Philip Haslam and Russ Lamberti join me to talk about their book on Zimbabwe and hyperinflation, When Money Destroys Nations. We chat about:

• Where hyperinflation has happened before
• The culture of debt & entitlement
• Print and spend vs loan and spend
• The stages or ‘gorge moments’
• Financial repression
• Liquidity obfuscation 
• How might future hyperinflation episodes play out

Links:

• Website: whenmoneydestroys.com
• Book:  When Money Destroys Nations
• Russell Lamberti: @RussLamberti 
• Philip Haslam: @HaslamPhilip
• Book twitter: @WMDNbook

Sponsors:

• Swan Bitcoin
• Unchained Capital (code LIVERA)
• Knox Custody
• CypherSafe (code LIVERA)

Stephan Livera links:

• Show notes and website
• Follow me on twitter @stephanlivera
• Subscribe to the podcast
• Patreon @stephanlivera

Podcast Transcript:

Stephan Livera:

Philip and Russ, welcome to the show.

Russell Lamberti:

Great to be here, Stephan. Thanks for having us.

Philip Haslam:

Thanks Stephan.

Stephan Livera:

So guys do you want to just tell us a little bit about yourselves? Phillip, let’s start with you.

Philip Haslam:

Thanks Stephan. My name is Philip Haslam. I’m the author of the book When Money Destroys Nations. I live in South Africa, passionate about some money, and I’m currently working as the head of communications at a crypto project in Zimbabwe called Zimbo cash.

Russell Lamberti:

Yeah, Stephan it’s really good to be here. I joined Phil on the book project full, brought me in as a coauthor and it was really exciting to write the book and just be a part of that process. And so I’m a professional economist. I’ve been a professional economist for about the last 15 years. I run my own consulting business where I provide macro economic research, and strategy advisory to professional investors. And I, you know, predominantly well more than predominant strongly come from an Austrian school perspective and apply that to kind of real world finance and macro and business cycles and so on. So that’s my kind of background and a was a coauthor with Phil, on the book.

Stephan Livera:

Fantastic. And now gentlemen, I’ve had a chance to read the book. I really enjoyed it. I think there were a lot of interesting insights in there that I’m sure my listeners will really enjoy. I’d love to just start with perhaps Phillip, you could just tell us, why did you write this book?

Philip Haslam:

Thanks Stephan. Russell and I were going around doing talks around South Africa around the world. We had set up a presentation. It was 2008 and after that we were doing these talks and basically our message was look, we’re really concerned about money printing as a solution for governments. And we were presenting I think it was actually to an organization that represented one of the reserve banks of one of the countries. And it was at that talk that Russell actually turned to me and he said, you know, we’ve actually got a country right next door to us. That is an example of what happened when a country printed money on a large scale. And I’m telling you, there are stories there that people have never heard. And I thought that was very interesting. And I have a lot of Zimbabwean friends and I thought, well, why don’t I just go and interview those, Zimbabwean friends and their stories fascinated me.

Philip Haslam:

You know, you know, we have no idea what it looks like or what it feels like to live through hyperinflation. And these were ordinary people that had come out of hyperinflation and just had really, really interesting stories. So I went to Zimbabwe, I traveled there and just thought I would learn more and ended up just packing my days, interviewing people, you know, across the, the kind of breadth of society, just hearing their stories. And yet, I mean, the interesting thing was that we would start typically start, people would say, look, you know, I can’t really remember the stories I’ve kind of forgotten them, you know, but as I would ask questions like, you know, what happened when the store’s emptied or what did you do when you couldn’t get any fuel? Then the stories just started to come and you know, the interviews would last sort of up to two hours. Typically, you know, I’ll be scribbling down as much as I could. And it gathered the, I mean the material just grew and grew and grew, and it became very clear of coming back to South Africa that there was a lot of material and it would be perfect for a book. And then Russell joined me on the team and together we created the book and you know, the rest is history, I guess.

Stephan Livera:

Yeah. Fantastic. And I think the thing most people would think about here is they would say, “Oh, look, that can’t happen here.” Right. And yet there are many countries this has occurred in around the world. Russell do you want to offer any comments on that?

Russell Lamberti:

Yeah. I mean, one of the things we kept thinking throughout the book is that there is this theme of “It can’t happen here”. And yet it happened in a developed modern country like Germany. You know, it’s happened in all kinds of economies and countries across the world. It’s not something that just happens overnight and it’s not something that you know, you click your fingers and suddenly, you know, Australia is suffering a hyperinflation. This is a process that does take time. And it’s not an inevitable process, but if you keep making bad monetary decisions if the central bank continues to bail out the banking system continues to drop interest rates to zero, continues to print money, continues to provide liquidity and debase the currency.

Russell Lamberti:

There’s considerable risks that you move towards this path. And it doesn’t have to end up in full blown, you know, million percent hyperinflation but high or kind of low hyperinflation possibilities are really a threat for, just about any currency for any country on a fiat government run money system. And so I think people have to be vigilant and have to hold, you know, politicians and central bankers to account. And one way that that’s being done is through, is through decentralized cryptocurrencies. So that’s very exciting, but certainly it is one of those things where people do believe that it’s always going to happen in some far off country. And when central banks misbehave, when politics starts to control the supply of money all bets are off Stephan. This can unleash some terrible forces.

Philip Haslam:

I could add to what Russell just said in the last a hundred years, there’s been 56 instances of hyperinflation. That’s on average, more than one, every two years, it’s a regular event. So you know, standard thing that happens, countries, print money, few people know that in terms of kind of the cultural aspects of hyperinflation America has had hyperinflation twice. It’s happened in many developed countries of the world. And it’s happened in many rural undeveloped countries of the world. It’s indiscriminate, in it’s application, you know, money printing taking place over a long term, leads to inflation. And if that’s unchecked, it leads to hyperinflation. It just happens. And yet very few people are talking about it because countries around the world have printing money on a huge scale.

Stephan Livera:

Yeah. And what would you say are some of the typical preconditions? From reading the book, one of the preconditions that I saw was essentially that governments run up very large debts.

Philip Haslam:

Yes. I mean, money printing is always driven by debt consumption. So, you know, in a normal economy, people work hard, you work hard for the goods that you get okay. And then, you know, there’s this idea that maybe you could borrow from other people and consume. And borrowings are great while you have access to credit when the credit runs out, it’s not so great governments have a unique third option, so they can, they can initially they can have a productive society and get taxes and spend money on things from tax revenue or they could borrow. And that’s typically what they do. They borrow and they rack up significant amount of debt. And then at some stage they begin to realize that they can print money to continue consuming and print money to repay their debts.

