Source: Reddit
Noah Smith, Bloomberg: Venezuela Is Living a Hyperinflation Nightmare
The country has the world's largest oil reserves and should be fabulously wealthy. Instead, children are starving.
In most macroeconomic models, the economy is a staid and stately thing, where prices, output and other economic variables wiggle up and down by small amounts but ultimately return to their long-term trends. And for much of the time -- excluding the occasional Great Depression or Great Recession -- developed countries conform to this picture of stability. But in some countries, and in some periods, truly spectacular things happen to an economy. Usually, they are bad things. And the most spectacular, and least understood, is hyperinflation.
Normal inflation and hyperinflation are so different in scope that they might as well be regarded as separate phenomena. Inflation in the U.S. for the past decade has hovered at or less than 2 percent, which is the Federal Reserve’s official target. In 1980, it reached a high of almost 15 percent. But at its peak in 2009, Zimbabwe’s inflation reached 500 billion percent.
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WNU Editor: My family experienced what life was like living with hyperinflation in Russia in 1993-1994. The rate in Russia was 1,000% in 1993 .... 300+% in 1994 .... and I still shudder when I think of those times. As to how did Russians survived during this period of inflation .... foreign currencies like US Dollars and Deutche Marks became the currency of choice, barter was the rule and not the exception, and people/neighbors/friends/family members/etc.. helped each other as best as they could. In today's Venezuela .... the rate is now a jaw-dropping 4,300%. You cannot live under these conditions, and not surprising, Venezuelans are looking for alternatives .... "It's Not Politics, It's Survival" - Bitcoin, Local Currencies Are Taking Over In Venezuela (Zero Hedge). But unlike Russia where necessary economic and monetary reforms were imposed to put some order to this chaos, I do not see anyone in the Venezuelan government having even an inkling on what needs to be done ... nor even an interest to do so. Bottom line .... it is going to get worse in VEnezuela.
Update: I cannot figure out this one either .... Venezuela's a Disaster, Yet Socialism's Popularity Soars (Jonah Goldberg, LA Times).
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