When money died
- Rupam Deb
- Apr 3, 2014
- 1 min read
There is this one website which I often visit, and the fast changing numbers there have a hypnotic effect on my senses. It is US Debt Clock. Here is the screenshot from this site just at the midnight of 2nd April 2014. For anyone who has the knowledge of even high-school economics, the numbers should look unsettling.
It draws my attention to a collection of pictures which I always keep handy, lest I forget history. The dreadful history of something that happened in the German Weimar Republic in early twenties, and in Zimbabwe, Ukraine, Peru, Argentina, erstwhile Yugoslavia and many other countries, all not so long ago. If we go back a few decades more, the list grows scarily long.
Hyperinflation – I will let the pictures do the speaking
Notice the right-hand most column in the picture below:
Source: Steve H. Hanke and Nicholas Krus (2012) “World Hyperinflations”
Hyperinflation in Weimar Germany
What is Hyperinflation?
Children playing with useless wads of Marks
Hyperinflation in Zimbabwe
Considering the amount of money our governments are busy printing, not being concerned about serious inflation is akin to committing financial hara-kiri.
To me, whether the risk of hyperinflation is real, could be a subject of academic debate, but protecting ourselves is not. When we insure our property against a certain calamity, we are not exactly doing it because we forecast the calamity. All we are doing in protecting ourselves from any exposures in the event of the calamity, however minuscule the probability might be. Where is our similar thinking, when it comes to protecting ourselves against hyperinflation?
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