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Friday, April 18, 2014

Hyper-Inflation can't Happen Here - No Preparation Needed. Huh?

No Gold Needed. Hyper-Inflation Can't Happen Here.

 We have all experienced the pervading thought process, "That happens to 'them', it couldn't happen to me."
I believed that until my 1st marriage ended in divorce, my son began to hate me, I broke my back and severed my spinal cord in a snow sledding accident. 
Yes, life does hand us nasty little turns that throw our lives for a loop, one after another, and, yes, we each NEED to prepare, paying the price for preparation before the crisis arrives.

"But, I live in America (Angola, Argentina, Brazil, Poland, Romania, My Nation); Hyper-Inflation couldn't happen here."

 I was shocked when I did a bit of study regarding how often hyper-inflation wipes out a paper currency. On https://www.munknee.com I learned that over the past 100 years no less than 32 national currencies have been wiped out and replaced. That is about 1 nation every 3 years, I thought! WOW!
Then I discovered that during the past 25 years NO LESS THAN 21 NATIONAL CURRENCIES HAVE BEEN DESTROYED BY HYPER INFLATION, wiping out whole economies, requiring billions of families and businesses to start over because their paper preparations were burned up in  the conflagration of dynamic devaluation called hyper-inflation. That is almost one nation every year for the past 1/4 century. The worst economic destruction takes place in the nations where socialism and communism is most deeply ingrained. Capitalism and the free market in their natural course heal national economies quite rapidly. Then the tyrants step in to take their "fair share". (Bullies always have to extort their "fair share")
Just for the fun of it let's take a quick look at the economic losses that mounted up this last 25 years:
1. Angola (1991-1999)
In the 1995 currency reform, 1 kwanza reajustado was exchanged for 1,000 kwanzas… In the 1999 currency reform, 1 new kwanza was exchanged for 1,000,000 kwanzas reajustados. The overall impact of hyperinflation: 1 new kwanza = 1,000,000,000 pre-1991 kwanzas.
2. Argentina (1975-1991)
In the 1983 currency reform, 1 Peso Argentino was exchanged for 10,000 pesos. In the 1985 currency reform, 1 austral was exchanged for 1,000 pesos argentine.
Hyperinflation continued reaching a peak annualized rate of 4,923.3 percent in December 1989. At that time, government expenditure reached 35.6 percent of GDP and the fiscal deficit was 7.6 percent of GDP.
In 1990 the Argentine government created a new monetary system and established a Currency Board in April 1991. Inflation fell from 1,344 percent in 1990 to 84 percent in 1991. In the 1992 currency reform, 1 new peso was exchanged for 10,000 australes.
The inflation rate for 1992 was 17.5 percent, 7.4 percent in 1993, 3.9 percent in 1994 and 1.6 percent in 1995. By 1995, government expenditure represented 27 percent of Argentina’s GDP. The overall impact of hyperinflation: 1 new peso = 100,000,000,000 pre-1983 pesos.
3. Belarus (1994-2002)
In the 2000 currency reform, the rublei was replaced by the new ruble at an exchange rate of 1 new ruble = 2,000 old rublei.
4. Bolivia (1984-1986)
In the 1987 currency reform, the peso boliviano was replaced by the boliviano which was pegged to the U.S. dollar.
5. Brazil (1986-1994)
By the mid 1980s inflation was out of control reaching a peak of 2000 percent. In 1986 three zeros were dropped and the cruzeiro became the cruzado. In 1989, another three zeroes were dropped and the cruzado became the cruzado novo.
In order to avoid confusion and not associate the new currency with previous monetary policy, the cruzado novo was renamed the cruzeiro with no change in value in 1990. By 1993, three more zeros were dropped from the cruzeiro which became known as the cruzeiro real.
In 1994 the cruzero real was replaced by the real, worth 2.75 old cruzeiros reais… and the following measures were enacted:
1. A constitutional amendment… which empowered the Central Bank not to finance the budget deficit
2. The Central Bank made it illegal for regional banks to buy government-issued bonds
3. Wages were frozen…
As a result of these measures, prices dropped dramatically from July 1994 onwards and by 1997 inflation had been reduced to standard international levels. The overall impact of hyperinflation: 1 (1994) real = 2,700,000,000,000,000,000 pre-1930 reis.
6. Bosnia-Herzegovina (1993)
Bosnia-Hezegovina went through its worst inflation in 1993. In 1992, the highest denomination was 1,000 dinara. By 1993, the highest denomination was 100,000,000 dinara. In the Republika Srpska, the highest denomination was 10,000 dinara in 1992 and 10,000,000,000 dinara in 1993.
7. Bulgaria (1991-1997)
In 1996, Bulgaria defaulted on its international debt and narrowly escaped a revolution. From 1991 to 1997, Bulgaria experienced hyperinflation (rates of inflation exceeding 50%) that crippled its banking system and during the winter 1996-97 hyperinflation and food shortages led to hunger protests. A currency board established in July 1997 slashed three zeroes off the currency.
8. Ecuador (2000)
Ecuador officially pegged its currency to the US dollar in September 2000 after a 75% drop in value in early January of that year.
9. Georgia (1995)
In the 1995 currency reform, 1 new lari was exchanged for 1,000,000 laris.
10. Madagascar (2004)
The Madagascan franc lost nearly half its value in 2004. On 1 January 2005 the Madagascan ariary replaced the franc at a rate of 1 ariary for five Madagascan francs.
11. Mexico (1994)
On 1 January 1993, the Bank of Mexico introduced a new currency, the nuevo peso which was equal to 1,000 old pesos. Since the Mexico Peso Crisis of 1994 the value of the Mexico peso has plummeted by almost 60%.
12. Nicaragua (1987-1990)
 Nicarauga went through a currency reform in 1988 which saw 1 new Cordoba replace 1,000 old cordobas. In the mid-1990 currency reform, 1 old Cordoba equaled 5,000,000 new cordobas. Total impact of hyperinflation: 1 old Cordoba = 5Billion pre-1987 cordobas.
13. Peru (1984-1990)
In the 1985 currency reform, 1 intis was exchanged for 1000 soles de oro… In the 1991 currency reform, 1 nuevo sol was exchanged for 1,000,000 intis. The overall impact of hyperinflation: 1 nuevo sol = 1Billion pre 1985 soles de oro.
14. Poland (1990-1993)
Poland suffered two bouts of hyperinflation. The first occurred from 1922 to 1924 when inflation rates reached 275%. [The second,] after three years of hyperinflation, resulted in currency reform in 1994 in which 10,000 old zlotych were exchanged for 1 new zloty.
15. Romania (2000-2005)
Romania is still working through steady inflation that began around the time when the Iron Curtain came down… Consumer inflation in 2000 was over 45%… In July 2005 the leu was replaced by the new leu at 10,000 old lei = 1 new leu. Inflation in 2005 was about 9%.
16. Russia (1992-1994)
Russia experienced 213% inflation during the Bolshevik Revolution and again during the first year of post-Soviet reform in 1992 when annual inflation peaked at 2520%. In 1993 the annual rate was 840%, and in 1994, 224%. The ruble devalued from about 100 r/$ in 1991 to about 30,000 r/$ in 1999.
17. Turkey (1990′s)
Throughout the 1990s Turkey dealt with severe inflation rates that finally crippled the economy into a recession in 2001…Recently Turkey has achieved single digit inflation for the first time in decades, and in the 2005 currency reform, introduced the New Turkish Lira; 1 was exchanged for 1,000,000 old lira.
18. Ukraine (1993-1995)
Inflation rates peaked at 1400% per month between 1993 and 1995 resulting in the karbovantsiv being taken out of circulation in 1996 and replaced by the hryvnya at an exchange rate of 100,000 karbovantsivi = 1 hryvnya.
19. Yugoslavia (1989-1994)
[Yugoslavia had the] second worst hyperinflationary period in recent history with a monthly inflation rate of 5 quintillion percent. Between Oct 1, 1993 and January 24, 1994 prices doubled every sixteen hours on average. At the end of it, one novi dinar = 1,300,000,000,000,000,000,000,000,000 pre-1990 dinars.
20. Zaire (1989-1996)
In the 1993 currency reform, 1 nouveau zaire was exchanged for 3,000,000 old zaires. In 1997 Zaire was renamed the Congo Democratic Republic and changed its currency to francs. 1 franc was exchanged for 100,000 nouveaux zaires. The overall impact of hyperinflation: One 1997 franc = 300 billion pre-1989 dinars.
21. Zimbabwe (1999 – 2009)
The Rhodesian dollar (R$) replaced the pound as the currency in 1970 at a rate of 2 Rhodesian dollars = 1 pound (R$ 0.71 = USD $1.00). At the time of independence in 1980, one Zimbabwean dollar (of 100 cents) was worth US$1.50…. [Inflation reached an absurd 231,000,000% in the summer of 2008. Output measured in dollars had halved in barely a decade. A hundred-trillion-dollar note was made ready for circulation, but no sane tradesman would accept local banknotes. A ban on foreign-currency trading was lifted in January 2009. By then the American dollar had become Zimbabwe’s main currency, a position it still holds today.]

