We will now look at different periods of redenomination in Latin American countries.

On the slide, on the left, are the years of redenomination, the name of the new currency, and the exchange rate with the old currency. Taking the example of Argentina, the peso moneda nacional was converted at a rate of 25 to 1 from the previous currency, the peso reàl. In this context, we will examine the evolution of the Argentine currency over time. Additionally, we will indicate the initial and final denominations of banknotes for each period.

On the right side of the slide, a graph of inflation is displayed. The red arrows represent years of hyperinflation, as defined by Cagan's criterion, which is an inflation rate of 50% per month. This criterion can sometimes lead to ambiguous interpretations, as years with high inflation rates may not meet the strict definition of hyperinflation. It is worth noting that redenomination, a common measure taken by governments during periods of inflation, is a notable occurrence. However, this does not solve the underlying problem of inflation or hyperinflation. It is only a way to rename the currency and remove zeros, without truly addressing the root cause of hyperinflation: the expansion of the money supply. In a later video, we will discuss the real solutions to address and resolve the problem of hyperinflation. In this series, we will highlight the consequences of a simple redenomination without adequate reforms: inflation persists. After Argentina, our study will cover Brazil, Bolivia, Peru, Nicaragua, and Venezuela. We will examine the redenominations that have taken place in these countries.

Before 1826, Argentina used the Spanish dollar. After its independence in 1816, it introduced its own currency based on the Spanish reàl, resulting in the creation of a similar currency. The table begins in 1881, the year of the introduction of the "peso moneda nacional," with banknotes available up to 10,000. This was followed by the "peso ley," which was exchanged at a rate of 100 to 1 and featured banknotes up to one million. Then, the "Argentine peso" arrived with an exchange rate of 10,000 to 1 (equivalent to removing four zeros), and banknotes up to 10,000. In 1985, the "australes" was introduced and exchanged at a rate of 1,000 to 1, with banknotes available up to 500,000. In 1992, the current "peso ley" was established at a rate of 10,000 to 1, once again removing four zeros. Only the years 1989 and 1990 experienced hyperinflation.

Brazil is a notable example of monetary redenomination, as illustrated by its history of currency changes. Before its independence, Brazil used the Portuguese reàl as its currency. However, as early as 1747, the country began using its own "Brazilian reàl," long before its declaration of independence in 1822. The table starts in 1818, marking the beginning of the issuance of Brazilian banknotes. Previously, the currency was primarily in the form of coins. These banknotes reached values of up to one million reais. Starting from 1942, Brazil began a series of redenominations. In most cases (1942, 1967, 1986, 1989, 1993), the conversion rate was 1:1,000. In 1990, a name change occurred without conversion. The sequence of these currencies is as follows:

The highest denomination bill reached 500,000, and the last redenomination in 1994 was done at a rate of 2,750 to 1. The years 1989 and 1990 were marked by hyperinflation, while 1993-1994 saw high inflation rates that did not reach the threshold of hyperinflation (50% per month). After this tumultuous period, Brazil once again redenominated its currency by removing several zeros.

Bolivia is another example of a country that has experienced periods of acute inflation, necessitating currency redenominations. Here is a summary of its monetary history:

Before its independence in 1825, Bolivia used the Spanish dollar as its currency. After independence, the country introduced the Bolivian Sol between 1827 and 1864, replacing the Spanish dollar. However, it is worth noting that the first banknotes in Bolivia were introduced only in 1864.

In 1864, the first "Boliviano" was introduced, with an exchange rate of 1,000 to 1 compared to the Bolivian Sol. This currency remained in circulation until it reached a denomination of 10,000 Bolivianos. Subsequently, Bolivia changed its currency to the "Bolivian Peso," which experienced severe hyperinflation, eventually reaching denominations of up to 10 million. This episode of inflation peaked in the years 1984-1985, with monthly inflation rates often approaching the hyperinflation threshold of 50%. To provide some perspective, a constant inflation rate of 50% per month over a full year results in an annual inflation rate of approximately 12,800%. In 1985, Bolivia's annual inflation rate reached 11,749%, indicating that inflation was close to or exceeded the 50% threshold almost every month.

