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Yes, Brazil's economy is bad right now, but it's nowhere near Venezuela's. Interestingly, Brazil has had experience with hyperinflation between 1980-1994 when
by wenc 8y ago
Yes, Brazil's economy is bad right now, but it's nowhere near Venezuela's.
Interestingly, Brazil has had experience with hyperinflation between 1980-1994 when the currency was the cruzeiro. The story of how Brazil got out of inflation by introducing a "fake currency" called the URV (Unidade Valor de Real) is the stuff of economic legend [1], but it worked and today there's is the Brazilian "real".
Venezuela's situation is much different -- dictatorship, oil dependency and handouts.
Brazil, bad as it is, has a democracy (broken and corrupt notwithstanding), more industries than just oil (Petrobras not withstanding), and has had investments in higher education and technology (Embraer). Sao Paulo as a city is economically far more advanced than Caracas (and indeed, Rio de Janeiro). Brazil is also a lot bigger than Venezuela, with many big multinational companies like Vale, Embraer, etc. The Brazilian 3G Capital also owns Burger King and Kraft Heinz.
There is hope in Brazil. Much more than in Venezuela.
[1] How Fake Money saved Brazil
https://www.npr.org/sections/money/2010/10/04/130329523/how-fake-money-saved-brazil https://www.npr.org/sections/money/2010/10/04/130329523/how-...
- toyg 8y ago> Fake Money Lol, all money is "fake" nowadays - the amount of physical currency in circulation is basically irrelevant. Whether they printed banknotes right away or not, they effectively changed currency, which is a typical way to exit hyperinflation. Brazil "just" managed to execute the transition very well on a psychological level. Venezuela is trying it now, using crypto as their anchoring. I honestly can't remember a country ever exiting hyperinflation by any other mean, they all end up ditching the original currency in one way or the other.
- tlb 8y agoIsrael cured its 400%+ hyperinflation in the mid-80s without ditching their currency, by imposing strict price controls. It took about 2 years to bring it down under 20%.
- dsq 8y agoThey ditched it twice: from lira to shekel and then from shekel to new shekel.
- tlb 8y agoThe change from pound to shekel was motivated by wanting a Hebrew name. This change was decided long before hyperinflation started, and didn't have much economic effect. The change from shekel to new shekel was a 1000x redenomination, done after inflation was under control, reflecting the way people already talked about prices (in thousands). This is different from the sense of 'ditch' in the previous conversation, which meant that the old currency became suddenly worthless.