October 02, 2018 Tuesday

Bedtime Story 

Uncontrollable Spiraling Hyperinflation in early Soviet Russia

Tonight we shall continue our study of the Soviet ruble during the early Soviet days immediately after the collapse of the Russian Empire the October Revolution.

The currency of comparison is British Pounds as then it was the British Empire that had the near-complete political hegemony in spite of the existence of other empires those days.

Date                              Value of British pounds in rubles

1922   1^st quarter                   1,650,000

1922   2^nd quarter                   14,900,000

1922   3^rd quarter                   18,650,000

1922    4^th quarter                  71,730,000

1923    1^st quarter                   192,080,000

1923    2^nd quarter                  385,000,000

1923    3r quarter                   866,000,000

1923    4^th quarter                 5,040,000,000

The last amount is an unbelievable staggering 10-digit figure of more than 5 trillion!

The Soviet ruble, as you can see from these figures, was plummeting precipitously week after week so much so that it even made the calculation of wages to be paid to the Soviet workers a herculean task.

Just to understand the cause of this maddening hyperinflation, let me show you the chart that depicts the amount of rubles issued each year by the People’s Commissariat for Finance (or Narodnyi Kommisariat Fiansov or “Narkomfin”), one of the most important government offices of the Soviet Union.   

The main task of this most important government agency was confiscation of property (to support government expenses or operations), robbery and requisition, printing and creating money and taxation (please note the order in which its activities have been listed).

This arm of the government Narkomfin not only excelled in seizing private properties but also excelled in printing paper currencies as this table below will show.

Year     Billions of Rubles Issued         Percentage Increase

1916                3.5

1917                16.4                                180.3 %

1918                33.5                                119.2 %

1919                164.2                              302.5 %

1920                943.6                              419.3 %

1921                16,375.3                          1402 %

1922                1,976,900                        11,268.2 %

1923                176,505,500                    8,849.6 %

The mismanagement of the Soviet economy by the Bolsheviks was so staggering that I am left speechless!

Stay tuned to the voice of an average story storytelling chimpanzee or login at http://panarrans.blogspot.com

                              

Good night Mon Ami and my fellow cousin ape.

                           

  

                

             

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Another great educator and a teacher that I am aware of is Professor Subhashish Chattopadhyay in Bangalore, India.

While I narrate stories, Professor Subhashish an electronic engineer and a former professor at BARC, does and teaches real mathematics and physics.

He started the participation of Indian students at the International Physics Olympiad.

Do visit him here:

http://skmclasses.weebly.com/

All his books can be downloaded for free through this link:

https://zookeepersblog.wordpress.com/science-tuition-chemistry-physics-mathematics-for-iit-jee-aieee-std-11-12-pu-isc-cbse/

For edutainment and English education of your children, I recommend this large collection of Halloween Songs for Kids:

https://www.youtube.com/channel/UCd14DRdYKj454znayUIfcAg