What will you do to prepare?

You know what you need but you may feel you cannot afford to take the steps necessary. Perhaps your national laws prevent you from "hoarding" commodities and precious metals. Perhaps you need all you earn just to feed yourself and your family. To that I have one thing to say: Improve your relationship with the Great Provider, Nature's God. 

I'm not telling what religion to believe in. I am just suggesting to you that there is a Great Creator of this majestic system we enjoy and struggle with as we live on this earth. I do not believe in evolution by constant, progressive, repetitive accident. I do not believe the earth will end up evolving living automobiles and jumbo-jets over another billion years. Evolution sounds ridiculous when you suggest such things as being even possible.

Just exactly how did the eyeball or the inner ear evolve? They DIDN'T. They were CREATED.
There is a Creator and you are who it was all created FOR.

Yes, that is right. I tell you straight because I know it without a doubt.

So, get in touch with the Great Creator and start your preparations there. I know that sounds almost counter-intuitive. Certainly you should start with digging up the vegetable garden, shouldn't you? That might be free. Well, yes and no.

Real Prosperity begins with knowing who you are. Start with getting to know your Father -- your Heavenly Father. Start understanding there is a Grand Plan for living on this earth. There is Someone who does offer and deliver assistance in times of critical need. Too many people have experienced miracles; I am one of them. You may well be another in which case you know of the peace that comes of knowing.

Give it some thought, OK?
That's it for this post.
Cameron

 

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