Hyperinflation? Unless you have lived through it, you probably don’t realise how scary it can be. We know that with the relatively mild inflation we have in South Africa a lot of things become steadily more expensive. But look to the north at Zimbabwe: it is very recently, less than a decade ago, that the country’s currency accelerated into ruin, with banknotes having so many zeroes on the end of the number that it was a source of ridicule and amusement. Unless you were living there, watching your savings being eroded, having too little value in your banknotes to buy food and support your family.
‘When Money Destroys Nations’ by Philip Haslam and Russell Lamberti was launched this week, and is an accessible, well researched and terrifying look not just at what has happened in the past – in Zimbabwe and elsewhere – but also at the causes of hyperinflation – governments spending above their means and printing the money to meet their obligations.
It is easy to dismiss Zimbabwe as a joke of a country, run by a brutal and increasingly barmy dictator. But the United States has the largest world’s reserve currency, and it, too, is printing money far too fast – to fund spending which is far too high. And the same financial folly can be seen elsewhere, too.
As the authors conclude: “Hyperinflation is the ultimate in economic chaos and disorder, leaving in its path economic ruin.”
This is an excellent and informative book. Send it to your ministers, bureaucrats, economists and economic commentators.
The horrors of Zimbabwe were not unique and a similar scenario elsewhere may be far closer than we think.
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Zim dstopped cellphone contracts in 2004 due to superinflation. If you made a 1zim dollar call on the 1st of the month, that call when billed at the end of the month would have been 1000zim dollars!