Pictures of Hyperinflation

These elegant pictures from Reuters illustrate the price of goods in Venezuela as the inflation rate hits 82,700 percent.

This one suggests some obvious substitutions.


While we're at it, how much non mea culpa do you suppose these creatures are trafficking in:

Digging up old articles by leftists praising Chavez is an endless source of joy these days. Sweet, sweet, vindication.


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+1 All the clips could be spliced together to make a feature length movie.

I'm going to enjoy watching a similar movie involving Donald Trump someday.

Some of you might wonder how they count the money. When I was there last time, a couple of years ago, they weighted the bricks of banknotes.

The second picture looks like an arbitrage opportunity.

More like arBUTTrage opportunity.

I'll see myself out...

What a crappy pun.

I got it from the bowels of the internet

I have lived through two hyperinflations. One in Bolivia and one in my country, Argentina.
In both cases you needed a big bag to carry the money you needed to purchase something, and kept counting bills for there were no "big" bills.
The most interesting thing was to see how people wanted to get rid of the money as fast as possible. Buying anything. Going to the supermarket and spending up to the last penny.

My dad's friend in Argentina would order a car, pay cash for it, then when it was finally delivered turn around and sell it. Then order another one with the proceeds. I suppose this works?

I think it would work in times of high inflation. You would have to know the market very well: which car to buy and how o where to sell it, because there is a chance that you would always have the same money if valued in dollars.

Wouldn't it be more logical to to the car in a garage and hold it as an investment like gold than try to flip it and buy a new car?

My understanding was it took some months for delivery...maybe close to a year. There were ppl who needed a car right now (the economy wasn't totally trashed like Venezuela is now). So you didn't want the car to age and lose value and you could sell it for a premium putting the money down on a new one was a way to mai tain constant value.

In developed countries I rarely see studies of the relationship between the money supply and the price level. Is there some threshold at which changes in money supply do predict inflation?

There is this obscure guy called Milton Friedman, he wrote quite a bit about this topic.

A little further comment on Uncle Milton:
and yes I do believe inflation is a monetary issue, but how do we measure money?

You can just as well model money as only base currency and consider the broader parts of the money supply as being substitutes that merely effect the demand for base currency, the only real money. Friedman thought, back when it was true, that broader measures of the money supply had stable velocity. That correlation broke down decades ago and although M2 might have more stable velocity than M0 it still has enough variance that you can't just stably target it. Also the central bank can only control M0 and the relationship between M0 and M2(or other broader measures even) isn't stable either. So you might as well just deal in M0 and treat velocity as something that will vary and just do your best to predict that variation. Your going to have to do that anyway, despite the hopes Milton Friedman had in the 70s and 80s.

Such is life under Castillian caudillism.

You forgot to mention that the Venezuelan caudillo would have been blasted into oblivion had they not used a cheap Chinese (DJI) drone and instead used a Brazilian model:

Brazil is investing heavily in aerospacial technology, agriculture and and blockchain technology. However, I would rather emphasize that Brazil is a peaceful country, which never fought a war of aggression and, as famous Brazilian Senator Ruy Barbosa told Nobel Prize winner Anatole France, favors world peace.

Also prions and satellites and the lion will crush the serpent and soy farms and best food and WWII help and the rogue province of the Cisplatine and no homosexuals and larger than the Roman empire and sugar and

dog chill you been tweakin the functions we speak on weekends and I been enjoying beatin the demons the steady creepin and flexin its all on me

You are an impersonator.

you have a plastic straw up your arse you twit.

A little back-of-the-TP math to see if one is better off using a Bolivar:
Assuming the dimensions of modern bolivars are the same as the 2008 editions, and assuming one is using the 1,000 bolivar notes as shown in the photo: that stack of notes seems to be 301 square feet of paper.

The largest roll mentioned in a 2015 chart from Consumer Reports shows a square-footage of 105.3 per roll (the "Scott Tissue 1,000 Sheet" roll, a product that probably has similar coarseness to a Bolivar). I've never handled a Bolivar, so I can't make any judgments on absorption and durability, but it seems to me that the substitution effect may be powerful...

Unfortunate for the substitution scheme, TP is designed to dissolve in water and not clog the plumbing, but if the infrastructure decays to the point where people are using latrines then substitution might become an option.

The good news is if you don't eat nothing you don't need toilet paper.

Yes, the pictures of life under hyperinflation are funny. But the Venezuelans are not enjoying hyperinflation. It's one of the many consequences of living under an incompetent, corrupt and criminal government, so the focus should be on the Maduro government and not on how much paper you need to buy toilet paper.

Since Alex is the good economist in this blog, I hope he explains in detail why hyperinflation happens. Although hyperinflation has been an exceptional experience that lasted only as long as the government needed to finance some "extraordinary" expenditures by printing money, one cannot ignore the suffering of those forced to live under such a government.

