Back in Zimbabwe?s central banker in praise of Fed, one of our readers, Temjin asked,
Lol Praised by Zim?s RB, such a honor. But is Gono really really serious about his monetary policy will work in the very end?
We scanned through the Reserve Bank of Zimbabwe’s First Quarter Monetary Policy Statement for 2008 and saw this:
Our economy is and has been in trouble for over ten years and our extraordinary interventions by whatever name have helped to keep the wheels of this economy moving.
…
Of course, in the short-term such interventions are without doubt inflationary but in the medium to long-term they trigger and propel economic growth and development that everyone craves for.
It is amazing to see how low the depth of human delusion can go. The disturbing thing is that the US is treading the very same path that Zimbabwe took years ago. As Marc Faber said here,
… central banks have become asylums for economists that have turned insane. And in their insanity, they became money printers. And so you have to be your own central bank. You cannot trust the central banks of our governments anymore…
As we said before in Supplying never-ending drugs till stagflation,
Like drugs, the more you ?print? money, the less effective it will be in stimulating economic growth (see What causes economic booms and busts?). Eventually, it will come to a point that the economy will not respond positively anymore no matter how much money is being ?printed.? That is the nightmare of stagflation (low or negative real growth with sky-rocketing price inflation- look at Zimbabwe).
Finally, Temjin asked,
Ed, can you paint us a scenario on the final ?breakdown? of a hyperinflation? What will happen afterward? Out of paper/ink to print? 😀 People resort to violence/anarchy? Full acceptance of bartering?
For this, we will do something different today- we will turn to you, our readers to share your stories about hyperinflation at our forum. Your stories can be first-hand or second-hand. If not, you can also share stories that you learn from TV, movies, books, newspapers and magazines, etc (e.g. what is happening in Zimbabwe today). We believe that stories are more effective than dry economic theories at helping all of us to understand the true meaning of hyperinflation.
We remembered that one of our readers, Sergey Stadnik, had a story at Harmful effects of inflation:
I lived in Russia during the hyperinflation of late 80s-early90s. It was exactly as you say: people and businesses were not interested in producing goods. The only path to success was speculating.
Perhaps you have more stories to share? Or you have questions about hyperinflation? Our forum is open for questions and sharing here.
Tags: Dr Gono, hyperinflation, Marc Faber, stagflation, Zimbabwe
