How does a new currency stop inflation?

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Apparently, every time a currency falls victim to hyper inflation, sooner or later the country is gonna introduce a new currency to solve the problem.

But how does that help? If let’s say the us dollar lost 90% of it’s value every day, and you introduced a new currency, one of which is equal to 5 us dollars, wouldn’t that new currency, as it’s value is bound to the dollar, instantly lose 90% of it’s value every day as well?

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Anonymous 0 Comments

New currency is like throwing a bandaid on an open wound that’s infected. Yes, it stops the bleeding, and from the outside, it can seem like everything is fine. But the problem is still there destroying things under the surface and without policy changes (aka antibiotics in this metaphor) things will continue to fester and eventually you lose the limb if left untreated.

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