Another fiat currency struggles to stay afloat as the Venezuela Bolivar looks to be in the throes of hyperinflation, which has been forecast for at least the last 18 months. Within black-market currency exchanges, versus the US Dollar in the month of November. In a sign of desperation, the nation-state has suspended reporting of their inflation rate for the time being.
Will Venezuela Suffer Zimbabwe-levels of Hyperinflation?
As you may know, inflation is a part of any fiat currency and is the amount of the nation’s monetary supply, or an inflation of said supply. A normal rate of inflation would be around 2% annually. A citizen will be compensated for this in a cost-of-living increase for their wages annually. Many nations will claim 1-3% inflation even when that isn’t the rate when a country is printing more money than they generate in actual production because they know a low rate is desirable.
To illustrate the inflation in Venezuela, an extra-value meal at McDonalds in Caracas costs 125 Bolivar in September of 2013. As of last month, the same meal costs 245 Bolivar, representing an almost 100% inflation within about one year’s time.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.