Ponce
29th May 2011, 10:01 AM
Do I need to say anything?
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Currency Devaluation in Belarus Causes a Run on Toilet Paper.
The destruction of a currency is, without doubt, positively devastating for a society. History is generous with examples dating all the way back to 212 BC when Rome first devalued its denarius silver coin by 50%. Recent examples are also plentiful.
Zimbabwe’s hyperinflationary period is well documented; what most people don’t realize is that after inflating several trillion percent, the government simply discontinued the currency… literally devaluing the Zimbabwe dollar to zero. People holding Zimbabwe dollars lost their entire savings overnight.
Argentina’s devaluation in 2002 sent its peso from 1:1 vs. to roughly 4 pesos to the dollar. Banks closed, taking depositors’ savings with them. Those with any cash savings were paying four times as much for goods, practically overnight. Unemployment soared. Even now, over ten years later, the economy has yet to fully recover.
Belarus is the latest example. This is a country where the autocratic president Alexandr Lukashenko controls 80% of the economy through state-owned entities. He rules in the old Soviet style with KGB and secret police, demanding total servitude from his people.
Earlier this week, Lukashenko ordered his central bank to devalue the Belarusian ruble by 56%, immediately. The ruble’s official exchange rate is now 4,930 per US dollar and 6,914 per euro.
Unfortunately, dollars and euros are extremely hard to come by in Belarus… so the lack of supply and strong demand is pushing up street prices to several times the official rate.
News headlines picked up on this major leap; what you won’t see in the media is that local Belarusians knew this was coming… the warning signs were there.
Last month, most banks stopped trading foreign currencies. People rushed to the foreign banks to withdraw any dollars they had on deposit, many having to wait up to 7-days after making the request before the bank could actually provide cash.
While the official devaluation to 4,930 occurred on May 23rd, the banks were running out of foreign currency fast. Several of our local friends on the ground in Minsk confirm that by May 16th, a full week before the official devaluation, banks were charging between 10,000 to 12,000 rubles per dollar.
Grocery prices (in ruble terms) have tripled in this short period as most of the food is imported from companies who require dollar or euro payments. It now costs an entire year’s wages just to buy a simple refrigerator.
Our local contacts report that many store shelves are near empty as people are rushing to spend every ruble they have in anticipation of further rising prices. Some of my local friends have emailed saying that it’s getting difficult to even find toilet paper as people are buying up absolutely everything they can.
Economic disasters destroy the social fabric. Rising crime, political unrest, and resource shortages always result. This has been the story of Rome… of Zimbabwe… of Argentina… and just about every other place to go through such turmoil. It’s foolish to think that it can’t happen in the west.
The face of economic and political devastation in Belarus is tragic; it’s a beautiful country full of some of the warmest people I’ve ever known.
Many students from Belarus attended the summer camp that we staged last August in Europe– this was a weeklong workshop in the picturesque Lithuanian countryside designed to teach real world entrepreneurial skills, investment concepts, and free market ideals to university students.
Many Atlas 400 members generously helped support our endeavor, and the event attracted attendees from 10-different countries, including a strong contingent from Belarus. It was a wonderful experience all around, and we’ve decided to hold the event again this year.
I’d like to extend an invitation to the Sovereign Man community this year. Please note– this is not an offshore workshop to discuss multiple flags and international diversification; the purpose of this camp is to help provide younger people with the real skills and inspiration they need to succeed on their own.
If you’re between 18-24, or have children/grandchildren between the ages of 18-24 who may be interested, you can read more about the camp and apply here. Attendance costs nothing, we pick up the tab for everything during the event… you are only responsible for your travel to Lithuania.
Also bear in mind that we only have capacity for 50 students at this workshop and nearly 100 applications already. We’re looking for the most motivated students who really want to learn and be challenged, and I know it’s going to be a tough job combing through all the applications and making the final selection.
http://www.truthistreason.net/currency-devaluation-in-belarus-causes-a-run-on-toilet-paper
=======================================
Currency Devaluation in Belarus Causes a Run on Toilet Paper.
