Hold On, Tovarich, Here Comes Hyperinflation
After a spectacular devaluation and default, what's a country to
do? The answer from Russia's new central banker, Viktor
Geraschenko, is to print money, and lots of it. Printing
presses are said to have been rolling for days, cranking out
billions of nearly worthless rubles. Just how many have been
printed is a state secret, but Boris Nemtsov, the 38-year-old
(recently retired) deputy prime minister, puts the figure at
"between 9 billion and 12 billion rubles" (some $600 million to
$800 million). Officially, the central bank only admits to
printing "less than 1 billion" rubles. But a former bank
official fears that as many as 50 billion rubles will be minted
in a vain attempt to reflate the economy. A far likelier result
is hyperinflation. Inflation has already rocketed to 67 percent since
the Aug. 17 devaluation, and is forecast to hit 290 percent by year's
end.