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Also note that in both cases (Venezuela and Brazil) there was no external force (war or commercial ban) that artificially reduced supply. At the time Brazil sta
by lnino 9y ago
Also note that in both cases (Venezuela and Brazil) there was no external force (war or commercial ban) that artificially reduced supply.
At the time Brazil started experiencing hyper-inflation, it was already one of the world's top beef producers, still beef was up 5000% a year.
Venezuela was selling it's oil at peak prices to the US when their hyper-inflation started. For a while gas was the only affordable product in the country, because the production kept pace with the money printing.
There's just no explanation for inflation in Latin American countries that haven't seen a war or major natural disaster in 100 years, other than bad spending policies.
The government themselves admitted that in most cases, and were able to get inflation back in track with massive cuts in spending.
- crdoconnor 9y agoHyperinflation only kicked in in Venezuela after the plunge in oil prices, but up until that point industry in Venezuela had been dying. In Brazil it followed and was mainly triggered by the 1970s energy crisis.
- lnino 9y agoThere was already super high inflation in both cases before the supply crises. It's just it got way worse because the government reacted to the threat by printing even more money to pay for its spending. Unless you think 100% a year is not hyper-inflation. And how the hell an energy crisis can get the price of beef to go up 5000% a year, in a country that's a leader in beef production?
- crdoconnor 9y ago50% monthly inflation is a common definition. It's around the point where inflation doesn't tend to ever come down again. Iraq has had 300% a year at one point and it came down.