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Ukraine Has 272% Inflation. Is This Bad Or Is It Good?

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Inflation is officially 28.5 percent, but, according to Johns Hopkins professor Steve Hanke, it's really more like 272 percent. And that's only going to get worse as long as Ukraine's currency does.

When a currency is dying like this, it's hard for the inflation statistics to keep up. But, as Hanke explains, we can use the exchange rate to figure out how much prices are really going up. There are a few ways to think about why this is, but the most intuitive is that a cheaper currency means higher import prices, which spills over to the rest.

In any case, this tells us that Ukraine's annual inflation is already 272 percent, and, even worse, is picking up speed. Indeed, its monthly inflation rate is 64.5 percent—which translates to 39,000 percent inflation over a year

LInk: Washington Post

There are many threads at the moment about 'good and bad deflation'.

Well, our own lovely George Osborne has argued that the UK has good deflation, while those foreign chaps have it bad. And on the Spanish thread, economist Edward Hugh suggests that 'good deflation' is by no means impeding the 'Spanish recovery'. . . may even be helping.

So what should we think about Ukraine?

I have a girlfriend from Ukraine staying at the moment who is soooh looking forward to paying off her credit card bill at the end of the month . . . buy with good money and pay back with bad. No deflationary, deferred purchase syndrome here. More like shop 'til you drop.

So what does the team think?

Could 39,000% inflation p.a. be good, more effective than QE? Crazy I know . . .

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Either too much money printing - or the reduction in production and supply to shops (cut off by militant border check points), mean that people who have items of limited supply can raise the price. Inflation is a symptom of a dysfunctioning economy.

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I have a girlfriend from Ukraine staying at the moment who is soooh looking forward to paying off her credit card bill at the end of the month . . . buy with good money and pay back with bad. No deflationary, deferred purchase syndrome here. More like shop 'til you drop.

Somehow I doubt that, that would only make sense if her salary was going up by the inflation rate on a monthly basis, which is unlikely to be the case.

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Inflation to deliberately cause an economic crisis? Question is who gets to resolve the crisis Putin or America.

Very interesting question.

How is hyperinflation normally resolved? I have read travel books about South America . . . and those times of zonking hyperinflation when you would have to phone down to the hotel desk in the afternoon to find out what the bill would be by the evening . . . just mindbending.

And when does it all stop exactly? You only ever see it in hindsight,

I don't think there is anything deliberate about this inflation in Ukraine . . . it's a by-product of the general economic malaise. . . as I posted earlier, no one really did their sums . . . and now it looks like neither Putin nor America want to pick up the tab.

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Very interesting question.

How is hyperinflation normally resolved? I have read travel books about South America . . . and those times of zonking hyperinflation when you would have to phone down to the hotel desk in the afternoon to find out what the bill would be by the evening . . . just mindbending.

And when does it all stop exactly? You only ever see it in hindsight,

I don't think there is anything deliberate about this inflation in Ukraine . . . it's a by-product of the general economic malaise. . . as I posted earlier, no one really did their sums . . . and now it looks like neither Putin nor America want to pick up the tab.

Somehow you missed the Putin's invasion.

Anyway the help is on the way; plus the reforms so Ukraine economy will grow like the rest of Warsaw pact countries in EU ...

https://en-maktoob.news.yahoo.com/ukraine-parliament-debates-reforms-needed-crucial-imf-loan-205500537--finance.html

The IMF has pledged to throw Ukraine a $17.5 billion (15.5 billion euro) lifeline, but has conditioned the aid to the adoption of painful reforms.

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just start using dollars

not such a good idea going by argentina and zimbabwe.

