Inflation Breeds Millions of Millionaires

April 20, 2008

The low man goes on adding one to one,
His hundred’s soon hit.
The high man, aiming at a million,
Misses an unit.
- Robert Browning.
In addition to Browning’s low man and high man, there is a third class which is already in the millionaire club and wants to bar the entry of others into this exclusive space. They have arrived at this high perch through hook or crook and want to close the door on others to the millionaire club. That is why they are making high decibel noises against the creeping inflation which has touched 7% (Plus) in India. That affects the entrenched millionaires because high inflation breeds millions of millionaires. Of course, one has to be at the right time, the right  place and under the right currency.

I should know because I became a millionaire in Iran in mid-1990s when I was not even a lakhpathi in India. I went to Iran to take part in an industrial exhibition for the company I worked for (L&T). I was booked in Holiday Inn, confiscated from the American owner following a nasty spat between the US and Iran – which lingers on even to this day. For my 8-day stay in Teheran, I changed 500 US dollars and got, in return, several million Rials in high denomination notes. The feeling of becoming a Rial millionaire in Iran was heady. But the mindset was attuned to dollars and Rupees. So, when I tipped the front office attendant, who brought my luggage to the hotel room, 10 Rials, he reacted violently, gesticulating menacingly and shouting at the top of his voice. That brought the hotel staff and guests to the scene of commotion. I did not know Farsi, the Iranian language, and my tormentor did not know English. When the manager was explained by me in English and by him in Farsi, it turned out that what I had paid him was less than one Indian naya paisa. The diplomatic manager, instead of dubbing me a miser, explained that it was illegal in Iran to give or accept tips.
That brought temporary truce and relief. But, every time I paid out for anything, it was in tens of thousands of Rials. Despite the astronomical price-list, one could not resist the temptation to buy precious stones and dry fruits invitingly displayed in shop-fronts along the streets of Teheran marked by gurgling and sparkling mountain streams flowing along the city streets.

So, to become a millionaire there has to be serendipity – right place right currency and right time. Germany was the right place during the closing years of Second World War. Countries at war print currency without limit and without the backing of gold – as is common in normal times. So, it was said that in war-time Berlin housewives went to the market with sacks of currency and returned with groceries stuffed in handbags. Simply stated, inflation is too much money chasing too few goods and services.
To understand the situation, one has to appreciate the dimensions of inflation. There is creeping inflation, as we have now, ranging between 1 to 5%. There is walking inflation ranging from 5 to 10%. There is high inflation ranging from20 to 200% - as was the case in Latin America in 1980s. If you think that you missed the opportunity of becoming a Peso millionaire in one of the banana republics, don’t despair. The next level of inflation is hyperinflation and it shoots through the ceiling all the time and the ceiling keeps moving north relentlessly.
The place to be in now is Zimbabwe where the rate of inflation was 100,000 per cent in January 2008, compared to 66,000 % in December 2007. The Reserve Bank of Zimbabwe in Harare printed and circulated, in the first week of April, the 50-million dollar note. It is worth one US dollar and can buy, locally, three loaves of bread. So, you can become a “dollar” millionaire fifty times over if you exchange one US dollar.

Being millionaire, or even billionaire, is not the end of the road. Entering that club even in the stable currency setting of US or Europe is not an unmixed blessing. One of the multi-millionaires, J Paul Getty, said in despair: “In some ways, a millionaire just can’t win. If he spends too freely, he is criticized for being extravagant and ostentatious. If on the other hand, he lives quietly and thriftily, the same people who would have criticized him for being profligate, will call him a miser”. On the same subject, Irish Digest said: “The difference between a poor man and a millionaire is that one worries over his next meal and the other over his last”. And on the link between money and happiness, one anonymous epigram says: “Money doesn’t always bring happiness. A man with ten million dollars is no happier than a man with nine million dollars.
Finally, there are other ways, than inflation and acquisition, of becoming millionaires as per another epigram: “If we profited by our mistakes, we would all be millionaires”. 
Some photos from Teheran show the flavour of the place.

John B. Monteiro, author and journalist, is Editor of website (Interactive Cerebral Challenger).

By John B. Monteiro
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