One of the heaviest words that you may possibly hear in your life is HYPERINFLATION. This word refers to a very simple breath that bears with an overwhelming amount of historical and trauma and significance.
The fall of the first-ever American currency distributed by the Continental Congress as well the cause of various government downfalls, hyperinflation was actually like something bitcoin. What’s more, it is sound money philosophies that were situated against from the start with a bitcoin limit of 21 million.
As the coronavirus world places itself to an odd potential slump scenario because of the collapse of categories of demands because of lockdowns and supply shocks caused by this very contagious disease, the fiat currencies of a lot of government are also collapsing in value as well. Unfortunately, this leaves the vast majority of their people desperate, stranded, and hungry.
This will then result in inflation. With this, the government will have the ability to maintain a more stable economy and pay its debts. The moment that inflation will hit the very critical stage and keep on accelerating, it’s called hyperinflation.
The government in Lebanon has failed to pay on its debt and warned that its considerable amount of public foreign arrears has lowered foreign exchange reserves to life-threatening stages.
On the other hand, public spending cuts were assured by Prime Minister Hassan Diab, a technocrat partly supported by Hezbollah accompanied by a sobering projection that 40 percent of the population of Lebanon may drop below the poverty level.
This, however, paired with the problems caused by the coronavirus pandemic and following lockdown has made a life-threatening amount of hyperinflation. With that, Lebanese pounds have defeated to new lows also almost splitting in value in just a few weeks.
You will be surprised to know that the prices of consumer goods have increased by 50 percent. Also, savers have been locked out of their deposits since October when unrest first emerged.
Due to hyperinflation, protests have been conducted in many cities in Lebanon. Some protestors saying either dying from hunger or dying from the disease (COVID-19).
The military in Lebanon has fired on a lot of protestors with live bullets and unfortunately, a 26-year old named Fawwaz Fouad al-Seman expired. But regardless of this darkness, the protestors conducted a funeral.
Where cryptocurrency, as well as Bitcoin, plays a significant part is in the theory behind what are the available solutions and what should be done.
Much like other countries before it, Lebanon is going to the IMF for possible solutions in order to cut public spending as well as come to a defrayal with the debt owners.
Cryptocurrencies and Bitcoin may be completely able to help at gauge yet. But at the right time, corroding trust in the present financial systems will make sure that this discussion will never stop not only in Lebanon but in other places as well.