Philip Haslam:

And there’s typically a major pivot moment. And that pivot moment is when lenders who are lending money to the government, begin to get concerned that the government is going to, is not going to be able to repay its debts. Okay. And that lending moment is typically a credit crisis of some form or a banking crisis, a crisis of confidence where people suddenly stop investing in bond markets and the government is suddenly faced with a significant decision. Does it tighten its belts? It basically has a much shorter rope in terms of its spending and does it actually retrench its people, its employees, all of those sorts of things or continue spending and it can continue spending by accessing the money printing press and you know, bailing itself out using the central bank.

Stephan Livera:

Yep. I’m also curious as to whether you, either of you have any reflections on whether it matters that it’s primarily public sector debt versus let’s say private sector debt, let’s say there’s a country and a lot of the private companies are running up high debts. How would you contrast there? Would we say here, it’s basically about mostly public sector debt that matters in this case?

Russell Lamberti:

Yeah. Stephan, I think, I think that’s a good question. I think what we see historically is that is that public sector debt is definitely a very strong driver, but I don’t think it has to be exclusively that at all. I think it’s the entire sort of political economy around, around debt and around credits. And when you have large corporations that get excessively indebted, they have a lot of political influence to curry favor with the authorities and with the central banking authorities to monetize those debts.

Russell Lamberti:

So it’s, I think the better way to think about it is that you get to a situation where debt needs to be monetized politically speaking, there’s an imperative to monetize the debt, to basically make the debt go away. And you do that by printing money. You do that by replacing the credit instruments with cash. And so I think this is an important point because a lot of people who don’t see high inflation as a plausible scenario, that they keep bringing up the specter of debt deflation, which is essentially when the banking system will call in credit and money supply, fiduciary media, broad money supply will contract. And that will be this kind of deflationary event and that’s mechanically and theoretically, correct. That is certainly what can happen in an economic crisis. You will get banks calling in loans and you can get this kind of deflationary event.

Russell Lamberti:

And to a large extent the lack of manifestation of inflation in the major economies of the last 10, 20 years is partly explained by this, ongoing kind of a debt deflation imperative in a debt saturated system. So that is there, but the political imperative that continues to push back against that debt deflation is the debt monetization imperative. And you can you know, it doesn’t matter how big the pile of debt that wants to deflate. If you like, it doesn’t matter how many loans banks want to call into, to let’s say, restore the health of their balance sheets or become more prudent. The central bank can always just press control P and create more digits and create more money. And so the extent of the deflation threat in this unstable credit system is really the, also the extent of the inflation threat.

Russell Lamberti:

It’s the other side of the coin where you have this economic imperative for deflation, and you’ve got this political imperative that matches it. And I think exceeds it in many instances for inflation and quite right. It’s a monetization not just of government debt, but of corporate debt. And I think in the final analysis probably of household debt as well, it becomes a sort of bailing out of everyone via the printing press. But of course, everyone ultimately pays a terrible price for that because it’s shortcut economics. It’s not a real solution.

Stephan Livera:

Excellent comments there Russ one other question I’ve got that comes to mind on this whole question of printing money. Now, some people might be thinking, Oh, well Zimbabwe they were like the basket case. They were doing print and spend. Whereas in the other countries of the world, maybe the ratio is a little bit different, right? Because you have central bank created money, and then you have the money that’s created by private banks, but on the basis of reserves created by central banks. So it’s more like rather than print and spend, it’s more like loan and spend. So I’m wondering whether you, whether you guys have any comments on that, like, does it matter which kind or does one eventually become the other?

Russell Lamberti:

I wouldn’t mind jumping in and then Phil’s welcome to pick up from where I leave off, but what you saw in Zimbabwe, we from the mid eighties through right through the 1990s, you know, people think it’s a basket case this poor African country, but Zimbabwe, we had quite a sophisticated banking system was a banking system. That was very much based on the South African banking system, which itself was very much an offshoot of the British banking system. These were pretty sophisticated fractional reserve banks. And what you saw through the eighties and nineties was actually not so much central bank print and spend, but it was actually a loan and spend kind of system. And you actually saw the Zimbabwe dollar depreciating substantially through that sort of 10, 15 year period. Bank credit was really the main game in town, aided and abetted of course by easy monetary policy from the central bank.

Russell Lamberti:

But it was really a huge expansion of bank loan assets and bank balance sheets. And I think that goes precisely back to my previous comment is that the print and spend tends to be preceded by the loan and spend model. And once the loan and spend model is excuse, the pun, spent. Once it’s tired and you know, once it’s run out of runway that’s when the print and spend model. So yeah, the Print and Spend model kind of takes over from that loan and spend model. And that’s precisely why we have that imperative, that political imperative for debt monetization. So this is a process that you see through most systems, and that’s very much something that we can see happening in the major economies now.

Russell Lamberti:

You’ve had a few decades now of extreme loan and spend policies by the private banks, but for the last 10 years, I mean, you know, really longer, but certainly for the last 10 years you’ve had, you’ve had kind of direct print and spend yes, it’s accompanied by all kinds of you know financial repression or kinds of middlemen through, you know, the fed using primary dealers and not directly monetizing the debt but going via a primary dealer and buying the treasury securities and so on. But basically it is a becoming a print and spend system more and more. And in fact, you’ve seen that very much through the Corona crisis. The checks that have been sent in the mail to people in the United States are indirectly, but only slightly indirectly, you know, funded by the fed.

Russell Lamberti:

The US government has created these special purpose vehicles, so that it looks like it’s the US department of the treasury that’s doling out this cash, but really we know that the fed is just printing it up in the background. So we are at a situation where loan and spend is bleeding now into a kind of print and spend model. And I think that’s really important for people to understand Zimbabwe was not just a case of Robert Mugabe came to power and he just started, you know, rolling off these, you know, reams and reams of paper money that littered the streets. It was first and foremost a problem of unsound banking that then, and public sector management and fiscal management that then graduated into this big print and spend problem.

Stephan Livera:

Excellent. Phillip, anything to add there?

Philip Haslam:

Yeah, I think I would add you know your previous question to this was, you know, is it government debts that drive money printing? Was it personal debts and household debt that to drive money printing? And the answer is it’s all debt because there’s this layer of the economy that facilitates all this and that’s the banks. And the banking system effectively, you know, is links all debts to one another. And you get this loan as Russell say loan and spend thing. And then when the banks when the banks are shown, to effectively be insolvent the government has no other solution other than to print money. And so, you know, what we wanted to do is to take Zimbabwe as a template and to really break it down, but it’s a template that applies to all nations.

