Modern Day Hyperinflation

re: Venezuela

1. You can’t save money, so you live day by day. Your big savings are in US Dollars.
2. The second you have some money in your hand you look for ways to buy foreign currency. In this case: the US dollar.
3. The government tries to stop hyperinflation by imposing Price Controls. The problem is that if an item is underpriced, it flies off the shelves and the shelves are always empty. You can’t find the things you want to buy.
4. Producers can’t make money because their products are price-controlled. Thus there is no point investing in anything. This makes shortages even worse.
5. The scarcity also means there are huge lines for simple things. People will stand in line for hours for powdered milk. Imagine Black Friday-type lanes because there is chicken at the store.
6. Since lines are an embarrassment for the government, they made it illegal to form lines in front of supermarkets. Therefore, people form lines behind the stores where it is less visible.
7. Another measure to shorten the lines is that you can only shop on certain days of the week depending on your ID number. Imagine if people with social security numbers ending in 1–2 can only shop on Monday, 2–3 on Tuesday, etc.
8. Big, expensive things such as cars or real estate are priced in foreign currencies. To buy them, you have to figure out a way to pay sellers in US Dollars, often via wire transfers to bank accounts outside the country. Needless to say, this is something only a few people have access to.
9. The government will blame foreigners, merchants, homosexuals, even aliens for the hyperinflation, any minority will do just fine. They would never ever recognize that they are printing too much money. They will just pretend to cover the sun with one finger. Having a minority as a common enemy is a classical political tactic to get support from the majority.
10. If you find some good, you buy as much of it as you can even if you don’t need it. You often end up sharing it with your friends and family, and they will do the same.
11. There is a thriving informal economy (a.k.a. Black Markets). People buy price-controlled items, and then resell them outside the store for a real, black market price. It sounds like a scam, but in reality, if it wasn’t for these people it would be impossible to find some goods sometimes. They are keeping the economy alive. Black market merchants are locally known as “Bachaqueros” which translates to something like “ant men”.
12. Some scarce goods are sold in ridiculously low amounts. Someone in a building

1. might be selling 1 squeeze of toothpaste to their neighbors. Cigarettes are sold individually.
2. Poor people still think the government is the one that will save them, and they blame producers and merchants and call them greedy.
3. People get creative. You would be surprised how many things you can do with a coat hanger.
4. Right now, the Venezuelan Bolivar had a 50% drop in 2 weeks. Banks just don’t have enough bills, so you can only withdraw about $5-$10 worth from your bank account per day. To fix it, the government will just print more money with higher denomination, which will just continue the hyperinflation.
5. The government uses the crisis to justify ever bigger power grabs. There was supposed to be a recall vote this year against President Nicolás Maduro, but they simply stopped it. The more difficult the situation is, the more power the government has.
6. Every few years, the government removes some zeroes from the currency. There are high hopes for the new currency to be stable, and it does stay stable for a while until the government prints too much of it and the hyperinflation continues.

 

"Another measure to shorten the lines is that you can only shop on certain days of the week depending on your ID number. Imagine if people with social security numbers ending in 1–2 can only shop on Monday, 2–3 on Tuesday, etc."
This happened in the US with gasoline.
Anybody know when and why?

 

Hyperinflation ands scarcity are brothers.

 

Won't bidenomics prevent that?

 

During the Carter administration when the Arabs closed the spigots and raised oil prices.I vividly remember waiting in long lines at the gas station to fill up.

 

Shrinkflation is just as bad. A bar of soap is about half the size it was 30 years ago but cost the same amount.

 

Incorrect. It was Nixon.
https://energyhistory.yale.edu/the-oil-shocks-of-the-1970s/

 

That is American style inflation to date and certainly an acceptable rate of inflation.
Shrinkflation has become quite common during the Biden presidentcy.

 

Prevent? Ha! Stoking.

 

That was indeed the first but I remember a couple more under Carter.