I did actually do a somewhat larger post but wasn't sure how it would go down as it covers the ukraine problems, history and meddling. I was trained to fight wars by understanding that the origins are usually laid down in the past.

ukraines current problems go back to the US backed orange revolution which like most of the decommunising ones were flawed from the start producing a govt that an african dictator would be proud of, this set the rot in with yanukovich following and the current coup was no better in its intentions, helping no one but those wanting to gain power, steal or rub russias nose in it.

inflation in theory could help ukraine if its international debts were negotiated in hyrvnia, a currency worth less would mean that paying debt off would be cheaper, unfortunately the world has moved on since the wiemar republic and ukraine will be savaged by a weak currency with debts in dollars or euros and raped by the EU/IMF terms just like greece is, there is no way they will have an election to rectify the putsch govt anytime soon so their only hope for any sort of peace is to federalise as per russias wishes or let the proper maidan take hole. the EU will go along with that as it wants to get its hands on the potential gas fields in the west.

the maidan was a populist call for revolution which was hijacked, its not reported but the socialist maidan protests carried on until it was swept away by the current lot of nest featherers and right wing thugs. yanukovich refused to arm the police or use force until the snipers started cutting down police and protesters alike without a care who they shot. the way the current govt is breaking ceasefires and its instant move to crush dissent in the east is worryingly under reported in the west along with the truth over who was shooting at who in the maidan, this lack of reportage and accompanying outrage has just encouraged more overt unpopular actions.

it is interesting to see the fake reports in congress claiming russian invasion and the outrage in washington over the minsk agreement actually working. america wants a distracting war. peace just will not do. so ukraine will continue to suffer as more false flag operations kil its innocents. like greece, turkey, libya and syria its main chance of reprieve lies with russia, the brics pact, the brics bank and dedollarisation.

the UK too would benefit far more from increased interaction with russia than the EU and a declining US desperately clinging to the last vestiges of its empire. the US is banking on being too big to fail. so when it does it will be eventful :wacko:

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there is no good inflation, except for the financial parasites who borrow short and lend long. Inflation is a transfer of wealth from us to them. If you think that's good, please donate my share out of your hard earned income.

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The Weimar hyperinflation was largely successful in running off the murderous reparations imposed on Germany after WW1 for very little real cost (unless you include the subsequent rise of Nazism as a reaction to the 'Jew confetti' of the time).

Almost uniquely, Minsky applauded rather than condemned the stagflationary episodes of the 1970s, arguing that the Fed's inflationary zeal averted a self-reinforcing debt depression following the US govt's default from the gold peg in 1971.

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Ukraine central bank declares fourth-largest lender insolvent

KIEV, March 3 (Reuters) - Ukraine's central bank declared the country's fourth-largest lender, Delta Bank, insolvent on Tuesday, saying it had adopted risky policies during a period of economic turmoil. central bank has taken steps to protect the banking sector, including offering refinancing for lenders suffering severe capital outflows. "These steps temporarily improved the situation for (Delta), but did not lead to a significant improvement of its financial condition," the central bank said.

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it is interesting to see the fake reports in congress claiming russian invasion and the outrage in washington over the minsk agreement actually working

Well, the Russian forces in Ukraine have been fairly well proven and if you think that the peace described in either of the Minsk agreements was working then you need your head examining.

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Well, the Russian forces in Ukraine have been fairly well proven and if you think that the peace described in either of the Minsk agreements was working then you need your head examining.

oh really!? show us proof. on the other hand we know for sure, because they told us, the UK has sent troops and the US is sending a combat battalion to Ukraine. These people desperately want war because the west is bankrupt.

http://www.zerohedge.com/news/2015-03-02/despite-russian-warnings-us-will-deploy-battalion-ukraine-end-week

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oh really!? show us proof. on the other hand we know for sure, because they told us, the UK has sent troops and the US is sending a combat battalion to Ukraine. These people desperately want war because the west is bankrupt.

http://www.zerohedge.com/news/2015-03-02/despite-russian-warnings-us-will-deploy-battalion-ukraine-end-week

Quoting ZH which quotes an article from Sputnik news that doesn't seem to exist anywhere else. Though I am aware the UK are sending 75 troops to Kiev to train people I can't find anything about America troops being sent there. I don't see a problem with it either to be honest.

Regarding Russian troops in Ukraine - http://www.reuters.com/article/2014/08/28/us-ukraine-crisis-russia-soldiers-idUSKBN0GS0N120140828

Also the seperatists seem to have a lot of equipment that Ukraine has never owned, for example the T72-B3. Not only that, but Grads are being fired from Russia into Ukraine - http://www.theguardian.com/world/2015/feb/17/russia-shelled-ukrainians-from-within-its-own-territory-says-study

This Minsk agreement will end when the separatists move to take Mariupol in the near future.

