As for America and others we loses our shit for decimal point increase.
In: Economics
This is just from what I hear from people, but they function through gray market that trade using more stable currency like USD. The people just sorta abandon their own currency. You are somewhat protected when your wage isn’t paid using the currency and the goods and services you buy also don’t ask for that currency, but this further devalue the currency for obvious reasons.
Yes, the lights, the phone lines and the Internet stay on, supermarkets stay open, people continue to go to work and society seems to “function”. Prices go up, people get their salaries adjusted to “almost” match inflation and life goes on. People still go out on weekends, watch movies and etc…so you get an illusion of normalcy.
But when prices are going up like this, people are no longer sure about the true value of money. This means that business cannot invest and expand, since it is impossible to calculate the true return on their investment when inflation is this high. So the economy stagnates as business are unwilling and unable to expand. This means fewer jobs for the younger people, gradually decaying infrastructure and worse public services due to a stagnant tax base, and so on.
Very high inflation put a country on a very gradual death spiral. Things still “function”, but the society is slowly dying.
I think a movie that gives a somewhat good sense of what this looks like would be the first Mad Max movie that came out in 1979. If you remove the biker gangs and car chases, but keep the sense of fatalistic hopelessness, that is what a high inflation country feels like.
I wouldn’t call it functioning. As a Turkish resident, wages were constantly raised throughout the country to keep up. Some raises were quite drastic, which rarely happens in the U.S. It helped but inflation is still up, requiring another raise this summer.
Cost of living is insane here. Can’t afford housing, can’t afford cars. My wage is way higher compared to the average, but still.
Eventually, inflation has to be stopped.
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