Back in 2008, some 80% of people living in Zimbabwe replied "yes" when asked if there had been times in the last twelve months when "you did not have enough money to buy food that you or your family needed."
That was just one of the deeply unpleasant consequences of Robert Mugabe's shockingly awful economic policies and the hyperinflationary meltdown they resulted in.
As some of the world's biggest countries continue to print money, the question is could we be heading the same way?
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Did we learn anything from Zimbabwe?
Things are better now in Zimbabwe. In 2009, the local currency (by then denominated in trillions) was abolished, the US dollar took over as the most used currency, and by 2011, a miserable but improved number of people (39%) said they were going hungry.
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But even as Zimbabwe's economy slowly pulls itself together, a good many people in the West think we have been too slow to learn the lessons it should have been teaching. I have several worthless Zimbabwean bank notes. I also have several left over from the miseries of the Weimar Republic.
They've all been generously given to me by people who think that the current rounds of money printing in the US, the UK, Japan and Europe will eventually lead to very high (and then to hyper-) inflation (hyperinflation being officially defined as price rises of 50% plus a month).
Maybe we have nothing to fear
James Montier of GMO a strategist we have a lot of time for thinks these people are nuts. Why? Because a huge rise in the money supply is not enough to cause hyperinflation.
The basic theory of monetary hyperinflation suggests that it tends to start with a government with a deficit. That government then prints money to keep its debts under control (just like ours is today). Prices rise. People lose confidence in money (its important to bear in mind that money is simply a function of trust) and spend it as soon as they get it. The velocity of money rises. Prices rise. The velocity of money rises again. And so on and so on.
But as far as Montier is concerned (if I understand him correctly), a rising supply of money, while a necessary condition forhyperinflation is not in itself enough. For that you need other things a nasty supply shock (Zimbabwe had this with the collapse of its agricultural sector), a high level of debt in a foreign currency, or a transmission mechanism that allows wages to rise faster than prices indexation of wages to prices perhaps.
The point is that hyperinflation isn't just a monetary phenomenon it needs social and economic stresses to really get it going. To think otherwise, says Montier, is "bordering on the simple minded."
I don't disagree with this. As I said here last year, stable countries with liberal and diverse political institutions should be capable of preventing monetary crises.
The West is not as stable as you think
But the problem is that a good many of the countries we think of as beingstable are nothing of the sort or well on the way to becoming nothing of the sort. There have been 57 properly documented hyperinflations since 1795, and the very fact that they can be officially proven rather suggests that they started in countries that were not far from having solid institutions filled with respectable number crunchers themselves (we have, of course, no idea how many undocumented hyperinflations there have been).
Take Europe. You can read my interview with the brilliant Bernard Connolly here, but his views on the extremism and social unrest that will bring Europe down are absolutely relevant. You might also read Matthew Lynn here.
As he points out, opposition to the euro "has moved into the mainstream in Italy" and if Silvio Berlusconi ends up the driving force behind the next government, it is very hard to see an end game that doesn't come with chaos.
Even Montier notes that if you were to worry about hyperinflation (which he doesn't), you might want to note that this is just the sort of thing that causes it: "the collapse of the Austro-Hungarian Empire, Yugoslavia, and the Soviet Union all led to the emergence of hyperinflation!"
The Bank of England has given up
It is also worth noting that while hyperinflation might not be top of our immediate forecast list for the UK, high inflation is. The Bank of England is no longer even bothering to pretend that it is going to have a go at hitting its inflation target over the next few years and that's even before Mark Carney (Albert Edwards suggests we call him 'Chopper Carney') has found a house to rent in London.
So, the pound is falling, inflation is rising (and will rise further given the hit the pound has taken in the last week) and no one is going to do anything about it.
Why? Because, despite the fact that falling real wages (prices are going up faster than earnings) and negative real interest rates (you get less in interest on your deposit account than you lose to inflation) are surely hitting consumption, and despite the fact that high inflation would destroy the gilt market (see this week's magazine for more on this), "attempting to bring inflation back to target sooner would risk derailing the economy."
So much for the idea that the Bank's principle objective is to maintain price stability. Expect inflation we are all going to see plenty more of it.
For more on the recovery of Zimbabwe today, this piece by Jon Swain at Montrose is interesting.
I tweeted the statistic about hunger in Zimbabwe a few days ago and someone actually replied asking me how that number compares to the UK. I replied, as I think you would have, saying that it is silly (simple-minded even) to think there is any comparison between the diet of anyone living in a Western welfare state and the diet of anyone living in Zimbabwe during a period of hyperinflation and 80% unemployment. There just isn't. You can follow me on Twitter: @merrynsw.
This article is taken from the free investment email Money Morning. Sign up to Money Morning here .
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