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Anyway the help is on the way; plus the reforms so Ukraine economy will grow like the rest of Warsaw pact countries in EU ...

Get a grip, Damik.

These countries are some of the fastest shrinking countries in the world.

Thanks to joining the EU, Latvia and Lithuania lost nearly 20% of population, Latvia 18% of GDP . . . . Hungary, Bulgaria, Romania, Latvia, Estonia and Lithuania are still in the top 20 countries with population decline in 2014 . . .

Ukraine was already Europe's fastest shrinking country . . . I would imagine the reforms of higher taxes and pension cuts (how do you cut a pension of 30 Euro a month) . . . not to mention 272% inflation . . . will drive even more away.

You really do live in cloud cuckoo land . . . or should that be coup-coup . . .

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Ukraine unofficially has 272 percent inflation Ukraine's currency has fallen 70 percent since the start of 2014, and that's pushed it into hyperinflation. It happens after wars or revolutions, when governments have to print the money they need because there's not much of an economy left to tax—which brings us to Ukraine. It had a revolution, it has a war now, and it's all but broke. Inflation is officially 28.5 percent, but, according to Johns Hopkins professor Steve Hanke, it's really more like 272 percent.

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Ukraine's annual inflation hikes to 34.5% year on year

The inflation rate in Ukraine soared to 5.3% in February 2015, while inflation spiked 3.1% in January 2015. Thus, according to the State Statistics Office, the annual inflation rate increased from 28.5% in January 2015 to 34.5% in February 2015 year-on-year. Prices for food and non-alcoholic beverages in February rose by an average 5.7%. Prices for fruits and vegetables skyrocketed by 17.5% and 15.2% respectively. The 2014 inflation rate in Ukraine totaled 24.9%.

Ukraine is becoming Europe's Zimbabwe

Edited by rollover

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Get a grip, Damik.

These countries are some of the fastest shrinking countries in the world.

Thanks to joining the EU, Latvia and Lithuania lost nearly 20% of population, Latvia 18% of GDP . . . . Hungary, Bulgaria, Romania, Latvia, Estonia and Lithuania are still in the top 20 countries with population decline in 2014 . . .

Ukraine was already Europe's fastest shrinking country . . . I would imagine the reforms of higher taxes and pension cuts (how do you cut a pension of 30 Euro a month) . . . not to mention 272% inflation . . . will drive even more away.

You really do live in cloud cuckoo land . . . or should that be coup-coup . . .

Your views are not current...... your stats are from 2008-2009..... we are now in 2015.... why not check who has the fastest growing economies in the Eurozone......Hint, its Latvia. and Estonia is doing a pretty awesome job asewll

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Your views are not current...... your stats are from 2008-2009..... we are now in 2015.... why not check who has the fastest growing economies in the Eurozone......Hint, its Latvia. and Estonia is doing a pretty awesome job asewll

No. The population decline is 2013 - 2014 . . . the countries I list are still in the top 20.

Yes, it is easy to 'grow' after losing 20% plus of GDP. Last years' stats showed Greece as a top performer . . . but where's the 25% it lost?

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There is countless videos of the Ukrainian government indiscriminately shelling civilians in the Eastern Region. There all have smartphones like us.

Realistically if Russia rolled in tanks and troops, it would be all Liveleak and Youtube within minutes.

The satellite technology can probably read the newspaper your reading, yet there hasn't be any clear proof of an invasion??!!!

The last count someone mentioned was almost 30 times of Kiev crying Russia has invaded.. blah..blah...

Just take a look at two areas of interest creeping into Ukraine: GMO's (Monsanto) and Fracking. With very fertile land and big shale reserves, the US is calling in it's friends to do what they do best. With a billion dollar weight from the IMF the government will have no choice but to sell, sell, sell.

We'll see adverts for donating to Ukrainian Aid next year after the IMF has bled them dry. Poor people :(

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