HughPickens.com [hughpickens.com] writes:
Andrew Rosati writes at Bloomberg that you know things are bad when a country can't print new bills fast enough to keep up with the torrid pace of price increases and
it's so broke that it may not have enough money to pay for any new money [bloomberg.com]. Last month,
De La Rue, the world’s largest currency maker, [delarue.com] sent a letter to the central bank of Venezuela complaining that it was owed $71 million and would inform its shareholders if the money were not forthcoming. Late last year, the central bank ordered more than 10 billion bank notes, surpassing the 7.6 billion the U.S. Federal Reserve requested this year for an economy many times the size of Venezuela’s. “It’s an unprecedented case in history that a country with such high inflation cannot get new bills,” said Jose Guerra. Steve Hanke, a professor of applied economics at Johns Hopkins University, who has studied hyperinflation for decades, says that to maintain faith in the currency when prices spiral, governments often add zeros to bank notes rather than flood the market. “
It’s a very bad sign to see people running around with wheelbarrows full of money [usagold.com] to buy a hot dog,” says Hanke. “Even the cash economy starts breaking down."
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