An interesting reflection from Financial Sense.
Yugoslavia tried to jumpstart its woeful economy by turning to a Keynesian “solution”. In 1989, Yugoslavia enacted its “stimulus plan”; it went on a government spending binge. If the country was wallowing in economic squalor, where did the money come from? Simple....it was created out of thin air! In other words...INFLATION. It merely printed up the money and flooded the struggling economy with “spending”. That was the final nail in the coffin for my former homeland. The “stimulus plan” brought on hyperinflation and Yugoslavia collapsed amid economic and social disintegration. By 1994, Yugoslavia was no more. New sovereign nations arose from the rubble (such as Croatia where I was born). The ruling elite in the former Yugoslavia thought (wrongly) that prosperity and wealth could be created or stimulated by simply using government force and a printing press. How wrong they were!
