If the money supply is inflated still further, then the wage-price spiral of course accelerates, while the dilemma just described is merely deferred until later (to be faced by the same or another administration). The additional inflation, in other words, brings the economy a step closer to hyperinflation, in which additional paper must be printed at ever more rapid rates in order to stave off a deep depression, and quite possibly to total collapse of the currency. Perhaps the best-known currency collapse occurred in Germany in 1923, but similar collapses have been observed in several Latin American countries, while price increases occasionally accelerated to dangerous levels under interventionist regimes in Israel and even the United States during the last decades of the twentieth century. Currency collapse or hyperinflation results in increasingly chaotic market conditions, often leading to deprivations even more severe than those of a depression.

On the other hand, policy-makers can permit interest rates to rise, as in 1929. The values of capital goods, land assets, and real estate, which were previously magnified by artificially low interest rates, now plummet, while producers who were previously misled by those rates to invest in economically unsound projects are now threatened with bankruptcy. Hardest hit in the ensuing stock-market crash are the bloated cyclical industries, devoted to the production of high-order capital goods or heavily invested in long-term assets, such as plants, durable capital, or land.