What Syria Teaches Us About Hyperinflation

Syria is a humanitarian disaster, of course, but it's an economic catastrophe too. The latter doesn't get much attention for obvious reasons, but 290 percent inflation certainly qualifies. It turns out you can't have much of an economy when your country is a war zone, and the regime is attacking civilians.

But functioning economy or not, the government still has to pay its bills. So what does it do when there's nothing to run or tax? Easy: It prints what it needs. That's what the pariah Assad regime has done to cover the difference between what it has to pay, and what its few remaining patrons have paid it. The predictable result of all this new money chasing fewer goods has been massive inflation.

Now, the regime has tried to hide just how massive inflation actually is with its "official" numbers, but Steve Hanke, a professor at Johns Hopkins, has estimated what it really is based off black market exchange rates. As you can see in the chart below, the ongoing civil war, foreign sanctions, and the threat of bombing have sent Syria's inflation rate well into the triple digits -- the latest reading, which isn't shown, has it at 292 percent, to be exact.

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