My idea of an economic nightmare isn’t a stock market crash, but a currency crisis which destroys the value of an entire country’s wealth.
If this story line sounds like the stuff of Hollywood film or a black & white newsreel from the 1920s — think again. This horrific scenario is unfolding this week in Belarus, where the government was forced to devalue the currency by 36% on Monday as confidence in the nation’s economy evaporated. Previously fixed at 3,155 Belarussian rubles to the dollar, the Belarus National Bank dropped exchange rate to 4,930. The black market rate is quoted even higher, at 6,500 Belarussian rubles to the dollar, and climbing daily.
Terms like “inflation” or “devaluation” can seem irrelevant to Americans busy with work and family, but watching those seemingly esoteric concepts play out in Belarus should serve as a terrifying warning — as panicked citizens empty their bank accounts to buy air conditioners, sugar, stereo equipment, anything of actual value instead of the increasingly worthless pieces of paper in which they’ve put their life savings.