PW
Español

 

PW
Guyana
Surinam


PW
Trinidad

& Tobago
Caribbean

 

Prices
Graphics

 




Very usefull links



PW
Bookstore





Blogspots

The Global Barrel

Tiempo Culural

Gustavo Coronel

Iran Watch.org

Le Blog des
Energies Nouvelles

News Links

AP

AFP

Aljazeera

Dow Jones

Reuters

Bloomberg

Views and News
from
Norway

 

PW
Bookstore

 

 

 

Hyperinflation take on Venezuela has its latest victim

 

 

 

 


By Esteban Rojas / AFP

CARACAS
Petroleumworld 10 01 2021

Venezuela, which slashed six zeros off its currency on Friday, is just the latest country to battle runaway inflation, with prices rising by 1,600 percent there this year.

Hyperinflation -- when prices soar more than 50 percent per month -- tends to occur in times of conflict or when public finances go off the rails.

It often brings on economic collapse as more and more money is printed.

Here are some of the most dramatic historical precedents:


Weimar Germany

German collective consciousness is still scarred by the hyperinflation of the Weimar Republic in the 1920s, when the country was ruined after its defeat in World War I.

The state responded by endlessly printing money, leading to hyperinflation from 1921 and 1924.

Images of Germans going to buy bread with wheelbarrows of cash became etched into memory.

Prices at the time were going up by a fifth per day, according to the US Cato Institute think tank. Many historians say the phenomenon led to the rise of Nazism.

But the worst inflation ever recorded was in Hungary where in 1946 prices sometimes doubled in 15 hours.


Argentina, 1989


In Argentina customers rushed to the shops in panic when hyperinflation reached 3,079 percent in 1989 and 2,314 percent in 1990.

Supermarkets were looted and the crisis led to the early departure of President Raul Alfonsin.

The imposition of peso-dollar parity in 1991 brought inflation down to 84 percent. But the result was a recession and parity was abandoned in 2002.


Yugoslavia, 1993-1994

The break-up of the former Yugoslavia in 1991 and the UN embargo a year later led prices in the Yugoslav Federation's remaining rump states of Serbia and Montenegro to spiral by 300 million percent in 1993.

Shops were empty and the currency sharply devalued.

In January 1994, when inflation stabilised at one million percent, the government launched a programme of reforms and put in circulation a "super dinar", officially worth one German mark.


Zimbabwe, 2008

Prices spiralled in 2008 and 2009 sparked by a controversial land reform which saw the forced eviction of most of the country's white farmers.

As the currency plunging, the government of Robert Mugabe churned out money. He introduced a 100,000-billion Zimbabwean dollar bill, just enough to buy a loaf of bread.

Basic products like sugar and cornflour became luxuries with Zimbabweans using bags or wheelbarrows of money to do their shopping.

After further devaluations the authorities abandoned their currency in 2009 in favour of the US dollar.


And now Venezuela


Venezuela has been fighting for years with the highest inflation in the world.

In the former oil-rich country, hyperinflation reached 400,000 percent in 2018, 9,500 percent in 2019, 3,000 percent in 2020 and is expected to be 1,600 percent this year.

A new bolivar with six noughts knocked off will be worth 100 billion bolivars at its 2007 value.

The enormous sums will just be enough to buy a few vegetables or a small piece of meat in an economy largely based on the US dollar.

The local currency is worth so little that the children use it to play with.

The government blames international sanctions imposed since 2019, particularly by Washington, to try to oust Socialist President Nicolas Maduro, even if the crisis actually began more than eight years ago.

____________________


TOP

                                                                                                                                                                                                                                                                                                                                                                                             Contact: editor@petroleumworld.com,


Editor & Publisher:Elio Ohep /
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2021, Elio Ohep A. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2021, Petroleumworld   / Elio Ohep - All rights reserved

This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.