When Money Destroys Nations

by Philip Haslam

Since the financial crisis of 2008, the major governments of the world have resorted to printing large amounts of money to pay national debts and bail out banks. The warning signs are clear, and the collapse of the Zimbabwean dollar after years of rampant money printing is a frightening example of what lies in store for world economies if painful reform is not executed. When Money Destroys Nations tells the gripping story of the disintegration of the once-thriving Zimbabwean economy and how ordinary people survived in turbulent circumstances. Analysing this case within a global context, Philip Haslam and Russell Lamberti investigate the causes of hyperinflation and draw ominous parallels between Zimbabwe and the world's developed economies. The looming currency crises and hyperinflation in these major economies, particularly the United States, have the potential to turn the current world order upside down. This story of how money destroys nations holds lessons that cannot be ignored.

Genres: Nonfiction

197 pages, ebook

First published September 30, 2014

Reviews

[Martin · Rating 4 out of 5]

From his analysis of the recent hyperinflation in Zimbabwe, the author postulates the following phases of a hyperinflation:

0. money supply increases, prices follow but lag
1. prices rise in anticipation of future inflation, outpace money supply increase
2. shortage of money results
3. shops empty, business can't replace their inventory at sale prices because prices have risen by that time. Bankruptcies of trading companies follow, supply chains falter.
4. lending/credit stopps, banking crisis emerges. Regardless how high interest rates, savings in bank accounts are wiped out. Banks fail.
5. faith in money fails. Everybody tries to exchange depreciating money as quickly as possible by buying anything else of value. Money velocity increases dramatically.
6. currency is no longer maintainable by government, value of the currency falls to zero. Foreign currencies are used, but expectation of inflation persists.

Once stage 1 is reached, it seems that the sequence of events can't be stopped, although it takes several years to run the course. It seems that government makes the problem increasingly worse by implementing price controls, outlawing transactions in other currencies etc.

Interesting is that different sectors of the economy work well up to different phases in this progression. Exporting businesses for example do well until the very end, since their cost are in the hyperinflating local currency, and their income is in high-demand foreign currencies.

I missed comparison with other cases of recent hyperinflation. Have governments reacted differently in other countries? What would happen if a country in phase 2 or 3 simply abandons its currency and ties it at a fixed rate to a foreign currency? Such questions are not explored in this book.

Overall, an interesting account and analysis of what happened in the case of Zimbabwe, but a bit quick at generalizing this without much supporting data from other cases.

[Terry · Rating 5 out of 5]

Doom. and Gloom or Our Coming Reality?

I've studied this topic in a variety of ways for over a decade. This book brings it all together in an understandable and easy to read manner. Once begun, I found it hard to put down.

What made it real for me was the real life examples from Zimbabwe. Then, when you follow the logical stages of hyperinflation through as laid out in the book, one with any kind of background on what is happening with our currency will find that the dots quickly begin to connect.

However, even if you know nothing about this topic (hyperinflation) it doesn't matter. The authors will make it quite clear that you'd better start planning for this very real
eventuality.

Highly recommended for the uninitiated to the hardcore prepper. Even the well planned will gain some value from this well organized and well sourced treatment. Kept my attention from the beginning to the end and showed me the gaping holes in my own game. And I thought I was doing OK.

The Zimbabwe reality as described in this book was a wake-up call for me. When you get that what happened there is happening globally and locally from this book the lessons available from this tiny nation, which once was a thriving one, will be well worth the time you invest in reading this book.

A wake up call, good read and highly recommended for those who wish to protect their futures rather than play pretend like the lost boys in Pinocchio. Remember those fools ended up enslaved. Hyperinflation has a far more lethal consequence than that.

[David · Rating 5 out of 5]

In reasonably plain English, using real world examples from Zimbabwe and other countries, explains how hyperinflation is caused and what the effects are for governments, businesses, and individuals living through it and trying to survive. Also makes anyone who reads it more aware and alert to signs of it starting or occurring in your own country like excessive government spending and liberal printing of money to pay for more social programs, etc. Consequences of ignoring where we are headed will be devastating to our society. Recommended for anyone who is concerned about the economy.

[Michael Mifsud · Rating 3 out of 5]

Good read overall to see the impact hyperinflation has on a society. It gets a bit "conspiracy theory" by the end though. Otherwise its a good, if light, read.