Thirteen Countries Who Could Collapse in the Coming Months 2023
When a nation collapses, the value of its currency can take a substantial hit or become completely worthless. This occurs because the worth of money is contingent upon the stability and economic strength associated with the country's government.
The potential for hyperinflation, caused by an excessive amount of printed money to finance debt repayment or government spending, can result in a rapid decrease in purchasing power for citizens. In extreme cases, people will turn to bartering goods and services instead of using what was once their currency.
Political instability can also influence the value of a collapsed country's currency. If there is no central leadership or ruling body, investors may doubt the capacity of a said nation to meet its obligations or secure economic security; this then leads to a reduction in demand for such money, thus devaluing it.
In some cases, a nation that has experienced collapse may implement the usage of another country's currency. This process is known as dollarization or euroization, depending on which currency is chosen. By doing so, the country can bypass the hiccups associated with having its own devalued currency. Though this does come at the cost of relinquishing control over monetary policy and being restricted in terms of accessing foreign currency reserves.
The status of a collapsed country's currency usually depends on variables such as inflation, political instability, and the adoption of foreign currencies. But generally speaking, it ends up either heavily devaluated or even worthless.