Philip Haslam:

You know, there’s this lie that goes around, you know, with, for instance, with communism, people say, you know communism works. It just wasn’t implemented properly in these other countries. And it’s the same thing that we hear with money printing like yah, like Zimbabwe was a banana Republic. And so of course it was going to go into hyperinflation, but we, we’re special. We can create money from nothing, and we’ll do it in a very sophisticated way. And we’ll avoid the consequences of hyperinflation, but unfortunately the economic consequences of money printing are the same everywhere. And so what you see working out in the world today is perhaps a more sophisticated version of what happened in Zimbabwe, but it’s the identical sort of process that they had in Zim.

Stephan Livera:

Yeah. And also, I’d love to hear if you’ve got any insights in terms of what were the motivations of the government of the time. I mean, perhaps from your interviews, there’s some insights there, cause like surely maybe from an outsider, you might think, surely they knew this would happen. Why did they just keep doing it?

Russell Lamberti:

Phil, I’ll go quick. You interviewed a lot of people on the ground. I mean my perspective Stephan is just that slightly bad political decisions can snowball into very bad political decisions, you know, and you get this kind of vicious spiral, bad policy begins bad policy. And you know, dirigiste governments who make bad decisions think they can then get out of those bad decisions by making even worse decisions. And I think that to a large extent sort of explains a lot of what we saw in Zimbabwe when Robert Mugabe came to power in 1980.

Russell Lamberti:

I think there was a lot of goodwill. There was a lot of good intentions. We talk a little bit about that in the book. You know, there was this historical kind of racial animosity. There was also tribal animosity amongst the indigenous African groups. So it was a divided country, but there was goodwill and there was a lot of international kind of goodwill towards Zimbabwe. And then what you started to see was this kind of gradual institutional unraveling, and you started to see things deteriorating, and you started to see political pressure groups getting, like the war veterans, for example, getting very frustrated that they weren’t moving ahead economically and financially. And you had these major political sort of forces putting pressure on the government to make conditions better.

Russell Lamberti:

And so it was just, you know, one after another, just small, bad decisions that started to mount up, it was, it was, you know, death by a thousand cuts through the course of the 80’s and 90’s. And by the time you got to that black Friday event in 1997 you know, the floodgates were kind of ready to burst open. And and once that happens, I think the politics takes on a life of its own. The social political dynamic of this thing really comes to the fore. I mean, yes, we know now with hindsight that Robert Mugabi, you know, turned out to have to be a kind of dictator of sorts and you know, ended up grabbing hold of the country with quite an iron fist. I don’t think that was necessarily always the intention.

Russell Lamberti:

I think we got there through a series of bad decisions, the political incentives that then sort of are created around all this, and once the floodgates had opened, and once the horse had bolted, I’m throwing a lot of metaphors here but you just saw the politics really get ugly. And I think there’s another lesson there in this, because we look at the major economies of the world. We look at sophisticated developed countries and they’ve historically had kind of fairly orderly politics, but we’re actually seeing really disorderly politics starting to take shape as we’ve got, you know, more and more money printing as we’ve got, you know, we’re now a full decade. Well we’re actually about 12 years into the, you know, the really extreme money creation by global central banks since the financial crisis.

Russell Lamberti:

Isn’t it interesting that the politics is also getting uglier as we create these ridiculous asset bubbles, as house prices, move away from young people, trying to form families as income inequality grows because of the Cantillon effect of all this money printing. Isn’t it interesting that the politics is getting more and more volatile. It’s getting uglier and the politicians are increasingly being compelled to respond in more and more irresponsible ways using management policy and fiscal policy and more and more in irresponsible ways, that is something we saw in Zimbabwe as well. It didn’t start out as a banana Republic. It got there through a thousand cuts.

Stephan Livera:

Yeah, really interesting comments.

Philip Haslam:

I must say I was smiling at your question. I think it’s a funny question, because your question basically was, you know, surely the government would have known how silly it was to print up a whole lot of money. Okay. In a nutshell, that’s your question.

Stephan Livera:

Yes.

Philip Haslam:

And you know, and that’s said in the context of of a world environment where governments are printing trillions and trillions of dollars. And we can say the same thing. Surely they would know they know that no one can just create money from nothing and try and stimulate an economy. And the bottom line is that it’s driven by a debt culture with it. If you don’t print money, the debts are going to come, the banks are going to go insolvent. Okay. So there’s an imperative that, you’ve got to fix a broken system. And and it’s also driven by an entitlement culture where people are beginning to say more and more and more. Now, what about me, where’s my money and the government say yeah, we can rescue you. We can rescue you. And that’s all driven by this debt consumption, debt drives the money protect process is what drove the money printing process. And in 1997 with Robert Mugabe, and it was everyone, there, that’s what’s driving the money printing process now.

Stephan Livera:

Excellent comments. Then also, I’d love to hear a little bit about the time periods that we’re talking about because, you know, people might be like, Oh, they printed a lot of money. Does that mean inflation’s happening tomorrow? Well, no. It takes time for that to play out. So if you’ve got any comments you can offer from, you know, like a rough timescale for listeners to think of roughly when the, let’s say the point at which the government debt started to rise a lot to the eventual hyperinflation, like how many years are we talking?

Philip Haslam:

The Black Friday moment was in 1997 and the currency finally collapsed 11 years later in 2008, beginning of 2009. So 11-12 years, I think just to add to that Russel and I get this question often, and we want to be very humble in our abilities to forecast. We just, we think that there’s some basic principle, qualitative comments around these things. The first is that it takes time. It takes time, no one just sort of slips into hyperinflation. You know, you’ve start printing money and the next day you’re in hyperinflation, it actually takes time. And the next thing is that money reflects is the other side of it, of transactions in an economy. And so it reflects like extremely chaotic kind of economic system and the way that money flows in an economy is nonce and it’s different in every economy. So we are humble in our abilities to predict, but in a nutshell it takes time.

Stephan Livera:

Yeah, sure.

Russell Lamberti:

Yeah. I would just, I would just add to that. It’s a very good question. It’s very important. And I think, you know, I think that there were a lot of people in 2008 when they saw the quantum of what was happening and they saw the word that starts with a T you know, the trillion word. They kind of got a huge fright because trillions historically have only been associated with hyperinflations.

