Sunday, October 31, 2021

Inflation: In Venezuela the National Currency is Worthless

 

The Venezuelan government recently dropped six zeros from the bolivar. The highest denomination currency note of 1 million bolivars, worth less than $0.25, was replaced by a one-bolivar note. The currency conversion was designed to... enable people to purchase everyday items without having to carry around bundles of notes, given that the price of a loaf of bread had risen to 7 million old bolivars. Of course, the arbitrary scaling down of the denomination of the currency will not slow inflation, because the new currency notes can be printed just as cheaply as the old. The ... IMF estimates the annual inflation rate will reach 5,500 percent by the end of 2021.

Some Venezuelans have started used chips of gold as currency because they hold their value.

I have a question: Will American inflation get this bad?

Will Congressional spending ignite hyperinflation in America?

Is the Federal Reserve complicit in the devaluation of the dollar?

OK...that is three questions... and I have more. If you answered YES to all three questions ... you agree with me.  But I could be wrong... we can only hope.

Ron

Thank you:  Joseph T. Salerno of Mises Institute for the heads up.