decisions on the part of the central bank to increase the money supply much more than markets had previously expected, often when money is printed to finance government spending. This results in a fall in the demand for money relative to its supply, which in an extreme case can grow into a complete loss of confidence in the money, similar to a bank run. This loss of confidence causes a rapid increase in velocity of spending which causes a corresponding rapid increase in prices. For example, once inflation has become established, sellers try to hedge against it by increasing prices. This leads to further waves of price increases.

(emphasis by underline mine)

Describe for me who and for what there is spending that causes prices to increase 1000% in an afternoon.

If I fancy a boat, am I buying boats one after the other so quickly that the price goes through the ceiling? Or are the poor buying loaves of bread so fast and in such great supply (hoping they have enough money to pay the electric bill to run the refrigerator to freeze and preserve the perishable bread) that the price of bread goes through the roof?

No. It is solely a phenomenon of financial markets. The financial markets are the only locales where "spending" can proceed so quickly - recall the Dow dropping 1,000 points in 10 minutes in May 2010. It is a loss of confidence, followed by markets frantically trying to act as if the pricing system still worked: it is the classic "chicken with its head cut off". The markets "pretend" that they work properly to assign prices - although inflated ones - to goods, but that is nonsense.

Once confidence is lost, everything stops. People will continue to go through the motions for a while, but it is a charade, and an economic analysis of it is a rational exercise in understanding a charade.
At this point, the system is broken: The Government, the Central Banks, the Banks, and the Financial Markets. Nothing beyond these are broken, but the pain and suffering is widely spread.

Yet, we continue to refuse to regulate speculation which causes wide swings in food and gas and other basic necessities. We continue to refuse to install meaningful safeguards against a repetition of the Banking Disaster of 2008. We continue to focus on the wrong areas, and we do so because our philosophy and narrative is so seriously out-of-date that is has become pernicious and destructive: it is our Apocalypto, where we are captives taken to the bloody altars where we shall be sacrificed to a Religion of Destruction, to a Government of War Crimes, and to a Common Sense of Catastrophe.
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note

The classic image of a government press running overtime printing paper money as the cause of inflation is typical of our understanding, At present, the Federal Reserve is doing exactly that, yet our rate of inflation "out in the real economy" is not all that high.

Where is the hyperinflation? It used to be in the price of Housing... now it is in the price of Gold.

Interestingly enough, my research on the price of fire arms and ammunition during the period of 2008 through 2010 - when the media was reporting very large demand - indicates the prices of both goods remained relatively stabile in the areas I have researched. There was no inflation in the price of fire arms even though demand had increased substantially.
Which leads me to a quandary: how to explain that?

The only thing I can think of is the fact that there is no Commodity Market for fire arms, and, therefore, no speculators to drive up the price.

Perhaps Inflation is solely a phenomenon of certain types of goods which lend themselves to speculation. There was considerable speculation is housing during the Housing Boom. Surely there could be speculation in fire arms, but the point is that there is no such speculation right now.

Hyperinflation is obviously a Speculator and a Market; Inflation only a bit less so obvious.

Inflation is another gift and by-product of the financial markets. Furthermore, a great portion of our Economics is a Study of Wall Street and Commodities Exchanges... essentially a man thinking he is looking out a window and describing the scenery to us, while he is actually looking into a mirror... a darkling mirror.
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