 Second, the KMT government proved thoroughly unable to manage the economy, allowing hyperinflation to result.Among the most despised and ineffective efforts it undertook to contain inflation was the conversion to the gold standard for the national treasury and the Chinese gold yuan in August 1948, outlawing private ownership of gold, silver and foreign exchange, collecting all such precious metals and foreign exchange from the people and issuing the Gold Standard Scrip in exchange.As most farmland in the north were under CPC's control, the cities governed by the KMT lacked food supply and this added to the hyperinflation.