Understanding Lebanon's Currency Crisis: The Impact of Hyperinflation
Lebanon is once again in the spotlight due to escalating tensions in the Middle East. Prior to these recent events, Lebanon had already become a symbol of how swiftly a seemingly stable society can descend into turmoil.
For those who keep an eye on significant global economic events, Lebanon's recent past serves as a stark illustration of what a full-blown currency collapse looks like in a contemporary, advanced economy. While there are numerous comprehensive books that discuss hyperinflation in abstract, academic terms, the human aspect is often overlooked. This is the story of what it's like to be an ordinary, productive individual with a family and a bank account, living through the collapse of your country's currency.
Tony Yazbeck, co-founder of The Bitcoin Way, experienced this reality firsthand. His story offers a unique, personal insight into what it means when your country's banking system disintegrates, when you lose access to your savings, when food prices increase tenfold in a few months, and when even basic necessities like medicine and fuel become luxuries.
Lebanon: A Nation on the Edge
Prior to its economic collapse, Lebanon was a vibrant, cosmopolitan country, often referred to as the "Paris of the Middle East." Its economy was buoyed by banking, tourism, and services, positioning it as a bridge between East and West. For Tony, this prosperity was not an illusion—it was his everyday reality.
However, beneath the surface, problems were brewing. Lebanon’s banking sector, once a source of national pride, was built on unsustainable practices, and the country was sinking in debt. The Lebanese pound had been pegged to the U.S. dollar at an artificially high rate by Lebanon’s central bank for years, creating a false sense of stability. When the inflows of dollars needed to maintain this currency peg dried up, the house of cards collapsed.
In 2019, Lebanon’s banks began to limit access to savings, imposing informal capital controls without a legal framework. For those unfamiliar with a currency crisis, the limitation of bank withdrawals is one of the first indications that the system is failing.
From Successful Businesses to $70 in Hand
In early 2020, Lebanon defaulted on its foreign debt, and the value of the Lebanese pound plummeted. Hyperinflation set in, eroding the purchasing power of ordinary people.
Tony watched helplessly as his savings disappeared and his businesses collapsed. Hyperinflation took hold with shocking speed. The destruction wasn’t limited to material wealth; the psychological toll was immense.
A Fractured Civil Society
As Lebanon’s currency collapsed, so did its social fabric. Basic goods became scarce, and the price of everyday items skyrocketed. Power dynamics within communities shifted as those who controlled essentials like food and fuel gained disproportionate influence.
In response to the crisis, people turned to alternative forms of exchange. Bartering became common, with people trading goods and services directly. Digital currencies, and especially stable coins like Tether (USDT), also gained traction as people sought ways to preserve value outside the collapsing banking system.
Bitcoin as a Potential Lifeline
As Tony recounts the collapse, questions loom large: Could this have been prevented? Could individuals have somehow protected themselves better? For Tony, the answer is clear: Yes – with access to bitcoin, many of the worst effects of the crisis might have been avoided.
Lessons for the World
Lebanon’s crisis offers a stark warning to the rest of the world. Tony points to the U.S. as an example of a country that is walking the same dangerous path as Lebanon.
The lessons from Lebanon’s collapse are clear: Protect your wealth before a crisis hits, and don’t assume that your government or banking system will be there to save you when things go south.
A New Mission to Rebuild with Bitcoin
In the aftermath of Lebanon’s collapse, Tony has dedicated his life to helping others avoid the same fate. He founded The Bitcoin Way, a bitcoin education and technical services business designed to teach people how to use bitcoin to protect themselves from currency crises.
The Road Ahead
Tony believes that the collapse of the Lebanese pound was avoidable, but that would have required structural reforms that never came. As Tony reflects on his experience, he sees parallels between pre-crisis Lebanon and the current state of many developed economies.
Lebanon’s collapse is not just a cautionary tale for people living in developing economies. It’s a wake-up call for the entire world. Bitcoin offers a way out – an inflation-proof alternative that can protect the wealth of individuals when fiat currencies fail.
Bottom Line
Tony's experience is a stark reminder of the fragility of fiat systems and the importance of financial sovereignty. His story serves as a warning to the rest of the world about the potential risks of a global currency crisis. It's a wake-up call that should not be ignored. What do you think about this article? Share it with your friends and sign up for the Daily Briefing which is everyday at 6pm.
