REFLECTION: It's 2008 Zimbabwe in Venezuela as inflation rate just hit 830,000% — and is likely to keep rising

Oh my oh my, the bolívars are now being likened to toilet paper in the market, what is happening in Venezuela

BACKGROUND

According to a report published in the to the country's Parliament by a coalition of opposition parties said the annual rate had almost doubled in the month since the most recent report was published in October and the IMF expects the inflation rate to reach 1 million percent this year with economists expecting a pick up in price rises as Christmas bonuses are handed out.

This week's figures may seem troubling, but things are set to get even worse for Venezuelans, with the International Monetary Fund arguing that the country's annual inflation rate is likely to pass 1 million percent this year.

Venezuela's situation has drawn comparisons to the hyperinflation incidents seen in Zimbabwe in the early 2000s and in Weimar Germany after World War I.


The data is the latest to suggest that measures introduced by the country's embattled president, Nicolas Maduro, are failing to achieve their aims. Maduro announced a series of radical economic interventions over the summer that were designed to bring down inflation and stabilize the Venezuelan economy.

REFLECTIONS

The best way to benefit from a hyperinflation environment is to be in debt when it starts. Your debts will be essentially wiped out. If you can anticipate the hyperinflation, then borrow money and buy foreign currency or commodities. Unfortunately, once the hyperinflation starts, interest rates will be adjusted to compensate (if it is possible to borrow at all) so you do need to take on the debt in advance.

If you missed your chance with that, then these words of wisdom may help you: the best way to make money in a gold rush is to sell shovels.

Hyperinflation causes people all sorts of problems. Provide solutions to those problems and you can make a fortune. You could run a business where your employees stand in queues for people (queuing outside shops is a standard part of any hyperinflationary life). You could stand outside places of work on payday ready to sell pretty much anything to people that want to turn their pay into something solid as soon as possible. You could be a black market moneychanger (If it legal, but if it is not - do even go there).