INDONESIA: Drastic Medicine

President Sukarno apparently believes that a government that prints money can also take it away. Last week, faced by skyrocketing inflation that had already run the dollar value of the rupiah to 155 on the black market (against the official rate of 11.4 rupiahs to the dollar), Sukarno demanded action from his Finance Ministry.

He got it. Overnight all 1,000-and 500-rupiah notes were arbitrarily cut to one-tenth of their value (though smaller bills were not changed); 90% of every bank deposit over 25,000 rupiahs was frozen, so that the money could be seized for obligatory long-term loans to the government,...

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