ILLUSTRATES romolo
QUESTION Rafael Fontenelle, Belo Horizonte, MG
Chaotic! Between the 80’s and 90’s the prices of Brazilian products and services rose absurdly. To live at that time, in addition to spending all of their salary quickly, people created habits that last until today, such as shopping for the month. It was at that time that the dragon was enshrined as a symbol of inflation, as it was a huge monster, breathing fire and representing imminent danger.
1) JUMPING
At the first announcement of a rise in prices, everyone feared that everything could go up, so they rushed out to buy. This, of course, caused gigantic queues in several establishments, from markets to gas stations.
2) OH, HOW CRAZY!
Newspapers at the time recorded “The prices went crazy”. According to the bookBrazilian Sagaby Miriam Leitão, a toy stove could cost morethan a real stove. You could buy a linen blazer or a fridge for the same amount. Or choose between a zero car or 42 bra and panty sets!
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3) THE DROPPER
The rush to buy everything possible had some immediate effects: the first was the fast disappearing of some products from the shelves. Rationed sales were also frequent among merchants: to be able to serve everyone, each one could only take one bottle of milk, for example. Prices were frozen by government determination and supermarkets hid some items to force defrosting.
4) PASS THE RULER
There was a lot of insecurity: it was not known whether the money would be devalued as the days went by. For this reason, many people, especially the poorest, as soon as they received the salary of the month, they ran to supermarkets to buy everything they could. They filled their carts and emptied their pockets in a single day.
5) HAS, BUT IT’S OVER
Supermarkets marked up the prices of products daily. It was common, when picking something up from the shelf, to notice that there were labels and price markup labels, one on top of the other – pointing to the oscillation of the day. For a long time this task was done “by hand”, since the bar code as we know it today was only adopted in Brazil in 1983.
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6) PUT IT IN THE DISPENSE
Making the purchase of the month is a habit created by exacerbated inflation. As people feared not being able to buy everything they needed if they left it for the following day or week, they food stocks at home. There were those who bought, for example, 20 cans of oil at once (enough to supply a family of four for ten months!) Between November 1989 and January 1990, if someone had stocked food, he would have a 43% greater equity than if you had invested in gold!
7) FOR MOTION AND FOR MOCINHA
If today people are seduced by promotions and buy things they don’t need, imagine in times of economic chaos! From brooms to freezers, whatever was advertised as an offer was bought, as this type of opportunity could not be missed.According to the book by Miriam Leitão, a boy asked his mother if everyone was becoming witches when he saw people leaving the market with brooms .
8) SOME LOSE, OTHERS WIN
In every crisis, someone always profits. So it was with hyperinflation. Doing math was so necessary that sales of calculators from the Brazilian company Dismac doubled in just one year! Banks also took advantage of hyperinflation, as they had economic incentives to open branches in towns with few inhabitants. Between 1985 and 1994, 1,078 new bank branches were opened!
How does inflation arise?
Inflation is nothing more than the continuous increase in prices of goods, products and services in a given region during a period. In it, at the same time that products become more expensive, the purchasing power of the national currency decreases. It can arise when the government prints more money than it has in goods (a lot of money available for few products), causing an economic imbalance, or because, out of insecurity, traders adjust prices when they see others increase. The lack of harmony between supply and demand, that is, a lot of money available and few products or services for sale, can also cause inflation.
SOURCES Books Brazilian Sagaby Miriam Leitão, and Macroeconomics Applied to the Analysis of the Brazilian Economy, by Carlos José Caetano Bacha; IBGE and Central Bank and websites G1 It is Portal Brasil
CONSULTANCY Luis Carlos Berbel, economist trained and post-graduated at USP, Pedro Linhares Rossi, professor at the Institute of Economics at Unicamp, Bárbara Caballero de Andrade, master in economics at PUC-RJ, and press advisor for the Associação Brasileira de Automação