{"id":24347,"date":"2026-03-09T04:15:10","date_gmt":"2026-03-09T11:15:10","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=24347"},"modified":"2026-03-19T07:49:23","modified_gmt":"2026-03-19T14:49:23","slug":"brazilian-hyperinflation-a-reader-explains-what-life-was-like-2","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id24347-brazilian-hyperinflation-a-reader-explains-what-life-was-like-2.html","title":{"rendered":"Hyperinflation in Brazil: A Reader Explains What Life Was Like"},"content":{"rendered":"<p><a href=\"https:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2014\/03\/brazil-flag.jpg\" rel=\"lightbox[24550]\"><img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-24564\" title=\"brazil flag\" src=\"https:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2014\/03\/brazil-flag.jpg\" alt=\"brazilian hyperinflation\" width=\"400\" height=\"282\" \/><\/a><em>(Readers: In 1990, inflation in Brazil was running at 3000% per year. At that rate, a loaf of bread that cost $3 on New Year&#8217;s Day would cost $93 by December 31. With that in mind, one of my readers, Leasi, had told me that she lived in Brazil during its hyperinflation event in the 1990s. So I asked <\/em><em>if she would be willing to shar<\/em>e <em>her experience with us, and <\/em><em>she graciously agreed. This is her story. &#8212; Len)<\/em><\/p>\n<p>I was born in Brazil and have listened to people talk about inflation for as long as I can remember. When I was in my early teens I remember that my mother sometimes bought things that she thought would be more expensive the next day.<\/p>\n<p>Despite graduating from college in the early 1980s, I could not find a job in my chosen field. I finally took a job as a secretary for the CEO of a Brazilian company. I had a reasonable income at the time, but by 1984, high inflation began to get out of control and prices started increasing every few days.<\/p>\n<p>Back then, I did not save anything. I didn&#8217;t even consider saving because the interest on a savings account was less than the rate of inflation.<\/p>\n<h3>Living with Hyperinflation<\/h3>\n<p>By 1990 the situation was terrible, and we were <a href=\"https:\/\/lenpenzo.com\/blog\/id602-18-scary-things-you-didnt-know-about-inflation-and-hyperinflation.html\" target=\"_blank\" rel=\"noopener noreferrer\">living with hyperinflation<\/a>. Prices began increasing more than 100% a month. For example, if you used a credit card to buy clothing the payment would double each month.<\/p>\n<p>The city that I lived in was cold during the winter and the houses still do not have heaters. At one point, I needed a coat, but I could not afford to pay for it in one payment. So I paid it off over a six-month period and ended up spending more than six times the original price.<\/p>\n<p>We lived day by day; we had more than 3000% inflation in 1990. As a result, everyone hurried to the grocery store on payday and bought everything they could. We had to because prices would be much higher the next day. Every can, jar, or box in a grocery store had a stack of price labels. By peeling them off, you could tell that the price had tripled during the short time on the shelf.<\/p>\n<p>We also bought all of the nonperishable food we could because we knew it would be more expensive by the end of the day too. We tried to keep our pantries filled with vegetable oil, dry grains, canned goods, cleaning products, toilet paper and milk. (Brazilians buy milk in tetra-packs that have a long shelf life.)<\/p>\n<h3><strong>Deception and Illusions <\/strong><\/h3>\n<p>The real inflation rate was much higher than the official government inflation rate. As things got worse, the government passed laws to control prices on basic products like pasta or vegetable oil, but it was hard to find these products in any grocery store. As a result, many store shelves were empty or filled with uncontrolled items that we did not need.<\/p>\n<p>Eventually, the government allowed the vegetable oil industry to sell 900-milliliter bottles instead of the traditional 1-liter bottles in order to keep prices from rising. It was <a href=\"https:\/\/lenpenzo.com\/blog\/id18835-why-sneaky-package-size-reductions-are-no-longer-fooling-consumers-2.html\" target=\"_blank\" rel=\"noopener noreferrer\">just an illusion<\/a> though &#8212; the price was the same, but we got less.<\/p>\n<p>Industry adapted to hyperinflation by reinventing products with new names, labels, and packaging so they could sell them for higher prices. The government was not able to freeze the price of the &#8220;new products&#8221; at least not immediately.