Because of inflation, our hot savings in the bank, no matter how much, are dwindling. Some financial experts like Ray Dalio he gave us very clear explanations on this matter. How long will we trust the bank, this leech that takes so many costs away from us and proves incapable of keeping our assets safe against the vagaries of life? The case of these Vietnamese will teach us much more about this Rug sweater skilfully made up, and its effects can only be felt in the most extreme conditions.
Inflationary gambling in Vietnam
For some, the story of this Vietnamese victim is a Rug sweater related to fiat currency (FIAT) seems innocent. For others, it contains many lessons to be learned against the massive inflation currently plaguing the world.
In 1983, a Vietnamese named Le Minh Toan thought it wise to entrust his savings worth 4,100 dong to the bank. He considered reaping the benefits, even using it during possible dark periods. At that time, this sum was equivalent to an ounce of gold, enough to buy an apartment in the center of Hanoi.
20 years later, the bank returned its assets, 109,778 dongs. Great, right? But this figure is just window dressing. There was inflation, that beast of prey that brings us so much misfortune. Do you have any idea what the 110,000 dong stood for saving for 20 years? equal to ” 3 bowls of pho “. 3 bowls of soup!
In such circumstances, one is logically looking for a culprit. We have already mentioned inflation: it reached 400% in the 1980s in Vietnam. But there is also the fact that the Vietnamese government devalued the dong in 1985: 10 old dongs were exchanged for 1 new dong.
Imagine the disappointment of the Vietnamese, when their assets were reduced by 90% during the decree.
Winning over inflation
Inflation rates of nearly 400% and the devaluation of the dong affected Vietnamese families. But that didn’t last very long.
Currently, Vietnam seems to be showing great statistics, while the United States, Europe, Lebanon and other countries seem to be plunging into the red. To give you an overview of the situation in Vietnam, here is what Singapore Bank UOB published about it:
- achieving a GDP growth rate of 6.5% in perspective;
- an inflation rate of 3.7% in 2022, which could be close to 5% in 2023.
It is enough to approve the policies of the Vietnamese government, which, despite the Covid-19, has chosen to facilitate the entry of foreign direct investment (FDI) and the revival of international tourism activities.
Even the IMF seems to be happy with the prudent policies from Vietnam. HSBC, which predicted an inflation rate of 3.5% for the country, only asked ” normalization of monetary policy “.
In addition, we will voluntarily mention the fact that the Vietnamese Fond of bitcoins (BTC) and cryptocurrencies. In 2021, wasn’t Vietnam at the top of the 27 countries in adopting crypto assets? At that time, 41% of the population of the land of the rice fields confessed to buy cryptocurrency.
From now on, the local players are just waiting for the regulation of the sector. Due to the proliferation of blockchain game projects, just to mention Axie Infinity from the Sky Mavis studio, Vietnam is not far from coming out of the inn, with or without inflation. This is a beautiful lesson that concerns the one-coiners think in the dark times we are going through now.
Sources: Vietnam Today; The Courier of Vietnam; Vietnam Plus; Reddit
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The blockchain and crypto revolution is underway! And the day the effects are felt on the most fragile economy in this world, against all hope, I will say that I was involved.