The destruction of a currency is, without doubt, positively devastating for a society. History is generous with examples dating all the way back to 212 BC when Rome first devalued its denarius silver coin by 50%. Recent examples are also plentiful.
Zimbabwe’s hyperinflationary period is well documented; what most people don’t realize is that after inflating several trillion percent, the government simply discontinued the currency… literally devaluing the Zimbabwe dollar to zero. People holding Zimbabwe dollars lost their entire savings overnight.
Argentina’s devaluation in 2002 sent its peso from 1:1 vs. to roughly 4 pesos to the dollar. Banks closed, taking depositors’ savings with them. Those with any cash savings were paying four times as much for goods, practically overnight. Unemployment soared. Even now, over ten years later, the economy has yet to fully recover.
Belarus is the latest example. This is a country where the autocratic president Alexandr Lukashenko controls 80% of the economy through state-owned entities. He rules in the old Soviet style with KGB and secret police, demanding total servitude from his people.
Earlier this week, Lukashenko ordered his central bank to devalue the Belarusian ruble by 56%, immediately. The ruble’s official exchange rate is now 4,930 per US dollar and 6,914 per euro.
Unfortunately, dollars and euros are extremely hard to come by in Belarus… so the lack of supply and strong demand is pushing up street prices to several times the official rate.
News headlines picked up on this major leap; what you won’t see in the media is that local Belarusians knew this was coming… the warning signs were there.
Last month, most banks stopped trading foreign currencies. People rushed to the foreign banks to withdraw any dollars they had on deposit, many having to wait up to 7-days after making the request before the bank could actually provide cash.
While the official devaluation to 4,930 occurred on May 23rd, the banks were running out of foreign currency fast. Several of our local friends on the ground in Minsk confirm that by May 16th, a full week before the official devaluation, banks were charging between 10,000 to 12,000 rubles per dollar.
Grocery prices (in ruble terms) have tripled in this short period as most of the food is imported from companies who require dollar or euro payments. It now costs an entire year’s wages just to buy a simple refrigerator.
Our local contacts report that many store shelves are near empty as people are rushing to spend every ruble they have in anticipation of further rising prices. Some of my local friends have emailed saying that it’s getting difficult to even find toilet paper as people are buying up absolutely everything they can.
Economic disasters destroy the social fabric. Rising crime, political unrest, and resource shortages always result. This has been the story of Rome… of Zimbabwe… of Argentina… and just about every other place to go through such turmoil. It’s foolish to think that it can’t happen in the west.
The face of economic and political devastation in Belarus is tragic; it’s a beautiful country full of some of the warmest people I’ve ever known.
Many students from Belarus attended the summer camp that we staged last August in Europe– this was a weeklong workshop in the picturesque Lithuanian countryside designed to teach real world entrepreneurial skills, investment concepts, and free market ideals to university students.
Many Atlas 400 members generously helped support our endeavor, and the event attracted attendees from 10-different countries, including a strong contingent from Belarus. It was a wonderful experience all around, and we’ve decided to hold the event again this year.
I’d like to extend an invitation to the Sovereign Man community this year. Please note– this is not an offshore workshop to discuss multiple flags and international diversification; the purpose of this camp is to help provide younger people with the real skills and inspiration they need to succeed on their own.
If you’re between 18-24, or have children/grandchildren between the ages of 18-24 who may be interested, you can read more about the camp and apply here. Attendance costs nothing, we pick up the tab for everything during the event… you are only responsible for your travel to Lithuania.
Also bear in mind that we only have capacity for 50 students at this workshop and nearly 100 applications already. We’re looking for the most motivated students who really want to learn and be challenged, and I know it’s going to be a tough job combing through all the applications and making the final selection.
http://www.truthistreason.net/currency-devaluation-in-belarus-causes-a-run-on-toilet-paper