In response to this monetary crisis, in 1987, Bolivia introduced a new currency, simply called the "Boliviano," with an exchange rate of 1 million Bolivian Pesos for 1 Boliviano. This version of the Boliviano is still in circulation today.

That is an overview of Bolivia's tumultuous monetary history, marked by periods of hyperinflation and redenominations.

Peru presents an interesting case regarding the effects of the arbitrary 50% rule. Starting with its monetary history, Peru used Spanish gold until the 19th century, when it declared its independence in 1821. The Peruvian dollar was in use from 1822 to 1863. In 1863, the Peruvian reàl was replaced by the soldi oro, at a rate of 10 to 1, reaching a maximum value of 50,000. In 1985, the currency "Inti" was introduced with a conversion rate of 1000 to 1, peaking at 5 million. In 1991, the "SOL" was launched with an exchange rate of 1 million to 1, with banknotes ranging from 10 to 200. Examining the redenomination periods, 1988 is considered a year of hyperinflation, especially in September. July-August 1990 also saw a period of hyperinflation. In 1988, the annual inflation rate was 667%, with a peak of 50% in September. In contrast, 1989 experienced an inflation rate of 3000% without any month exceeding 50%, so it was not classified as hyperinflation. In 1990, inflation peaked at 7481%. It is clear that the 50% rule can be arbitrary, as 1988 was considered a year of hyperinflation, unlike 1989. If this rule were reconsidered, it might be wise to lower the threshold to include periods like the one experienced by Peru in 1989.

Nicaragua, formerly under Spanish rule, initially used the Spanish dollar, like many other countries colonized by Spain. After being integrated into the Spanish Empire, the Mexican Empire, and then the Federal Republic of Central America, Nicaragua declared its independence. Starting in 1878, the peso became the country's official currency, with values fluctuating between 1 and 100. In 1912, the country introduced the first Cordoba, followed by the second in 1988 and the third in 1991, which is still in use today. The first Cordoba reached a value of 1 million, and the second 10 million. The redenomination in 1991 followed several years of hyperinflation.

Venezuela is the last country mentioned in this video. The country has undergone four currency redenominations over time. In its early days, Venezuela used the Spanish dollar before declaring independence in 1811. In 1879, it introduced the bolivar as the official currency, which remained in effect until 1983, when the government opted for a floating exchange rate system using the dollar.

A notable fact about Venezuela is its membership in the Latin Monetary Union. This union included coins such as the 5 pesetas from Spain, the 5 drachmas from Greece, the 5 bolivars from Venezuela, the 5 lire from Italy, the 5 Belgian francs, and the 5 French francs.

During this period, the 5 bolivar coin from Venezuela had the same weight as those of the Union member countries, including Italy, Spain, Belgium, and France. These bolivars were made of silver, with a specific coin from 1929 weighing 25 grams and having a purity of 900, or 90% pure silver. With the current price of silver, this coin is worth approximately $17 to $18 (US Dollars).

Following the adoption of a floating exchange rate in 1983, several redenominations followed:

In the next video, a collection of hyperinflation bills will be presented, focusing on Venezuela and other listed countries. This collection contains almost all Venezuelan bills. The study will focus on the different redenominations for each of the mentioned countries. Additionally, there will be an exploration of redenominations in Zimbabwe, a topic of considerable interest.

We have seen that hyperinflation is not the only indicator of an economic catastrophe. Redenominating multiple times, removing zeros, or changing the name of the currency has direct repercussions on the population, ranging from the loss of aid to food problems. Although hyperinflation is concerning, the number of redenominations, as observed in Brazil, shows a more complex reality.

Based on the criterion of 50% inflation per month, several periods could have been classified as hyperinflation. This is particularly true when examining the criteria of the international accounting organization, which considers characteristics such as the rapid abandonment of the currency by the population, wage indexing, and loans with high interest rates to compensate for inflation.

In conclusion, hyperinflation is just one aspect of economic challenges. High inflation alone can be equally damaging. The next section will explore possible solutions to overcome hyperinflation.