The conclusions mentioned are drawn from the book "Monetary Regime and Inflation" by Peter Bernholz. According to Bernholz, the only method to end inflation is to implement a monetary reform and impose fiscal restrictions on the government. These restrictions involve the establishment of an institution, such as a central bank, that operates independently from the government's political decisions. High and hyperinflation are often the result of financing budget deficits through the creation of money. To address moderate inflation, it is essential to decrease the growth of the money supply. Bernholz also suggests that this monetary growth should be relative to neighboring countries. A surprising point is that, during periods of high or hyperinflation, the total value of the money supply can actually decrease. A striking example of this situation is Zimbabwe.

When studying Zimbabwe, it was noticed that 10 trillion units of the money supply had lost all their value. In Weimar, it was possible to print two-thirds of the total nominal value of 65 billion units of the money supply in a single day. This shows how the money supply can be devalued. To remedy this situation, it is necessary to significantly increase the money supply to reach an appropriate level. Then, a monetary reform is indispensable. In a situation of high inflation, this reform is unavoidable, but it must ensure that there is enough money in circulation. After this step, restrictions can be imposed on the government.

According to Bernholz's observations, when addressing inflation problems, institutions like the IMF and the World Bank do not always adopt the most effective strategies. In some cases, when a country needs to increase its money supply, these institutions seek to reduce it. The key is to reach an adequate monetary level and then impose limits on its growth, thus avoiding financing government expenses through monetary creation.

An interesting aspect raised by Bernholz is that the success of a monetary reform depends not only on its technical relevance but also on the trust that the population places in it. Some well-designed reforms can fail because the public does not trust them, while others, poorly designed, can succeed because the population trusts them. Perception and public trust are therefore essential elements in the success or failure of a monetary reform.

Zimbabwe gained independence in 1980 and introduced its own currency, the Zimbabwean dollar. Initially, two Zimbabwean dollars were worth about 1.60 US dollars. However, in 1997, following social measures in favor of war veterans, the currency devalued by 72% in one day during Black Friday. Then, in the early 2000s, the country launched a land redistribution program, which involved taking land from white owners and distributing it to the local population. This decision harmed exports because the new owners often lacked the necessary expertise to manage large-scale farms. As a result, while Zimbabwe was a net exporter in 1999, it became a net importer in 2003.

In 2006, the country introduced a new version of its currency, the ZWN, with an exchange rate of 1 to 1,000. In 2008, another denomination, the ZWR, was introduced with an exchange rate of 1 to 10 billion. This led to the creation of the iconic 100 trillion banknotes.

Therefore, after 2009, facing a persistent monetary crisis and rampant hyperinflation, Zimbabwe abandoned its national currency and allowed the use of foreign currencies, mainly the US dollar. This decision, although radical, put an end to hyperinflation. A key lesson to learn is that halting excessive money issuance and ending central bank financing of the budget deficit can help prevent hyperinflation.

However, dollarization is not a miracle solution. Although it can end hyperinflation, it presents other economic challenges. One of the consequences is the loss of autonomous monetary policy. Without its own currency, a country cannot adjust its monetary policy to respond to internal economic shocks.

In 2007, Zimbabwe's inflation rate reached the threshold of 50% per month, officially marking the country as being in a state of hyperinflation. Following dollarization in 2009, hyperinflation ceased; however, the country continued to face other economic challenges. It is concerning to note that Zimbabwe has since attempted to reintroduce its own currency, and signs of high inflation have reappeared. According to certain international organizations, the country may already meet the criteria for hyperinflation again, even if it has not yet reached the official threshold of 50% per month. This serves as a reminder of the dangers of excessive money issuance and central bank deficit financing.

In my book titled "Everything About Bitcoin," I dedicated an entire chapter to hyperinflation in Zimbabwe. I detail the significant events, providing various examples that illustrate how the country ultimately brought an end to hyperinflation.

For those curious about the German experience after World War I, I highly recommend the comic book "The Reich's Banker." It narrates how Germany managed to overcome hyperinflation, notably through the creation of the Rentenmark.

The key takeaway is that several strategies exist to overcome hyperinflation. One can opt for dollarization or introduce a new currency. These solutions will only work if the population has confidence in them. It is crucial to impose strict constraints. A truly independent central bank is essential. It must not inflate the money supply to cover government deficits. In the case of mild inflation, limiting the growth of the money supply should suffice. However, when faced with hyperinflation, it is crucial to first have an appropriate money supply in relation to the economy's size. Then, it is imperative to impose strict constraints on the government to stabilize the situation.