Really shows how truly valuable ideas can succeed no matter what state the world around them is in.
Not exactly. Again, not saying she wasn't clever or didn't bust her ass but it wasn't an entirely unique concept and luck/connections count for a lot.
I just looked up one, Prodigy, and it appears that it started around 1980 at which point online shopping was one of the motivators.
I'm not saying that I, or most people, were shopping online by 1992, but I think that's way too late to call the idea "forward thinking". Whoever was considering the idea in the 60s or 70s was "forward thinking".
Yes, businesses dealt in US dollars.
Prices for major things like cars and apartments were in so called "conventional units" (у.е., условная единица), widely known euphemism for US dollars.  Cash dollars were very common for these purchases.
For groceries, rubles were used.
For things like washing machines stores had prices in "conventional units", with a daily changing definition of them.
If you could save, you would do it in USD cash. Exchanging between rubles and dollars was very common and cheap. Everybody knew where cash currency traders ("валютчики") were, usually on the main city square. (I think trading currencies outside of banks was illegal, but police looked away, due to corruption and light/no punishment at the time.)
Salaries for domestic jobs were mostly in rubles, with disastrous consequences. Middle class had almost ceased to exist.
Sometimes both happen. Eg in Germany after the war cigarettes were a common currency, even among non-smokers.
But that's probably more a function of comparatively effective restrictions on using foreign currency directly, than anything else? Not sure.
There was a major devaluation in 1998. This is the reason why people were still suspicious about rubles in the early 2000s.
Saving accounts would follow inflation, so if you were rich enough to keep your money on the bank, you were relatively safe.
People would rush to quickly spend their salary in the supermarkets the day they got paid. This created the habit of having "purchase of the month". You would buy food and home stuff for the whole month and stock at home.
The supermarkets had employees whose full job was to remark the pricing tags of all products. Some products could have their price adjusted more than once per day.
From time to time the government would freeze the prices, which would give some time of a more sane world. But invariably that policy wouldn't work, and at some point the government had to unfreeze the prices and the inflation would come back harder.
The bank system evolved a lot during this time, as cash was useless, everything had to be bank transactions.
The root of the problem varies from scenario to scenario. In the case of Brazil, it was the same oil shock that hit the US so bad in the 1970s. Both countries tried to spend their way out of it, but Brazil couldn't keep up, and its military dictatorship got more and more paranoid. The resulting civil war made it impossible to put the economy on a stable footing until a real government came back in the 80s.
Look at it this way: an inflation index is a low-dimensional approximation of inflation in the economy as a whole. But the coefficients of this approximation are effectively random, even if well substantiated by consumer budget surveys etc. (which they were). As inflation grows you have to consider the risk that the index (or the USD, for that matter) diverges from your current and probable future cost structure. Maybe it underweighs diapers and you're about to have children. Maybe a lot of people are about to have children and renege on their debts, if you're a bank.
So the USD is basically the price of all imported goods, but Brazil is a big economy that's not a simple "exports X, imports everything else". During hyperinflation my parents used it for long-term savings -- they had immigrated to Brazil, who knows if they might have to move countries again. But they mostly did big supermarket rounds to last 1 month+ of goods and otherwise trusted banks for medium-term (say, to buy a car) savings.
It was really an administered inflation. The country had all sorts of indexes and triggers that guaranteed the force necessary to keep it going.
At the same time, the infrastructure was built for the constant devaluation and frequent currency changes. Already in the 1980s you could easily transfer money to any place and to any bank. There was no need for something like Western Union.
People used dollars as a reserve, but not as much as in other South American countries. You certainly didn't see prices advertised in dollars.
The biggest problem was, contracts had to be written using the national currency, so they got obsolete very fast. For example, the government did some purchase and then paid 4 months late; it was effectively paying half. So the prices you had to put on paper had to guess the probable delay and compensate for.
Shops often try to set prices daily in their local currency, for the limited items they stock, and typically also have separate dollar prices. Many items can't be kept in supply with hyperinflation, so stores tend to dramatically narrow what they carry. They also have adjusted to selling far smaller portions of goods (less risk and consumers can't afford as much). All of that is usually still not enough once inflation gets bad enough, it becomes an impossible juggling act, most get wiped out. The demand collapse that has gone along with the hyperinflation has killed a large number of businesses, shops, manufacturers.