Russell Lamberti:

Typically. And you know, before that the world dealt in millions and billions and billions and maybe hundreds of billions but suddenly trillions were being thrown around. And I think that, you know a lot of Austrian economists a lot of kind of people who are more monetarist in their focus, they saw that. And they said, man, hyperinflation in the US is around the corner. And I think they, what they didn’t factor in was a couple of things. The first was that a trillion dollars adding onto the existing US money supply is not actually that much. It’s not anywhere near the sort of quantum of monetary misbehavior, if you like, that would be required to generate serious inflation dynamics. I think the second thing that was missed was the debt deflation that was happening on the other side of the ledger.

Russell Lamberti:

And I think the third thing was probably that because of sophisticated financial repression, a lot of this money printing can be channeled into asset prices. And it gets into this asset price vortex almost where it doesn’t spill out into obvious consumer price inflation. I do think you have rising cost of living. I think there’s systematic ways in which the CPI indices underestimate inflation and so on, but let’s be honest, you haven’t had high or hyperinflation in those economies. And I think for the reasons I explained what you’ve got right now going on in the US is just a major, massive quantum of money printing. You’ve got alternative kind of Austrian defined money supply growing at about probably 40% year on year, maybe 30% year on year in the US so that added about a third to the money supply just over the last of the last six, nine months which is astonishing.

Russell Lamberti:

So that doesn’t mean, again, that doesn’t mean hyperinflation is imminent but to Phil’s point, it does take time. I think the final thing I would add on this is that if you, if you consider the, the size of the capital base of these major economies, you know, Zimbabwe was, it had a sophisticated banking system, but it was all things considered a poor country with a relatively low capital per capita sort of base. These major economies are wealthy. They’ve got tons of capital. They’re consuming a lot of capital. They’re eating into their savings that, you know that they’re creating the makings of a very, very big crisis, which I think is to a large extent upon us and now starting to unfold. But if it takes, you know, it took, it took 12 years or so in Zimbabwe from, from the black Friday event, it really took about 20 years of real financial mismanagement and misbehavior. So, you know, in a developed economy with more sophisticated systems with more means and mechanisms of financial repression and with a more accountable political system that sort of holds the mandatory policy together a little bit more tightly than than it did in a place like Zimbabwe. This is going to take longer. So this is not an overnight process, but I think what’s interesting,

Russell Lamberti:

What’s important is that you can see the negative, social and economic effects of money printing. How long before you get hyperinflation. And I think we’re experiencing that now in the US and many other places.

Stephan Livera:

Excellent. And I’d love to now discuss a little bit about some of the process and actually what happens. And you mentioned even like this, we might talk about even this idea of the culture of inflation. So in the book, you’ve got the six Gorge moments. And so I guess each of these are kind of good milestones or things that listeners can think about to try and look out for these signs of inflation. And so the first one you mentioned is this idea of past inflation becomes future inflation. i.e. Instead of people calculating based on the inflation CPI for the last year, they now start to expect inflation in the future. Can you elaborate a little bit on that idea?

Philip Haslam:

Sure. So what happens with money printing is as you print money, it filters into the economy and it causes prices to rise. And it typically does that in a delayed way. So you print money and the person who prints money can buy real goods and services for himself or for themselves. And use that money that they printed and that newly printed money then filters all the way through. And slowly people begin to experience these prices beginning to rise, but you can’t fool people on an ongoing basis forever. After a while, they begin to realize that prices are going to rise and Oh, there’s so many printing that’s happening. These going to result in prices rising. And the time lag for those prices are rising, begins to shorten.

Philip Haslam:

And, you know, we call these gorge moments, the cultural shifts that happen in an economy on the way towards a hyperinflation, but as the government begins to print money, the timeline between the printing of the money and the prices rising shortens. And it gets shorter and shorter. And eventually an important gorge moment happens where people begin to raise prices in expectation of the money printing, okay, now money printing is following the prices rising rather than causing the prices to rise. And that’s an important moment where inflation begins to accelerate.

Stephan Livera:

And then following from that, we see the next stage, which is money shortages. So what does that look like? Perhaps Russ you want to take this one?

Russell Lamberti:

Yeah, well, as full said, so as people start raising prices and expectation of money printing, one Of the risks that starts to emerge is that prices rise at a faster rate than new liquidity is actually being injected into the system. And so you get this experience of money shortages. It’s this very kind of absurd, paradoxical thing that goes on during a hyperinflation where you’re actually printing so much money. You get this, you get what feels like money shortages. Now, of course, that’s the moment that really should be where the liquidative, painful recession takes place. And you reset the economy, you have a big deflation, and you kind of clear out the malinvestments, you clear out all the mess and you kind of move on. But so prices are rising faster than new money’s coming in. And what’s going on there is that the standard of living is going down.

Russell Lamberti:

You’re actually starting to feel the bite of the real resource constraints that are now manifesting in this, in this breaking economy if you like. And again the political imperative there is to is to alleviate the money shortages and the way you do that, is you print even more money, and this is how you get this, kind of vicious cycle of printing and prices go up inflation, going up, prices going up and an accelerated imperative for new printing. So the great irony of hyperinflations is that for a lot of the time, it feels like you’ve got a tremendous shortage of money. Not a lot of people realize that, but it’s a really interesting feature of hyperinflation.

Stephan Livera:

Yeah. You hear of stories where people don’t have the right change or the right coins and notes and things. And then they’re like rushing back to try and make sure they’ve got the right change. So they’re not dramatically overpaying and that they’ve got enough and that sort of thing. And even speaking of being at the stores, I think that’s the next Gorge moment. Right? So some of the stores start to empty out. So what does that look like?

Philip Haslam:

Yeah, so the businesses at this stage are undergoing a lot of pressure and the pressure is very subtle. It’s very difficult to measure or to actually it’s very difficult to pin down because you know, you as a business person, you sell some goods and you make a profit, but not to restock your store, you need to go buy new goods and the prices have already risen by the time you buy the goods. And by the time it’s delivered to you and you have to pay then your effective margins have began to shrink. And then, so you raise your price in response and you sell your goods in the store, but by the time you restock your store, the prices have risen again. And so your margins just, you get this margin creep and and your input costs get higher and higher and higher relative to your sale prices.

Philip Haslam:

And so the next Gorge moment is the moment where businesses begin to experience real losses, even though the selling prices of their goods are rising on a daily basis. And at that moment, stores begin to empty. You start to get shortages across the country and you know, it typically affects your manufacturing sector first and then your retail sector. And you know, it affects the moment of businesses becoming unprofitable is a different moment for the different types of industries. But you basically getting you get, the industries begin to shut down at that stage.

