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Comment by pavlov | Hacker News Reader

Heh. I always assumed that the name of the currency, real, has the meaning "royal". Instead, it's literally the same as the English word. What an interesting story.

Have any other governments suffering from high inflation tried this?

Instead of calling it a fictional unit, they could also just use an existing currency like the euro for the transitional period, then switch to a new national currency that has an initial exchange rate of 1:1 against the euro. (I'm picking the euro because it has a fairly neutral image, with over 20 countries using it already.)

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> use an existing currency like the euro ... [which] has a fairly neutral image ....

Opposition politicians looking for ammunition to attack the plan -- correction: looking for ammunition to attack the incumbents; they might have had little interest in attacking the plan otherwise -- would denounce the insult to national sovereignty.

That's surely why Brazil called it the URV - unit of real value - instead of admitting that in effect they repriced in Yanqui imperialist dollars. That's not in the linked NPR transcript but was mentioned in the longer NPR Planet Money podcast, linked at the bottom of the transcript.

I would assume that the Brazilian real is named after the Portuguese real which does mean "royal". It is an odd name in a democratic country, though.

Not totally odd considering Brazil started out as an Empire (after independence).

Exactly - Brazil's history and relationship with Portugal bear little resemblance to the USA's relationship with the UK. Brazilians in general are, if not proud, then at least amused by their country's royal history, and most major Brazilian cities have streets named after famous royals.

http://en.wikipedia.org/wiki/History_of_the_Empire_of_Brazil...

You are correct that 'real' means royal but it also means true or authentic (similarly in English).

I think that probably more accurately describes their intention behind the meaning of the name.

When I lived in Brazil in the 1990's, shortly after the currency changed from Cruzeiros to reais, the exchange rate was around 1.5. Today, it's 1.69 - there have been some relatively mild fluctuations since then but it has stayed remarkably stable.

You're right when you think about it - royal does have a double meaning of 'real' - as in 'what a royal pain in the ass'.

I believe Germany did in the late 1930s but for other reasons the Reichmark didn't quite end up as the world currency they wee hoping for.

You can decide to peg your currency against a more stable one eg west Africa and the French Franc - but unless the owners of the hard currency have some political reason to support your then you have to persuade the world's traders that you flobble-bead is actually worth a Euro.

Germany did introduce the Rentenmark to replace the Paper-Reichsmark in the mid-twenties to stop hyperinflation. (Later on they--essentially--reverted the name of the currency back to Reichsmark.)

There was no hyperinflation in the 30s. The early thirties saw depression and deflation. This Weltwirtschaftskrise lasted longer in the US than in Germany and is known as the Great Depression, there. The crisis contributed to the rise of Nazism in Germany, though.

I think there was a tiny little bit of hyperinflation in Germany in the 20-30s. IIRC the exchange rate was 1,000,000,000,000 Mark = 1 Reichsmark

Yes, there was hyperinflation in the early 20s, but _not_ in the 30s. (See http://en.wikipedia.org/wiki/1920s_German_inflation for some information in English. If you speak German, or can live with Google translate, then there's lots more material available.)

Why do you keep mentioning the 30s?

I'm a CS not a historian I thought the Weimar republic was 1930s

In 2000 years of history that's only an error of 1%

I take it you mean 10%?

Anyway, there wasn't much Weimar Republic to go around in the 30s. It ended in '33 with the Nazis coming to power. (The term Weimar Republic is just a name historians have made up for that period. Officially Germany was called Deutsches Reich from 1871 until 1945.)

Sorry, I am just a bit annoyed, because I have heard people make this very mistake more than once. I guess I am equally ignorant about, say, Chinese or Vietnamese history.

+-5 years in 2000years of German history ;-)

Sorry, I had thought the hyperinflation + general chaos led directly to the rather unpleasant party seizing power in 1933 and so assumed the bad times were immediately before then (ie 1930-1933). Hadn't realised they were actually a decade earlier.

you mean somewhere like zimbabwe trying this? It would be particularly tough since they have 1000% monthly inflation or some other insanity.

i don't think zimbabwe has enough control on their economy to pull this off.

Zimbabwe doesn't have a currency anymore.

They gave up and went to nationally accepting the dollar (USD), pula (Botswana), or rand (SA).

Helped things a lot. :-)

I've been wondering - how do they keep the civil service and army moving now? They were using inflation to pay for this. Having lost that ability, what are they doing instead?

Sounds not all that different from the solution in the article, changing to a trusted currency. The basis of the trust is the largest diff.

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