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Friday, 13 December 2013

Venezuela is NOT in hyperinflation according to lunatic fringe economist Prof. Steve Hanke


Venezuela is NOT in hyperinflation according to lunatic fringe economist Prof. Steve Hanke: see 

Venezuela’s Playbook: The Communist Manifesto

Millions of accountants and economists world wide follow the International Accounting Standard Board´s definition of 100% cumulative inflation over three years. That is 26% annual inflation for three years in a row. 

Venezuela has thus been officially in hyperinflation since November 2009 and has officially been implementing IAS 29 Financial Reporting in Hyperinflationary Economies for that year end and all following financial periods till today. Steve Hanke simply ignores that.

Venezuela is currently at about 5% monthly inflation or 54% official annual inflation. Hanke puts Venezuela´s implied annual inflation currently at 297% - still far away from his 13 000% annual inflation threshold before hyperinflation takes hold in Venezuela - according to the lunatic fringe crowd.

Lunatic fringe Steve Hanke is waiting for Venezuela to reach 50% monthly inflation, i.e., 13 000 percent annual inflation before he will agree that Venezuela is in hyperinflation. 

Only he, his students (obviously) and a handful other lunatic fringe economists think like that.

The lunatic fringe Professor derides Maduro´s economic policies while Hanke himself refuses to acknowledge the generally accepted, globally implemented definition of hyperinflation.

I would not recommend Hanke for any advice regarding hyperinflation. He also continues to peddle his obsolete and extremely costly Dollarization and Currency Board solutions (which also removes a country´s independent monetary policy capability) to fight hyperinflation. 

Daily Indexing (Capital Maintenance in Units of Constant Purchasing Power in terms of a Daily CPI) is free as well as authorized in International Financial Reporting Standards and US GAAP. 

Nicolaas Smith Copyright (c) 2005-2013 Nicolaas J Smith. All rights reserved. No reproduction without permission.