Russell Lamberti:

I would just add quickly that a what’s going on here as far as what Phil’s pointing out is that what’s actually going on yet is a real, is a decline in real resources. And you could bring in Say’s law here. We can only, we can only ultimately consume what we’ve actually produced, right? And you just you can’t produce as much because the economy is actually in a hyperinflation going through a major depression event all the nominal variables, GDP, in nominal terms, the stock market in nominal terms, these are all going up, but in real terms, the economy is contracting 10, 20, 30, 40%. I think the Zimbabwean economy probably contracted about 70 or 80% at it’s peak decline. So you’ve got this major, real resource constraint going on. So part of the reason for the empty shops is just that there’s not enough stuff being produced.

Russell Lamberti:

The other big one that does almost always come in a hyperinflation is price controls. So the price controls are critical because as you put price caps, these are politically motivated ways in which you try and pretend to your population that you as the government are stopping the inflation. So you put price controls on, well, that’s going to cause empty shops, you know, almost immediately, because you’re going to get an over consumption of goods and under supply relative to the market price, which is now hurtling much higher. And so a huge black market develops a huge illicit market develops outside of the stores for goods and services, but the official sort of state regulated businesses they just run out of products. And you had a draining out of products in Zimbabwe and supermarkets, very, very similar to what you’ve seen in Venezuela in the last few years.

Stephan Livera:

Yes that’s a really good point about the price controls. I’ve definitely heard of that phenomenon also. And then we also reach a point, well next phase is end of lend. So banks stop lending, why do they stop lending?

Philip Haslam:

These are all dynamics that happen because the currency is getting weaker and weaker effectively what’s happening with inflation is that the currency unit actually is losing its buying power. It’s becoming less and less valuable. So people stop wanting to hold the actual currency unit. And if they lend it if you have debts, assets that are debts where you’ve lent money to people it’s the same sort of thing is that you’re dominating your debt in the currency and the currency is losing value, and you’re going to get paid back less and less in buying power to get back exactly what you do in terms of that currency. But the buying power of that currency is reducing. And so in response, what you do is you increase your interest rates, so interest rates rise, but the way that the inflation process works is that it becomes more and more unprofitable to be lending money to people you end up losing more in the inflation, then you can get in interest. And at that stage, that’s the moment where capital markets basically stop and shut down. People don’t want to lend anymore. It’s very difficult to get any credit from the retail banks from you know credit lines on say for instance, your supply credits, those sorts of things, those get shut down at that moment.

Russell Lamberti:

Yeah. And again, I would just add that it’s because you’ve got this huge, real resource collapse, and you’ve got this huge real economy implosion. And so, businesses are not, you know, businesses and people are not good, real credit risks. You’ve got businesses failing, you’ve got hustles, losing their jobs. And this is another way just to link it back to something we said earlier, this is another way that the loan and spend economy disappears and becomes the Print and spend economy. This is part of this is all part of that process. So yeah, absolutely. It becomes unprofitable to lend. The credit markets become fairly chaotic. It becomes very difficult to price credit. And of course the other thing that happens is that the central banks and the governments will typically regulate a little bit like, like price controls in the shops. They will regulate the price of credit. And so they will try and squash interest rates and limit the amount of interest that can be charged on the loan. And of course, as a lender in hyperinflation, if you can only lend it, say, let’s say, they cap out the interest rates that you’re allowed to charge someone at a hundred percent, which is a very high interest rate. But if inflation is running at 3,000%

Russell Lamberti:

Then a hundred percent interest rate is simply not going to cover your inflation risk, let alone your credit risk. So yeah, you basically get this huge drying up of credit and it becomes a print and spend kind of cash based economy. And the only real lending that’s going to take place at that point is politically favored access to the banking system where the banks are compelled to lend to favored cronies or you’re going to real lending, that’ll take place in a different currency plane, in a gold plane or a foreign currency plane, dollar lending in a modern context, you might get some crypto lending, some decentralized finance, that kind of stuff. But yeah, lending in the hyperinflated currency, just dries up.

Stephan Livera:

Yeah. Very scary stuff. And I guess you’re thinking while all this is going on socially, you know, people aren’t able to buy the things they need. And another point you touch on in the book is that essentially people really needed to have a good network of people of friends, because they wouldn’t be able to just buy things they had to rely on having these networks and relationships, right?

Philip Haslam:

Yeah. What really is happening in a hyperinflation is that an economy is imploding on the back of a currency falling out of use. Okay. And, so your entire economic framework that’s based on trading, using money trading, using a banking system, creating, using a credit system that entire framework disappears. And people are forced to find alternative ways to engage in normal trade. And that means descending into a barter type economic system. And that means that you need to actually have connections into barter networks in your need to, you know, that would have access to fuel. How would you get food in an environment where you couldn’t get it in the stores? If you couldn’t get to work, what alternative work arrangements would you make? These are little simple questions that every person faces in their ordinary life, and they don’t realize that they’ve answered all those questions, using a system that if taken away, makes them very vulnerable. And so in Zimbabwe in the first hyperinflation people had to really rely very deeply on their relational networks and it became a very undercover black market barter network that was developing the supply for people’s foods and goods.

Russell Lamberti:

I think that’s also how you transitioned into this Gorge moment, number five, which is the flight to real value. So the is disintegrating. You want to get hold of something that holds its value longer than 10 minutes. I think we might’ve mentioned something in the book where people were even buying milk because milk lasts longer than the value of the currency. But having that flight to real values is this rush for getting hold of things that are going to help you survive, you know and that’s where this community network comes in. That’s where you can’t be an atomistic isolated individual sitting behind your laptop sipping a latte, you know in your 20th floor apartment in a city somewhere, you’ve actually got to be engaged in, building real resource networks.

Russell Lamberti:

And so that’s very much part and parcel of what happens in this flight to real value is a kind of almost community effect where people can come closer. It can also disintegrate into tremendous chaos and disorder in Zimbabwe. You certainly had a bit of both, but the predominant thing that Phil picked up, you know, from Zimbabwe was at the community kind of generally came closer together in, Weimar Germany. If you read Adam Ferguson’s When Money Dies there’s, there’s some horrendous stories of social disintegration, so it kind of can go either way. And it depends on the underlying, I suppose cohesiveness of that particular society.

Stephan Livera:

Yeah, really good point there. And that, When Money Dies as a phenomenal book also. And that’s actually the next Gorge moments, isn’t it? You see well, in that case, it was dollarization. So what drives that decision?

Philip Haslam:

Ultimately, no one wants to hold on to a currency that’s depreciating, and initially, you know, people stop using the currency and then, or continue using the currency because the government forces them to use the currency. And that now we’re talking about legal tender laws, government makes it illegal to to use other types of currencies. Places very restrictive laws around the banking system, and actually it forces people to, to make transactions through the banking system so they can monitor it. Okay. That’s the standard thing that happens in hyperinflation. But the time comes when the pressure of money printing is so substantial, it is so impoverishing on people that it doesn’t matter how aggressive or how suppressive the government rules are. People just won’t use the currency. Okay. And you know, it goes at multiple levels in the society.

