Inflation - The Zimbabwe way

     Think that you worked hard for 10 years and saved some Lacs of money and unfortunately you got a stupid government (say like CPI which cant be ruled out completely ) and the inflation touched 11,200,000% as it did in Zimbabwe in 2008 (http://edition.cnn.com/2008/BUSINESS/08/19/zimbabwe.inflation/index.html) all our life savings will be sufficient to buy say 20-30 kgs of rice. If you imagine someone who started saving money in Zimbabwe around 1990's and didn't have proper financial intelligence (or did not have a intelligent friend like me) would have been in a terrible state in 2007-08.Even if we did everything right from our side our Government can screw us big time by deflating the value of the currency.So I just want to give a basic knowledge on inflation in this blog.
     Generally all the central banks encourage moderate inflation (5-10%) by various tools so that people will circulate money by spending or investing which will create employment.So if you take 10 years from now almost all the prices will be more than double as that was the primary job of the RBI.So if you keep money in banks or insurance  policies most probably you will become poorer(may be not as poor as in Zimbabwe :)) compared to what you are today.
      The currency note is just a paper with some ink markings ,what it can buy (read value) completely depends on our economy and and our government So instead of blindly believing on the government we should try to de-riskify  our-self by creating assets(like equity or real-estate) which can offset the inflation  or we should follow this to slove our problem http://dilbert.com/strips/comic/2008-09-16/