Hyperinflation – Part One: What is it and where has it manifested before

It has been a long while since I have done a ‘serious’ post. A long time between drinks so to speak !! Let’s face it, to spend hours researching then taking the time to do a blog and two people see it and maybe one reads it… not exactly productive use of one’s time.

I decided to cover this subject after some general discussion around the topic with my friend @krabgat as both of us are in agreement the current world economy status quo is extremely likely to lead to hyperinflation in the near future

So what exactly is hyperinflation?

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Hyperinflation
In economics, hyperinflation is a very high and typically accelerating inflation. It quickly erodes the real value of the local currency, as the prices of all goods increase. This causes people to minimize their holdings in that currency as they usually switch to more stable foreign currencies.
Source: Wikipedia

I also decided to ask chatGTP

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it’s opinion and just so you know I am being politically correct I did first ask chatGTP which pronoun it prefers and got the following response
As an AI language model, I don't have a gender identity and therefore don't use pronouns to refer to myself. You can simply refer to me as "ChatGPT" or "the AI language model."

Hyperinflation:-
Is a condition in which the prices of goods and services rise rapidly, causing the value of currency to drop drastically. This means that the purchasing power of money decreases significantly, resulting in the need for more currency to purchase the same goods or services.
Source:ChatGPT

What are the typical causes of hyperinflation?

The following factors or a combination of some or all of them may lead to hyperinflation

• excessive printing of money, leading to an increase in the money supply that outpaces the supply of goods and services.
• government policies such as continuous deficit spending in excess of Gross Domestic Product(GDP)
• economic crises such as political instability, wars, or natural disasters.

Hyperinflation can have severe consequences on an economy, including increased poverty, unemployment, and social unrest.

I think we can all agree what with quantitive easing by many central banks, supply chain disruptions during the C19 plandemic, the rapid rise in interest rates around the world, the excessively indebted nations (number of countries with Debt to GDP ratios well in excess of 100%) there is a very strong likelihood that prolonged inflation is to be expected.

Top 12 Countries with the Highest Debt-to-GDP Ratios (March 2023)(%)

1. Venezuela — 350%
2. Japan — 266%
3. Sudan — 259%
4. Greece — 206%
5. Lebanon — 172%
6. Cabo Verde — 157%
7. Italy — 156%
8. Libya — 155%
9. Portugal — 134%
10. Singapore — 131%
11. Bahrain — 128%
12. United States — 128%
    Source

What? No African nations there?? That is a pleasant surprise....... (me being an African and all {shrug})

Again I took to chatGTP to dig up some past instances of hyperinflation ..

There have been several examples of countries that have experienced hyperinflation in the past. Here are some examples:

Zimbabwe: Zimbabwe experienced one of the most severe hyperinflations in history between the years of 2004 to 2009. At its peak in November 2008, inflation reached an estimated rate of 79.6 billion percent.

Venezuela: Venezuela has been experiencing hyperinflation since 2016 due to a combination of factors, including a decline in oil prices, a decrease in production, and a government that has printed excessive amounts of money. As of March 2023, inflation in Venezuela is estimated to be over 5,000%.

Germany: After World War I, Germany experienced hyperinflation between 1921 and 1923, with inflation rates reaching over 3.25 million percent. This led to widespread poverty and social unrest in the country.

Hungary: In 1946, Hungary experienced hyperinflation due to the government's decision to finance post-World War II reconstruction through the printing of money. Inflation reached a peak of 4.19 × 10^16 percent.

Yugoslavia: Yugoslavia experienced hyperinflation in the early 1990s due to political instability and economic mismanagement. At its peak, inflation reached an estimated rate of 5 billion percent per month.
[Source]

Some of those inflation numbers are ridiculously high and hard to imagine.

That in a nutshell is what hyperinflation is in easy to understand layman terms ..... Part Two will cover past hyperinflation durations on average and how one could or should prepare for hyperinflation in your country.

Thanks for stopping by and hopefully you learnt something, I know I did. I would love to hear your take on the potential for hyperinflation in your country as well as if you are currently experiencing inflation.

namaste