Philip Haslam:

And ultimately it’s embraced by the government because government has to, is going to have to spend money to pay its staff. It’s going to do spend money to import fuel for its military and all those sorts of things. And a time comes when it’s just, you know, the hyperinflation pressure is just too much. And even the government begins to let go of its currency. And it’s the moment that the money finally collapses out of use that it becomes a relic. It becomes a historical thing that people don’t use it anymore for a currency. It’s now just a piece of paper that does not recognize anyway,

Russell Lamberti:

Becomes becomes a collector’s item. And that’s the kind of wheelbarrow money. That’s the money blowing around in the wind on the streets. And you can go pick up, you know, Zimbabwe dollar notes at a local, you know, markets that sells artifacts and antiques and things like that. And you can now pick up these notes, but yeah, that comes from that currency just totally crashing out of use. And it’s a combination of just, just unbearable hyperinflation. And I think probably also the political class finally getting to the point where even they can’t game the system anymore, because what you see through all hyperinflations is a favoured class uses these price distortions users, the distorted fixed exchange rates to do arbitrage trades where they essentially scoop up the last remaining bits of wealth in the economy.

Russell Lamberti:

And I think what you saw in Zimbabwe was that even they couldn’t carry on with the kind of activity anymore, it had all just kind of gone to virtually ground zero and it all just crashes out of use, and then they adopted the dollar, but also the rand, eventually Phil might know this a little bit better, but you had, you had about five or six currencies at one point circulating as, sort of legal tender. I think the Australian dollar was actually one of them. It was good, certainly the Rand the US dollar and probably the pound and a couple of others. So you had this kind of eclectic, monetary system, which could have, you know, graduated into something like a bit of a free market for money and you certainly had aspects of that going on in Zimbabwe, but the government is once again, enforced a kind of repression. And that’s a lot of what Phil’s work is trying to achieve is to use crypto technology to move to a place where wisdom by winds have you know, have better options in the face of this tremendous monetary oppression. And of course, Bitcoin and other cryptocurrencies for many people around the world offer that kind of opportunity. And I think it takes us into a very exciting new direction in the future because when Zimbabwe’s hyperinflation happened there wasn’t a good decentralized distributed online money, you know, and now we have those options. So that’s going to also, I think, change the complexion of what hyperinflation looks like in the future, which is, I suppose, a whole another topic.

Stephan Livera:

Of course. Yeah. As you were mentioning, essentially people will be struggling to get their money out of the country, or perhaps people who had, let’s say trusted the government system of thinking, Oh, just put it in cash and bonds, or in Australia, it’s called superannuation or in the US the 401k or whatever the retirement savings accounts were, the pension accounts. Basically those accounts just get destroyed, right? So what are some of the things that people do to try and get their value out?

Philip Haslam:

It’s a great question. You know, what you’re asking is what’s the solution? What can we, what can we invest that based in will retain its value or grow in value as a result of money printing? And it’s a very difficult question to answer because of several things. The first is that money printing is very, very difficult to put your finger on. Okay. It’s been a lot of money printing happening in the last several years, very difficult for people to actually articulate clearly where that money printing went and how has it actually affected them. Their lives have changed. The whole broader economy has changed significantly, but the people wouldn’t be able to say to you, the reason that the house prices have increased because of money printing or we reason because of socks have increased it because, because of money printing everywhere, you look, people are giving every other reason for prices rising, but not money printing.

Philip Haslam:

So it’s very difficult because people, you actually can’t see it that easily. You can see the effects of money printing that easily but that said for us. We believe that money alternatives are the future. We believe that when you have an economy that’s printing money on a large scale people will naturally move from a weak currency to a strong currency system or said another way would move from a money printing environment to a sound money environment. And that’s certainly what happened in Zimbabwe. You have people trying to take that money and putting it into foreign currencies that were relatively sound. You had people taking money and putting it into commodities that we saw specifically fuel and food. And then in other stuffs.

Stephan Livera:

Yeah. And I’d love to. Yeah go on.

Russell Lamberti:

I was just going to say Stephan quickly that know basically in a traditional portfolio cash and bonds in a hyperinflation go to zero. And so you want to be out of cash and bonds now, what does, where does that leave you? It leaves you with options to go into gold, to go into crypto, to go into foreign denominated assets and instruments, to the extent that you can get your money out of the country, you might have to pay a big tax penalty. And then interestingly equities in that country can sometimes perform very well provided you’re buying real value stocks and what you saw a lot of companies in Zimbabwe. They changed their traditional business models and some of them would just end up buying physical things to hold on their balance sheet like just buy tons and tons of bricks or raw materials, just, you know, even if they were like a service sector business just to have something real on their balance sheet to, kind of store and hold value.

Russell Lamberti:

And so it’s all about the flight to real value in a time of hyperinflation. So getting away from the domestic cash and bond market now, that’s where a lot of pension money actually does sit. And during, during crises like these, you get a lot of governments that try and force the pension funds to hold cash and bonds, particularly bonds, because the government’s in a debt spiral. And you may, you know, people may have to consider what, you know, the implications of taking the big tax penalties to get out of those pensions before retirement age. You know, if you see your country going down this very, very perilous route these are the sorts of decisions, hard decisions that, have to be considered.

Stephan Livera:

I mean, I was literally about to ask you, because you touched on this idea of what companies do, because it’s not just individuals, but companies have to look for a way to navigate this regulatory morass and try to find perhaps assets in a jurisdiction outside the country, or, you know, or if they’re going to go full MicroStrategy, Michael Saylor style and just buy a bunch of Bitcoins I guess they have to look for some of these alternatives.

Russell Lamberti:

Yeah, very, very much so. And what you get is you get a range of strategies that get adopted for most companies in an economy in a full blown hyperinflation that they’re just going to go out of business, they’re going to go bankrupt. They’re going to lose their assets. They’re gonna lose their income streams. They’re gonna lose their markets. For the ones that are able to respond really smartly and early, they’re going to off shore some of their operations, they’re going to change their business models. They’re going to do different things with their balance sheets. They’re going to try and probably take up local currency debts so that they are essentially going short, you know, the currency, if they can actually get hold of that debt early on in the process. There’s, you know, so there’s various ways and means that people will try and navigate this.

