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Thursday, 26 February 2015 00:00

Ukraine Enters HYPERINFLATION! See How UltraCoin Smart Contracts Protect Individuals and Enable Speculators Featured

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From the CATO institute:

Since the New Year, Ukraine’s currency – the hryvnia – has collapsed, losing 51 percent of its value against the U.S. dollar. To put this rout into perspective, consider that the Russian ruble has only lost 8 percent against the greenback during the same period.

Like night follows day, the hryvnia’s meltdown has resulted in a surge of inflation. The last official Ukrainian year-over-year inflation rate is 28.5 percent. This rate was reported for January and is out of date. That said, the official inflation rate has consistently and massively understated Ukraine’s brutal inflation. At present, Ukraine’s implied annual inflation rate is 272 percent. This is the world’s highest inflation rate, well above Venezuela’s 127 percent rate (see the accompanying chart).

...  estimate[d] Ukraine’s current annual inflation rate to be 272 percent – and its monthly inflation rate to be 64.5 percent. This rate exceeds the 50 percent per month threshold required to qualify for hyperinflation. So, if Ukraine sustains its current monthly rate of inflation for several more months, it will enter the record books as the world’s 57th hyperinflation episode. 

There are two ways to approach this through UltraCoin - one as an individual or corporation looking to hedge against the economically destructive forces of hyperinflaton, the second as a speculator looking to profit.

Thei individual looking to protect themeselves from hyperinflation can swap their Hyrvna holdings exposure for GLD - the gold tracking ETF. This would be an expensive hedge that costs less then 3 cents per every $10, and will drop down to less than half of that in volume. Of course, all that glitters is sometimes not always golden. Gold hasn't held its value as well as the inflated USD (relative to most world debased currencies) YTD, but still has done a hell of a lot better then the UAH.

Ukranian Hyperinflation hedge for individuals

For the speculatory who wishes to go balls to the wall, you can use UltraCoin to actual go long/short to distinct and separate currency pairs. The rather strong USDUAH pair would be your long exposure and you would short the UAHUSD pair. To put some spice in the mix (as if this wasn't enough) dial in 80x digital leverage. One can consider using another strengthening (or percieved to be strengthening, which is the dangerous part) curreny such as the Swiss franc on the pay (short) leg, although that would have weakened this return over the last few weeks as the CHF is weakening again. Alas, you are free to put whatever ticker in their you want and dial in whatever leverage you want. I suggest you design the trade in our UltraCoin trade modeler, first, (Excel required). 

Ukranian Hyperinflation Speculative homerun for traders   funds

As you can see, the leverage is dailed up to 80x, but P&L is capped the principal amount put at risk. What this means is you will only get (or lose) up to what you put in as a maximum (these are not binary options and do have a continuous payout that exactly mimics that of the underlying asset(s)), but you will get (or lose) it very, very quickly! This is perfect for you action junkies!

Download the tutorial.

Download the UltraCoin client for PC or Max/Linux.

Download the our UltraCoin trade modeler, first, (Excel required)


Read 5870 times Last modified on Thursday, 26 February 2015 14:47
Reggie Middleton

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