Another government currency - the Naira - is in hyperinflation, which has happened to many other fiat currencies through history.
We're all aware of Zimbabwe's hyperinflation in 2008, Argentina since 2018, Weimar Germany in the 1920s, Venezuela since 2017, and so on. In Zimbabwe, people were spending their days picking through the dirt for crumbs of gold, to pay for bread. Hyperinflation destroys economies, individuals, and societies. It is the end result of all fiat currencies in history, and it is even beginning to happen here in Canada, and in the USA. Fiat currencies are in a race to the bottom. That means real assets appear to be "going up in price"... relative to the failing currencies. For example, here is the price of gold since year 2000, price in Nigeria's Naira:
That is a classic example of hyperinflation, also known as a "hockey stick chart".
Actually, it looks more like a Stealth Bomber than a hockey stick...
Whatever you call the pattern it makes, hyperinflation causes misery for the people using that currency.
My friend @olusolaemmanuel from Nigeria commented today: "The hardship is just too much. The price of everything is increasing everyday. What you get as price today may no longer be the same in less than an hour or till the following day. People are groaning in pain due to the hardship."
Unfortunately, it usually continues to get even worse, as the currency spirals out of control to complete collapse. The government (and/or central bank) issues more of the currency, supposedly to help the people, but it causes further acceleration of the collapse. Eventually it becomes obvious a whole new fiat currency, or even banking system, will be required to bring stability. Of course, the problem is bound to happen again, because fiat currencies are backed by nothing except the demands of the issuing government.
Those holding gold (or silver etc) maintain their purchasing power in these situations. Those holding the fiat currency lose everything.
You've heard the expression "gold is a hedge against inflation". This is what it means.
DRutter
