Living in the United States or other “stable” countries, we tend to think that Hyperinflation is a relatively uncommon event but that is far from the truth. In our post What is Hyperinflation? We list 26 instances of hyperinflation 11 of which have occurred since 1990. It seems that every couple of years there is another one. Even in the midst of deflationary pressures we have seen Zimbabwe (which ended in 2008), North Korea (2010-13) and now Syria.
In Surviving a Hyperinflation we noted that “Hyperinflation only occurs in countries where the government has already broken down. Weimar Germany was mired in a social Civil War… Zimbabwe never had a working democratic government and the increasingly bizarre action of the Mugabe dictatorship, crashing the economy, divesting the (white) professional farmers of their lands and intervening in the First and Second Congo Wars, converted very high inflation to hyperinflation…”
Whenever you hear a country outlawing currency conversions or the use of foreign currency for local transactions a giant red flag should start waving in your head saying, “Warning, Warning, Danger, Danger”. Just as Zimbabwe and North Korea we now have Syria.
Syria is currently [Read more...]