Russell Lamberti:

And it’s you know, you gotta be, you know from an asset allocation perspective and from the perspective of trying to figure out what’s a good investment, you know, aside from the good old gold and Bitcoin and foreign denominated assets, to the extent that you still need to invest something in the domestic economy, you gotta be honing in very keenly on companies that are exploiting, you know, real value opportunities amidst the crisis. So very, very tricky conditions to invest in.

Stephan Livera:

Yeah, really interesting comments there also, I’d love to talk a little bit about some of the things that government will do to try to keep you there. So for example, financial repression and transaction control, can you tell us a little bit about what they do on that front?

Philip Haslam:

Yeah. I think Russ touched on a price controls a little earlier, but the idea is there’s really two focus points. You know, the one is price controls, prices are rising. Interest rates are rising. You know, the government’s response is to try and push those prices down or to keep them limited in some way. The next is that what the government doesn’t want is for people to be transacting in alternative currencies. You know, if you think about currency, what currency is its a network of people who are transacting in that currency? The currency has value to the extent that people are transacting in it. And as people begin to migrate away from the currency, that’s being printed, that’s inflnating way the response of governments typically is to increase the control on the population to keep that network effect, to keep people transacting in the token, in the currency, and to keep prices low.

Philip Haslam:

And so that increased control over transactions begins to look like forcing people to use a banking system that can record all transactions that can see what prices you’re using. You know, I heard in Venezuela in a hyperinflation in Venezuela recently, what they were trying to do and they failed dismally at it, but what they were trying to do is to implement a system where you had to use your fingerprints, they have fingerprint readers in the stores when you were purchasing goods and services. And and then they would use some for technology to be able to recognize what price you were paying and how many goods you were paying. You know, the other thing is that because the shortages in the stores, the response is to try and limit the amount of some people can buy off some goods.

Philip Haslam:

And so you can allocate it to other people who are coming in. So for instance bread, the shortages of bread, people need bread queues. And so you, the government says, okay, well, well, we have limitations on the amount of bread people can buy. And so it’s not, not only price controls, but it’s also quantity controls. And another example would be, you know, people trying to withdraw cash at the ATM the government would institute withdrawal limits and those withdrawal limits would get lower and lower relative to the amount of relative to the purchasing power that people had. And so it forced people to use the banking system. And what that did was it actually meant that cash in hand became more valuable than cash in the banking system to try and pass on the cost of money printing what the banks would also do is they would delay the transactions, any transactions that people would make.

Philip Haslam:

So if you, for instance if you say, send some money to someone in another bank account that would take a day and or a day or two or however long, but in that two day period, the inflation cost would’ve eroded the value of that money. And it would have meant that the government could print more and more money. Those are just some of the things that they would do typically, but the basic concept is when a government prints money, they’ve got to force people to use that money. And so money printing results in a centralization of power, both buying power and the centralization of control power to force people to give the government services in exchange for that money.

Russell Lamberti:

And Phil, isn’t it interesting, you know, you’ve set that out so well, and isn’t it interesting how in the last 12 years, since we’ve had the QEs and the real big push from the major central banks to create currency how we’ve also had this ramping up in financial repression and transaction control and banking system oversight by the central planners, you know, we’ve had the pretty much blowing up of Swiss banking secrecy over the last decade or so. We’ve got the potential for bail-ins in European banks, the potential for negative interest rates in a cashless system where you can essentially force people to keep funds on deposit in the banks. And then institute let’s say a once off minus 10% interest rate to act as an effective wealth tax. You’ve got increasing, it seems rather than decreasing global financial mobility.

Russell Lamberti:

Ironically at a time when you’ve got, increasing people mobility across the globe, we seem to have a diminution, a diminishing and in sort of financial mobility. And that’s precisely why you’re getting this explosion in FinTech, right? This explosion in crypto technology, this explosion in efforts to disintermediate this increasingly repressive financial system to which is being, which is being instituted to mitigate the obvious and emergent negative effects of fiat currency printing. And so it’s a dark time in many ways financially, but it’s also in many ways, a very exciting time. And obviously Stephan, you’re all over this with your podcast. And I think it’s just a very, very interesting time to kind of be studying and investing in alternatives to this clearly very, very corrupt system that we have.

Stephan Livera:

Yeah, really great comments there around the kinds of financial repression that governments will enact on their people, and also the kinds of surveillance that is required for them to conduct that. So we are seeing this in terms of additional surveillance, as you mentioned on in terms of central bank surveillance over banks, and then KYC and AML, and all these kinds of other way forms of surveillance that are pushed out onto individuals. So I guess my next question really is just about, do you see any differences that are coming this time around? Is it going to be more of a digital form of surveillance that kind of governments try to use to try to keep the slaves on the reservation, if you will?

Philip Haslam:

Okay. So differences, you know, the core qualitative characteristics of money printing are the same. Okay. And that’s why we’re seeing this increased government control over the money and banking system. And it was the same in Zimbabwe, but of course the more the government can control people and watch their transactions, the more, the stronger the government the higher, the ability of the government to print money and push on the inflation cost on the people, or said another way, the stronger the printing of the government, impoverished people through money printing. Yeah. Ultimately the reason you want monetary freedom or the freedom to make transactions is that transactions trade is the very basis for your economic activity. And when you trade with other people, you can accumulate goods and services and you can supply for yourself, the things that you need, and when the government restricts your ability to trade and make transactions and buy the things that you need, you actually become significantly poorer.

Philip Haslam:

And so our concern is that as we see the the ability for what we call total control around the world, for governments to be able to control people very uniquely and specifically in the area of their transactions it’s a concern that we could see money printing happening at a much higher rate. You know, there’s this whole philosophy called modern monetary theory. And the idea is basically that you control everyone to use a digital money system, to be able to print as much money as you need, and you can inject it wherever you want in the economy but from our perspective that results in people in that network getting impoverished. And to us, it’s a very big concern. And to us, it’s an identical replica, what they tried to do in Zimbabwe, but they will be much more successful than the government was in Zimbabwe.

Russell Lamberti:

Stephan, Peter Thiel in his foreword to the great book, The Sovereign Individual says, he juxtaposes AI and cryptography. And he says, AI is the technology of centralization and cryptography is the technology of decentralization. And I think that’s a great way it’s perhaps a simplistic way but certainly a good way to view this kind of balance of forces that we have now globally. Yes the rise of information technology, big data surveillance technology, and so on has enabled in many respects the state to be hugely controlling of people, populations financial transactions, and so on, but you’ve got this parallel increase using the same sort of base technology. That’s actually figuring out ways to digitally decentralize, to create digital boundaries, to create digital security to create in effect, digital scarcity. So we’ve got this rush towards digital the proliferation of let’s call it electronic money by governments where you can just press keys on a computer and generate $10 trillion in three seconds.