Understanding Lebanon's Currency Crisis: The Impact of Hyperinflation
Lebanon is once again in the spotlight due to escalating tensions in the Middle East. Prior to these recent events, Lebanon had already become a symbol of how swiftly a seemingly stable society can descend into turmoil.
For those who keep an eye on significant global economic events, Lebanon's recent past serves as a stark illustration of what a full-blown currency collapse looks like in a contemporary, advanced economy. While there are numerous comprehensive books that discuss hyperinflation in abstract, academic terms, the human aspect is often overlooked. This is the story of what it's like to be an ordinary, productive individual with a family and a bank account, living through the collapse of your country's currency.
Tony Yazbeck, co-founder of The Bitcoin Way, experienced this reality firsthand. His story offers a unique, personal insight into what it means when your country's banking system disintegrates, when you lose access to your savings, when food prices increase tenfold in a few months, and when even basic necessities like medicine and fuel become luxuries.
Lebanon: A Nation on the Edge
Prior to its economic collapse, Lebanon was a vibrant, cosmopolitan country, often referred to as the "Paris of the Middle East." Its economy was buoyed by banking, tourism, and services, positioning it as a bridge between East and West. For Tony, this prosperity was not an illusion—it was his everyday reality.
However, beneath the surface, problems were brewing. Lebanon’s banking sector, once a source of national pride, was built on unsustainable practices, and the country was sinking in debt. The Lebanese pound had been pegged to the U.S. dollar at an artificially high rate by Lebanon’s central bank for years, creating a false sense of stability. When the inflows of dollars needed to maintain this currency peg dried up, the house of cards collapsed.
In 2019, Lebanon’s banks began to limit access to savings, imposing informal capital controls without a legal framework. For those unfamiliar with a currency crisis, the limitation of bank withdrawals is one of the first indications that the system is failing.
From Successful Businesses to $70 in Hand
In early 2020, Lebanon defaulted on its foreign debt, and the value of the Lebanese pound plummeted. Hyperinflation set in, eroding the purchasing power of ordinary people.
Tony watched helplessly as his savings disappeared and his businesses collapsed. Hyperinflation took hold with shocking speed. The destruction wasn’t limited to material wealth; the psychological toll was immense.
A Fractured Civil Society
As Lebanon’s currency collapsed, so did its social fabric. Basic goods became scarce, and the price of everyday items skyrocketed. Power dynamics within communities shifted as those who controlled essentials like food and fuel gained disproportionate influence.
In response to the crisis, people turned to alternative forms of exchange. Bartering became common, with people trading goods and services directly. Digital currencies, and especially stable coins like Tether (USDT), also gained traction as people sought ways to preserve value outside the collapsing banking system.
Bitcoin as a Potential Lifeline
As Tony recounts the collapse, questions loom large: Could this have been prevented? Could individuals have somehow protected themselves better? For Tony, the answer is clear: Yes – with access to bitcoin, many of the worst effects of the crisis might have been avoided.
Lessons for the World
Lebanon’s crisis offers a stark warning to the rest of the world. Tony points to the U.S. as an example of a country that is walking the same dangerous path as Lebanon.
The lessons from Lebanon’s collapse are clear: Protect your wealth before a crisis hits, and don’t assume that your government or banking system will be there to save you when things go south.
A New Mission to Rebuild with Bitcoin
In the aftermath of Lebanon’s collapse, Tony has dedicated his life to helping others avoid the same fate. He founded The Bitcoin Way, a bitcoin education and technical services business designed to teach people how to use bitcoin to protect themselves from currency crises.
The Road Ahead
Tony believes that the collapse of the Lebanese pound was avoidable, but that would have required structural reforms that never came. As Tony reflects on his experience, he sees parallels between pre-crisis Lebanon and the current state of many developed economies.
Lebanon’s collapse is not just a cautionary tale for people living in developing economies. It’s a wake-up call for the entire world. Bitcoin offers a way out – an inflation-proof alternative that can protect the wealth of individuals when fiat currencies fail.
Bottom Line
Tony's experience is a stark reminder of the fragility of fiat systems and the importance of financial sovereignty. His story serves as a warning to the rest of the world about the potential risks of a global currency crisis. It's a wake-up call that should not be ignored. What do you think about this article? Share it with your friends and sign up for the Daily Briefing which is everyday at 6pm.
