Yes, it’s annoying that the gas pump numbers spin faster than a Vegas roulette wheel. Of course we’d rather not spend the bulk of our vacation money on airfare. And you’re not imagining that now even the lowest tip choice in many restaurant systems has magically jumped from 15% to 18%—and the highest “option” to 25%.
Could this get any worse? Is this some kind of hyperinflation? Don’t count on it. This doesn’t even resemble hyperinflation. It’s like that classic scene from the Crocodile Dundee movie. “That’s not inflation. THIS is inflation!” By the way, the definition of hyperinflation is “rapid, excessive, and out-of-control general price increases in an economy.”1
Let’s go back to Brazil in the late-80s to experience what hyperinflation really looks and feels like. By the way, it sounded like the non-stop clicking of grocery store pricing guns. Remember those things?
First, inflation rates were consistently in the double digits. Sounds high, but it’s not your fault if you’re not doing the math correctly. You see, those double digits are for the month. In March of 1990, the last month before the beast of Brazilian hyperinflation was finally tamed, the inflation rate for those 31 days hit a whopping 81.3%.2
Inflation at double digits is more than irritating, it’s disorienting. If you bought a pound of coffee two weeks ago, you wouldn’t be able to tell from today’s price if it was a good deal or an awful one. To cope, people would peg everything to the dollar. In fact, news anchors would give out the day’s exchange rate for the dollar in two numbers: the official and the black market rate.
So, back to today’s somewhat inflationary world. According to Kiplinger, the past 12 months ending in April saw inflation of 8.3% with a projection of 6.3% for all of 2022.3 Not what we’re used to, but definitely not what Brazilians had to adapt to in the late ’80s, either. Hope this helps brighten your day just a little the next time you pull up to another pump.
1 Source: https://www.investopedia.com/terms/h/hyperinflation.asp (Note: Another test for hyperinflation noted in this source: Inflation isn’t generally considered to be hyperinflation until it exceeds 50% a month.)
2 Source: https://en.wikipedia.org/wiki/Hyperinflation_in_Brazil#cite_note-11
3 Source: https://www.kiplinger.com/economic-forecasts/inflation
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