From the Wall Street Journal :
> Giuseppe Cordivani’s factory on the outskirts of the capital used to make nearly 300 pairs of women’s shoes a day, from pumps to high-heeled dancing shoes that sold nationwide. With hyperinflation biting, he’s making just 20 today.
> “No one beats hyperinflation—no one,” said Mr. Cordivani, whose father founded the company 55 years ago. “We work just to try to cover our expenses.”
> A 2 million percent inflation rate is ravaging savings and salaries, devastating a once-vibrant manufacturing sector by suppressing demand.
> A handful of food plants are still producing but at minimal capacity. Food prices nearly quadrupled in January alone, according to Caracas-based Ecoanalitica. With shoppers buying only the most basic products, demand for canned tuna, milk, cereals for children and other products has fallen more than 80% since 2012, according to household polling by the Caracas pollster, Datanalisis. Consumption of meat fell nearly 60%, the polling shows, while demand for chicken dropped 74%.
> a family of four that bought food and covered other basic on the equivalent of $105 in December 2017 would now need more than $700, said Asdrubal Oliveros, an economist and director of Ecoanalitica.
I remember reading up on how in the immediate period of postwar Germany the Reichsmark was obviously inflated to nothing. People horded physical goods, any goods they could get their hands on. The result was shortages of everything. If you needed to buy anything, you'd exchange your goods for American cigarettes or bottles of booze that you'd then exchange for what you're actually looking for.
You see similar "economies" in prisons.
In the case of countries with active hyperinflation, if you use the currency at all it would be for a daily transaction. You'd hope to not hold any of it by the end. I do recall a story of how in Zimbabwe (before the hyperinflation got absolutely ridiculous), people still used they inflating currency, but the de-fact spread on the buy/sell was so large that traders could make a profit even if they ended up with worthless currency at the end. So markets find a way, but it's hugely inefficient.
(1)Holding too much foreign currency can present it's own issues. Storing it is difficult/risky and putting it in a dollar-account in a bank can be just as problematic. During the Argentinian default of the early 2000s, if you had money in a US-dollar account, the governnment confiscated it, converted your account Argentine pesos which was then promptly devalued.
Any essential consumable without expiration date can be stable store of values. Buy all the beans that you can and store that instead!
> Until recently, using foreign money was a crime the government enthusiastically threatened to prosecute. After the ruling socialists established currency controls back in 2003, they began patrolling for transactions that ran afoul of their Kafkaesque rules about money. Plain-clothed inspectors ran stings and raided businesses.
> According to the calculations of one top bank executive, about 30% of all transactions are made in dollars these days. I’d be shocked if that percentage didn’t keep growing. Which seems to be making moot one of the big theoretical debates in opposition circles: whether to adopt the dollar as Venezuela’s currency if they finally manage to take power from the socialists. The people already have.
This legal change happened very recently. August 2018, according to Bloomberg:
What do you mean by this? Hyper-inflation completely changes the economy and businesses. You can't save up money, which means no real investment. Whatever you don't spend within days becomes close to worthless, so large transactions become much harder. This is assuming you're also restricted from trading currency though.
Coupled with the innate scarcity and large capital commitments of real-estate and gold, you're not going to have a good time.
but what do they invest in? Surely for an investment to pan out, something is produced which is then sold!?
Hyperinflation always starts with some kind of economic shock, which the government responds to by borrowing, as is entirely reasonable. ("Printing money" is just a kind of borrowing, from the captive audience of its citizens who have to accept the local currency as payment and have to pay for government services in that currency.) But if they can't fix the original shock, everything just adjusts to that new price point. And if they keep applying the same solution, they get the same results.
The hyperinflation thus isn't great, but it's not really the problem, and you wouldn't make the problem better by doing away with the hyperinflation. You'd have the same bad economy with different numbers on the money. It's better not to have to do that to the money, but better still to get to the root of the matter -- which is challenging under the best of circumstances, and the circumstances that produce hyperinflation are usually not the best.
I am allergic to any defense or downplay of inflation because there is a lot of people here that see "advantages" in it. Mostly politicians that magically solved all cash flow problems of their governments by delaying payment for a couple months. They like to call this "economic development".