<\/p>\n<p>When the hyperinflation was at its worst, the government required companies to adjust the salaries of its employees for inflation. The &#8220;salary shot&#8221; was created to increase employees salaries by 2% less than the monthly inflation rate. For example, if inflation was 40%, I would get a 38% raise! Even so, that meant I still lost 10% of my effective salary every five months.<\/p>\n<h3><strong>Millionaire Paychecks<\/strong><\/h3>\n<p>Eventually, I was earning &#8220;<a href=\"https:\/\/lenpenzo.com\/blog\/id566-what-it-really-feels-like-to-be-a-millionaire.html\" target=\"_blank\" rel=\"noopener noreferrer\">millionaire&#8221; paychecks<\/a> that bought very little. A loaf of bread cost thousands.<\/p>\n<p>We purchased basic food, rent and utilities. Payments were readjusted monthly. I eventually had to sell my car, because the payment increased each month until it was more than half of my salary. After that I had to walk or use public transportation when it was available.<\/p>\n<p>During that time if you left money in the bank you would lose most of it over night. Each night we would check our balance and call a special broker who would invest our leftover money overnight. The money, plus interest, would then be back in your account the next morning, but it never quite kept up with inflation.<\/p>\n<p>People who had money bought US dollars. The rest of us just did the best we could to pay our bills, hoping that things would get better &#8230; someday.<\/p>\n<p>The government was always passing laws to control the economy. It didn&#8217;t work. I think Brazil has had six or seven different currencies during my lifetime. I remember coming home from work and listening to a new name and value of currency on TV. It always took awhile for the paper to change, but old notes of 100,000 became new notes of 100. Making all of those conversions made us good mathematicians. And although there were coins, <a href=\"https:\/\/lenpenzo.com\/blog\/id575-is-it-finally-time-to-get-rid-of-the-penny-2.html\" target=\"_blank\" rel=\"noopener noreferrer\">nobody used them<\/a> because they had no value.<\/p>\n<p>Finally, in 1993, there was yet another plan to change the currency. This time there was advance notice. The new currency had its value attached to the US dollar and, over time, Brazil abandoned its old currency and converted to a new strong currency called the <em>real<\/em>. By 1994, hyperinflation was over.<\/p>\n<p>Since 1996, inflation has been under 10% a year.<\/p>\n<h3><strong>Old Scars Run Deep<\/strong><\/h3>\n<p>My generation still has many scars from hyperinflation. After coming to the United States in 2003, I had the impulse to buy basic necessities because they were cheap. It took me a long time to realize that I could save money to buy things when they were needed, that I didn&#8217;t have to buy them on payday.<\/p>\n<p>Most people have not had to live with the hyperinflation that we had in Brazil, but I see signs that it is coming here. It is something that I survived, but I don&#8217;t want to live through it again.<\/p>\n<p><em><a href=\"https:\/\/lenpenzo.com\/blog\/id24352-brazilian-hyperinflation-a-reader-explains-what-life-was-like-part-2.html\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>Click here for Part 2<\/strong><\/a><strong> of Leasi&#8217;s story.<\/strong><\/em><\/p>\n<p style=\"text-align: right;\"><span style=\"font-size: smaller;\">Photo Credit: Free Grunge Textures at www.freestock.ca<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>(Readers: In 1990, inflation in Brazil was running at 3000% per year. At that rate, a loaf of bread that cost $3 on New Year&#8217;s Day would cost $93 by December 31. With that in mind, one of my readers, Leasi, had told me that she lived in Brazil during its hyperinflation event in the [&hellip;]<\/p>\n","protected":false},"author":204,"featured_media":26617,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","pmpro_default_level":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[479,489],"tags":[],"class_list":{"0":"post-24347","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economic-collapse","8":"category-macroeconomics","9":"pmpro-has-access","10":"entry"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.8 (Yoast SEO v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Hyperinflation in Brazil: A Reader Explains What Life Was Like<\/title>\n<meta name=\"description\" content=\"In 1990, inflation in Brazil was running at 3000% per year. 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