"Between October 1, 1993 and January 24, 1995 prices increased by 5 quadrillion percent. That's a 5 with 15 zeroes after it."
One of my heroes, Nikolai Tesla, the real father of the electric age, was honored by his homeland (he was from Serbia - part of the former Yugoslavia) with this bill:
That's a 10 billion dinar note (high-res version purchased from iStockphoto.com for use in my forthcoming book, Conquering Innovation Fatigue through John Wiley & Sons). I think it was good for a couple loaves of bread at the time. There was even a 500 billion dinar note printed that you can see in Dr. Watkins' article.
I'd like to know if there is anything fundamentally different between what Yugoslavian tyrants did to destroy their economy and what our leaders are doing right now. Did any of you notice that the outrageous national debt - the result of decades of corruption and malfeasance - was DOUBLED in the past few months by our current leaders? Adding 5 trillion dollars to our debt, creating hundreds of billions of dollars of new money every month, selling out our future, taking the money of all working people to dump into the black holes of greed and failure without accountability -- the impact of such corruption and greed cannot be escaped. We are witnessing the largest theft and financial mismanagement in the history of the world - and the solution being proposed by the next guy coming into power is more of the same (swiping up another trillion dollars from US citizens to provide "stimulus" - an approach that is guaranteed to fail and further erode our economy and freedoms). No one seems to ask the question: Who is benefiting from all this debt? Who is reaping the rewards of our insolvency? And how can we survive if this keeps up?
When hyperinflation or other economic and political calamities strike, it can be swift and violent. It can take everything you have and everything you have worked for. Take these things seriously and prepare now while you can. I don't think you'll regret building up your food storage. I also don't think you'll regret putting part of your assets into something that won't evaporate if the CEO is a crook, if the company is Ponzi scheme, if China decides to abandon the US dollar, or if the national debt and the amount of US dollars created from thin air triples in 2009.
The socialist paradise of Yugoslavia and its economic failure is something we should study. Ditto for the Weimar Republic and, more recently, Zimbabwe, whose corrupt leader and source of their devastating hyperinflation was praised by our media as an almost Messianic figure who came to save the people of that now hopeless nation. No apologies now for their past endorsement of Mugabe. The lessons, though, are worth learning. You won't learn them from the New York Times.
Update: Yes, we are currently experiencing monetary deflation, as the vast amounts of money are being pulled out of circulation and the huge new quantities being created are dumped into banks that aren't using it for anything except protecting their solvency (plus throwing some lavish parties, issuing a few massive bonuses, and lobbying Congress to give them even more). The momentary failure of the newly created money to be put into circulation, however, is like water accumulating behind a loose earthen dam. Eventually it is going to flow again, and when it does, the vast creation of fiat money will lead to massive inflation. Temporary, transient deflation, yes, but inevitably followed by a tsunami of inflationary forces that will make bring us closer to the Zimbabwe model - for we are following their path in financial stewardship. Howard Ruff's article, "Keynesian Economics Works - Sometimes!" explains it well, in my opinion.
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