As a matter of fact, the most pressing problem created by the Maduro government is a wave of emigrants, mainly to other South American countries. Maduro intends to imitate Fidel's success in gaining total control of Cuba by forcing the opposition to emigrate. You are not going to hear too many voices in the rest of the world against Maduro, but we are already hearing the hypocrites that complain about the restrictions put on Venezuelans that want to immigrate to other South American countries.

"Yes, the pictures of life under hyperinflation are funny. But the Venezuelans are not enjoying hyperinflation."

Maybe they should stop electing mad people and start paying what they owe us.

Venezuelans don't owe me anything. I feel genuine pity and sorrow for those poor people living under a barbaric government.

They took money from Brazil. Why won't pay??

First C of lending is character. The Brazilians should have known whom they were lending to. Or maybe they did?

So that is. It is the fault of trusting people who act in good faith towards its neighbors.

What idiot trusts communists?

Thank you Gabe. Thiago is too flippant. What is happening to Venezuelans is horrible, and other nations, especially Latin American nations should support the opposition in many ways. Sad that Venezuelans have become refugees in South America.

Funny how those things keep happening to Castillians.

Such is life in Brazil's continent

It is not Brazil's fault, impersonator. Hate the game, not the player.

The second image is only too accurate.

How about a picture of a pile of banknotes next to an armed drone? Maduro needs to go one way or another.

And yet behind Maduro stands another corrupt autocrat, and behind them, another.

The sad fact is that the government in Venezuela is so compromised, you probably would have to replace the top 10,000 people, by bullet or ballot.

Why buy toilet paper? Just use the bolivar.

You mean "How could one buy toilet paper?" It was one of the first things put under price control, with the extremely predictable result.

Too rough and does not flush.

>Inflation hit 82,700 percent in July as the country's socialist economic model continues to unravel

Unbelievable -- Reuters actually used the S word!

Somebody tell Liz Warren and Ocasio-Cortez!

Anyone know where you can buy some of that currency? If I could get the street rate I’d buy a few hundred pounds just for fun.

Indeed, my not so special childhood dream of sleeping in a bed of bills with lots of zeros =)

If the oil industry is an indicator, they'll forget how to print money at the first sign of turning a profit.

These look like still lives. The real pictures of hyperinflation are grim.

When socialism fails the socialists simply deny that it was ever socialism.

Well, yeah. Socialism always looks FORWARD, not backward... at its trail of corpses and misery and starvation.

That's why "progressives" love it!

Socialism works

Almost everyone in Zimbabwe(sic, I'm sure) is now a trillionaire.

Come on. When Chairman Mao turned Chinese farms (and subsequent output) into communal property it was BAD WEATHER that caused mass starvation, not the government policy.

Not just the weather but birds. But the government had a policy for the birds too.

I had assumed the purpose of the currency reset was to make ordinary commerce easier. This suggests it's no longer profitable to literally print money, and maybe the purpose is to make it so again.

What is the military waiting for--isn't their money bad too?

I presume the Trusted Circle of People With Guns are paid in dollars....

Not completely off topic... South Africa is apparently going to be seizing white owned land after all (as if there was ever any doubt).

What's the over under timeline for a post like this showing how many stacks of bills a bag of maize meal costs?

Looting a wealthy minority to enrich your tribal supporters is just too attractive an option for many polities in the west. In Africa, it's an irresistible temptation.

Let's face it; high discount rates, ethnic polities, socialist ideology and lots of diversity with low IQ and social only surprise is that they waited this long!

The fact that there's low social trust between whites and blacks in South Africa isn't really the fault of the blacks, or their genes.

Umm....sure. Black on Black social trust in Southern Africa was so high before the whites turned up.... both on an intra and inter-tribal level...

C'mon Hazel....At least admit there's a cultural problem. We can then transit you onto the Alt Right position with our easy, 12-step programme...

Hazel thinks 'low social trust' is why white farmers in South Africa are facing homicide mortality characteristic of war zones.

Once again Alex shows courage, covering a story few outlets will touch,

Don't gloat too hard. Turkey will be a right wing failed state soon enough.

Find me the articles by right-wingers praising Turkey's government.

Why? It's a right wing government. Who is or isn't praising it is immaterial.

Presumably "gloating" involves being right about something that someone else is wrong about. There is and was no comparable American political support for Ergodan the way there was for Chavez. So what on earth would you be gloating over? Who exactly is supposed to have been proven wrong in this situation?

Gloating over the collapse of a conservative, pro-growth, nationalist government into tyranny and hyperinflation. Obviously.

I loathe Trump as much as you, but I'm just not seeing the resemblance, or the political affiliation sorry.

Turkey's current unemployment rate is elevated, but normal for the last decade (and normal for Europe between 1985 and 2010). Its current inflation rate is elevated, but below that of any single year between 1978 and 2002. Public sector debt is currently 28% of gdp, which is quite reasonable. I think it will be awhile 'ere Turkey is Somalia.

How much to buy a rubber band?

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