A taste of hyperinflation

December 11, 1991

A taste of hyperinflation

By Renfrey Clarke

MOSCOW — When the first details of Yeltsin's "profound economic reforms" hit the Russian press toward the end of October, the public reaction was quick and spectacular.

Sales of the astronomically priced goods in the private commercial stores almost doubled in the first week of November, as people rushed to turn their savings into items that would keep their value.

Business entrepreneurs rushed to change their roubles for hard currency, at any price. At the official currency auctions, the value of the rouble crashed to less than two US cents.

Inspired by the government's rhetoric of "anything goes", sharp operators throughout Russia moved to cash in. The Cherkizovsky Meat Combine, one of the handful of large enterprises that keep a tight hold on Moscow's meat supplies, upped the price of its "Soviet" brand of smoked sausage to 140 roubles a kilogram (at the Moscow markets a kilogram of beef costs around 40-45 roubles). The sausage was sold for 162 roubles a kilogram in state meat stores, where it was quickly dubbed "anti-Soviet sausage".

As shoppers observed dolefully, Russia had come to the point where a kilogram of sausage cost more than a month of the old age pension.

In the second week of November, Moscow shoppers lining up in the bread shops were outraged to find that the prices of various types of black bread, accounting for about a quarter of total bread output, had been raised by as much as 600%. The new prices were decreed by the right-wing Moscow city government.

By the time details of the first round of "reforms" appeared in the press on November 18, the confidence of Russians that their leaders were really on top of the country's problems had taken a battering.

Opinion poll results announced on November 23 showed that 59% of Moscow residents "in one degree or another" supported Yeltsin's reform program. This was to be expected in a city where there is no real opposition press capable of explaining the program's hopelessly flawed character.

But this support clearly lacks real conviction. Further poll findings announced on November 28 showed that 44% of Russians expect the winter or spring to bring economic catastrophe and mass disorder.

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