by JuanP » Fri 08 Jul 2022, 07:18:09
I witnessed ballistic hyperinflation multiple times during my childhood and adolescence in Brazil and Argentina during the 70s and 80s. It was a horrible, horrible nightmare, particularly for families with children. Currencies lost and gained value in an instant without any warning or notice.
You would go to bed at night with absolutely no idea of how much your money would be worth when you woke up the next morning. You woke up in the morning with no idea of how much your money would be worth in the afternoon. It was terrifying for most people, particularly working class families. For people with no access to Dollars or Uruguayan Pesos (the only two alternative currencies available back then) life was a nonstop rollercoaster ride.
People would work full time for a month, collect their salaries, cash them, run to the store, and find that all they could buy with a month's salary was, maybe, a pound of rice. Most people spent all their money the day they got paid. Forget about paying rent, electricity, or filling up your car. People were riding bicycles and walking to commute by the millions in places like Buenos Aires or Sao Paulo, and driving a car was dangerous because it meant you had money, so you would get robbed. They would get up in the middle of the night to get to work on time and get home late at night.
Everybody was selling anything of value they had for pennies on the dollar to survive. Family heirlooms, gold or silver jewelry, homes; cars were worthless. Pawn shop owners made a killing but got robbed and killed all the time and would have heavily armed bodyguard teams who would work for food. Anyone that could worked for food.
The only people getting by were people who had savings in Dollars or got paid in Dollars, which they would exchange as needed. Bartering was commonplace.
Most of them were cigarette smokers back then, but cigarettes were an unaffordable luxury for the vast majority. Even if you had money to buy them, the stores wouldn't sell them to you because they had no idea how much it would cost to replace them. If you could find a place that sold cigarettes, you would have to buy them one cigarette at a time, forget buying a box or a carton; that was only possible if you had Dollars. A carton of cigarettes cost around 100 dollars! Imagine a country in which the vast majority of the population is constantly undergoing Nicotine withdrawal!!! You couldn't smoke anywhere because you would get mobbed or assaulted. I was a smoker in 87-88 when I visited Buenos Aires during one of its worst economic crises. I could afford to buy cigarettes because I had Dollars.
I was staying at the most expensive hotel in the country, and I would tip the workers there using cigarettes and food, which were worth more than money because they could be bartered for anything. I had waiters and bellboys break down and cry when I gave them a few cigarettes, a bag of rice, or a can of tuna. When I left, I tipped them all in dollars.
I once took my girlfriend to dinner at Maxim's, which was the most expensive restaurant in the country, to celebrate our anniversary. We had fillet mignon with truffles and Dom Perignon champagne. The bill was in dollars, of course. I took a bag of food, dollars, and a carton of cigarettes to tip all the workers in the restaurant from the dishwasher to the Maitre d'. It caused such a scene. There were only a couple of tables busy, and I noticed that the clients were paying the bill in dollars but tipping the staff in pesos or not tipping at all; I couldn't believe it.
A crisis like that brings out the best in some people and the worst in others. The worst part for most people was the uncertainty; working but not knowing if you would be able to feed your family or not. It ate everyone inside like a cancer. Everybody was angry, depressed, or burnt out. The government passed laws to freeze rents, stop evictions, keep the electricity on, and distribute food directly to the population, so most people had a place to live and enough food to survive, but most were hungry and cold most of the time. All the streets were full of beggars, even in the most upscale neighborhoods. I wouldn't wish that on my worst enemies, if I had any.
It was completely heartbreaking and extremely stressful. Many people never recover from experiences like that; they change you forever.
"Human stupidity has no limits" JuanP