Zimbabwe 100 Trillion Dollar Note
In Zimbabwe inlfation went from 32% annually in 1998 to 11,200,000 in August 2008. Hyperinflation hit Zimbabwe. So what happened to Zimbabwe after hyperinflation?
Zimbabwes simply stopped using it's currency. Instead, they started using the US Dollar, British Pound, South African Rand, or whatever else that could be used as currency instead of the Zimbabwe dollar.
They also started Local buying essentials from neighbouring Botswana, South Africa, and Zambia.
Can the same thing happen in the United States, Europe, Jpana or other country? Of course it can. If central bank leaders continue their current path of deficit spending, unsustainable entitlements, huge debt - it will lead first to high inlation and then maybe hyperinflation.
However, countries hit with hyperinflation show a remarkable tendency to bounce back quickly. Weimer Germany in the early 1930's bounced back to become a global industrial power within years. Even Zimbabwe's GDP has grown by over 5% annually since 2009. Those Americans who lived threw high inflation in the 1970's, made it through alright and saw unprecedented growth in the 1980's.
So countries can survive hyperinflation or high inflation. What we have to worry about is the time period before high inflation or hyper inflation hits. If you are a saver and most of your money was earned from pre-inflation dollars, when hyper inlfation hits your pre-inflation dollars lose massive purchasing power. The key then is to make sure you don't have dollars. Instead, you purchase assets that raise or at least maintain its purchasing power in a hyperinflation environment. In the case of Zimbabwe, they used the currency of other countries. Another course of action is to trade your currency for gold or silver. Remember, gold and silver is the same as currency except that it holds its value over time.
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