1/The year before I migrated to Canada from Peru in 1988 I saw inflation go from 20% to 7,200% wiping out my grandfathers life savings with it. He had the Peruvian currency equivalent of ~$1 million USD in 1987. By the end of ‘88 it was ~$0 USD equivalent.
2/on the flip side. My neighbour earlier that year got an eviction notice for failing to keep up with his mortgage payments having an outstanding mortgage in the hundreds of thousands equivalent USD. He also has a small amount of USD savings under his pillow.
3/By then end of ‘88 he was able to pay off his full mortgage with a couple of hundred USD. He lived in that house for the next 20 years. My grandfather had to go back to work & depended on the financial support of his family for the rest of his life.
/4 black swan events like these can make and break people in the same society. Savers lose badly & debtors win the lottery. The very fabric is society nonetheless crumbles. I remember stores/restaurants upping their prices every couple of hours.
5/The barter/favor economy took over creating transactional frictions that made it very difficult to do any business and provide for your family.
6/The reaction to this extreme was an overthrow of a nanny state who stole millions & printed money to buy votes,to one that was fiscally responsible & has kept inflation < 3% for the next 28yrs. One can only hope this too will be the outcome for Venezuela. My heart is with them.