Russell Lamberti:

But at the same time, you’ve got this amazing digital scarcity revolution that’s taking place. And so there’s, there’s, in this respect, there’s differences to what we saw in Zimbabwe because the technology just hadn’t hadn’t quite caught up yet. And so what you would see in a modern day Zimbabwe in a repeat of the Zimbabwe hyperinflation, but say in the 2020’s, which in many ways, Zimbabwe is experiencing, you’ve got this different mix now of surveillance technology, but also the rise of digital alternatives. That’s really exciting. And I think it may, you know, the advent of cryptocurrency and the ability to have digital scarcity may ultimately change the complexion of traditional hyperinflations going forward. It’s certainly going to be a check and an accountability on governments just doing what they want. Governments of course, will continue to try and leverage the surveillance technology to leverage the repressive nature of what they do. But this, technological counter revolution, if you like this backlash is really exciting and going to create, I think one of the most fascinating, monetary landscapes that we’ve ever seen around it.

Stephan Livera:

Definitely.

Philip Haslam:

Yeah. You know, it’s a, it’s a really interesting time that we live in, you know like we were getting the rise of, the entitlement state across the world. You know, even if you look at the United Nations they introducing academic papers to talk to the idea of a universal basic income for everyone in the world funded by money printing. Okay. So on one side you get this sort of move happening in all the, or most countries that are on this idea of money printing. On the other side, you’ve got this entire move of people towards sound money solutions, and, you know, exploring what it looks like digitally, you know we’re involved with people who are trying to establish a decentralized national currency system. And so you’ve got this innovation happening on the other side you’ve got a whole lot of money printing its happening across the world. It’s a really interesting time to be.

Stephan Livera:

Yeah, for sure. And I’m also curious as well, now this is a theme that came through from When Money Dies. And I can’t recall if you touched on this in your book as well, but it probably did come up at some points. Is this idea of, well, I guess two parts is, was there any kind of government propaganda to try to say there was like a social requirement for you to keep your money in the local fiat money? And then I guess the other part of that kind of related, was there any sort of resentment of people who did save their value by people who actually got their value out of the country or into something else? Was there like a resentment there from the people who lost value?

Philip Haslam:

I think everyone began to realize that the currency was losing value. No one wanted to hold the currency. And and so the answer to your first question is everyone tried to get foreign currency. Everyone did. And it got to the space where the government made it illegal that if you were caught holding any US dollars or any foreign currency, they’d put you in jail, and then they made it illegal. If you would caught recording books, your books of account in denominated, in US dollars, they would put you in jail. They were trying so hard to stop people from using foreign currencies. But not that I, the answer to your second question, I didn’t interview anyone that was resentful about anyone taking money out of the country. You know, obviously the government tried to make it a nationalist issue, but you know, not specifically anyone who took money out of the country and put it into foreign bank bank account. There wasn’t that sort of antagonism, not in Zimbabwe.

Russell Lamberti:

The one thing we talk about in the book, Stephan, is, is we use this term monetary obfuscation, which is really just a fancy way of saying outright propaganda. And I think what you saw in Zimbabwe whether it was nationalistic propaganda, whether it was obfuscating, the nature of what was actually going on, the cause of, you know, and obfuscating the cause of the inflation, you know, Oh, it’s shortages, Oh, it’s due to you know, profiteering you know, retailing or what have you, you get this tremendous ramping up in propaganda. And again, I find this fascinating parallel to what we’re seeing in the West. And a lot of the major economies just as we go more and more into this kind of malaise of money printing, of financial repression of zero interest rates, negative interest rates, the suppression of yield curves, the distortion of credit markets and the zombiefurcation of the banking system, you know, all the stuff that is entailed in this modern manage system it comes with an immense amount of propaganda.

Russell Lamberti:

The interesting one I’ve been seeing of late is inflation propaganda. I think it was the bank of international settlements, or I think it was the world bank that recently had a kind of very proper propagandistic stick a short little thing on Twitter about inflation and how we need, you know, we need inflation and it’s good to have some inflation, but not too much, but we mustn’t have deflation cause it destroys the economy. And then the bank of Jamaica I think Stephan, I think you saw that on Twitter as well. They’ve produced this reggae song kind of about the benefits of low and stable inflation, you know and how deep and how deflation and an economy can’t grow in deflation, which we know is demonstrably false because the economies grew rapidly in the 1800’s under a deflationary regime of sound money. So but the point is, and this is the lesson. Again, drawing a lesson from Zimbabwe is a tremendous ramping up in propaganda in doublespeak. Phil, took great inspiration from George Orwell’s writings from 1984, as he was analyzing Zimbabwe because you just get this incredible ramping up of propaganda, monetary propaganda, financial propaganda and it’s all in service of trying to keep the population distracted from what’s really going on in the underlying financial system.

Philip Haslam:

So interesting is that the the head of the reserve bank at the time of the money printing wrote a book afterwards, trying to justify the reasons for printing the money. And he maintained as did the entire political system at the time, maintained that the reason for the hyperinflation was squarely in the corner of of foreign powers. It was foreign powers that caused the hyperinflation. And we so in Venezuela they say the exact same thing hyperinflation in Venezuela is caused by United States, by the United Nations, IMF, etcetera. It’s always blaming foreign powers but never taking responsibility for their own money printing.

Stephan Livera:

Well, I think there’s a lot of lessons in there for listeners in terms of what might happen during an inflationary episode, and some of the things that typically occur as well, and, you know, some of the controls and the things that governments will try to do. So I suppose it’s probably a good spot to end it, but obviously before we let you go, where can listeners find the book and where can they find you online?

Philip Haslam:

You can get a copy of the book on Amazon. We have both a Print version and an E-version. The book is called when money destroys nations. And you can search for there and you can find us on Twitter and you can see us on our website whenmoneydestroys.com.

Russell Lamberti:

Yeah. Thanks, Stephan. It’s been really great chatting to you. I’m on Twitter @RussLamberti we’re tweeting excerpts from the book. I think the Twitter handle is @WMDNbook when Money destroys nations book. And so you can go check that out on Twitter. We just tweet some pithy kind of excerpts from the book and yeah, you can find me on Twitter. And Phil’s doing some interesting stuff as well. You can, you can follow him on Twitter and he’s got some great little insights as well. It’s been really fun talking to you, Stephan. We really appreciate that.

Stephan Livera:

Well, thank you.

Philip Haslam:

Thanks so much, Stephan.