However any hyperinflation will not wipe out the sovereign foreign debt of the Russian government. Gerashchenko does not have a good track record and they will probably end up hyperinflating without reaising output. But there is clearly a shortage of money throughout the economy. If they could get the money to the people without it being siphoned off by the oligarchs they might have successful noninflationary growth. But I would not bet that they will succeed. Barkley Rosser On Sun, 13 Sep 1998 19:33:45 +0100 Mark Jones <Jones_M at netcomuk.co.uk> wrote:
> Brad de Long writes:
> >Hyperinflation is not a victory for anyone...
>
> Wrong, Brad.
>
> Inflation always benefits someone. In the Weimar Republic it enabled the
> govt to wipe out its reparations debts. In 1971-74 dollar devaluation
> and world inflation enabled the USA to wipe out OPEC putative gains
> from oil price increases, because oil was nominated in dollars. It also
> enabled many countries and corps to wipe out their debts.Not the Third
> World of course; for them is uttered the mantra 'inflation never
> benefits anyone; pay your debts; give us your children, your tired and
> hungry masses, only not the actual people, just the exports they make -- as
> retribution... in exchange we'll bullshit you about freedom and give
> you these coloured bits of paper.'
>
> In 1991, 1993 and 1994 the Yeltsin govt wiped out the savings of the
> population thru hyperinflation and at the same time made it
> possible for criminals to purchase fantastically valuable assets, nickel
> processors, oil reserves and the like, for peanuts in devalued currency.
>
> Now Chubais, Chernomyrdin and Yeltsin planned a new hyperinflation
> to wipe out whatever pathetic savings ordinary Russians had scratched together,
> while once again allowing the oligarchs and their 'Central' Bank to welsh on
> thier debts -- meanwhile even the IMF now speaks of the 'benefits'of inflation
> to help Japan's greedy bankers similarly welsh out...
>
>
> Mark
>
-- Rosser Jr, John Barkley rosserjb at jmu.edu