Price inflation is caused by
- increased money supply
- decreased demand for money
- increased demand for the good
- decreased good supply
The 11 million percent price inflation rate in Zimbabwe was not caused by a 11 million percent reduction in goods supply.
Re:A basic income experiment in Kenya
by jimmywanger on Tuesday January 02, 2018 @12:03AM
(#16049989)
If your currency is suffering from hyperinflation, your currency is worthless on international markets.
Why would they take money in a rapidly depreciating asset instead of just demanding hard currency that holds value decently well?
That starts mattering when you have nothing really to export and still require supplies (parts and food) from foreign countries.
It's shocking how connected and interdependent industries are now. I can't think of a single thing produced that doesn't need foreign inputs for production. Even apples need ladders for harvest, when one breaks, pesticides and fertilizer.
To say that these things can't be done at all and that more demand is bad is a defeatist attitude.
Venezuela is a special case where the government is attacking production. It's not what happens in a healthy economy.