Hyperinflation and early Defaults
HalfDime
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what is the highest percentage loss in currency due to hyperinflation
The highest percentage loss in currency value due to hyperinflation occurred in Hungary after World War II. In July 1946, Hungary experienced a record monthly inflation rate of 41.9 quadrillion percent, with prices doubling every 15.3 hours. This remains the most extreme case of hyperinflation ever recorded.
Other notable hyperinflation episodes, such as Zimbabwe in 2008, saw monthly inflation rates estimated at 79.6 billion percent, but this is still far below Hungary's 1946 record. The Weimar Republic in Germany and other cases also experienced catastrophic currency losses, but none matched the magnitude of Hungary's postwar hyperinflation.
The first recorded country to default on its debt was Greece in 377 BC. This event is widely cited as the earliest known instance of a sovereign default, marking the beginning of a long history of nations failing to meet their debt obligations.
Greece's default in 377 BC occurred during a period of intense political and military instability among the Greek city-states. After the Peloponnesian War, major powers like Athens, Sparta, and Thebes were engaged in continual conflict to assert dominance, leading to frequent shifts in alliances and significant financial strain.
Athens, in particular, had borrowed money from its allies and citizens to fund its military campaigns and maintain its naval power. However, as the wars dragged on and Athens' position weakened, it became unable to meet its debt obligations. The city-state simply stopped repaying the loans it had taken, effectively defaulting on its debt.
This default was possible because, unlike modern nation-states, ancient Greek city-states operated in a fragmented political landscape without a centralized authority to enforce debt repayment. The lack of a supranational enforcement mechanism meant that Athens could default with limited immediate repercussions beyond reputational damage and strained relations with creditors.
In essence Greece (specifically Athens) managed to default in 377 BC due to military overextension, financial exhaustion, and the absence of mechanisms to enforce sovereign debt repayment in the ancient world.
Public Debt in Ancient Rome
Unlike modern states, ancient Rome generally avoided public borrowing and did not maintain a standing public debt in the way contemporary governments do. During exceptional circumstances, such as the Punic Wars, Rome did borrow from its citizens through obligatory, but refundable, levies. The Roman government did not issue bonds or take on public debt as a regular fiscal policy, and emperors rarely took on debt, preferring alternatives like increased taxation or currency debasement.
Private Debt and Debt Crises
Rome experienced frequent and severe private debt crises, with both citizens and elites often heavily indebted. The state occasionally intervened in these crises. For example, in 86 BC, amid severe social and economic turmoil, Roman authorities restructured debts, abolishing three-quarters of existing private debts-an exceptional event in Roman history.
Complete debt cancellation (tabulae novae) was often demanded by the populace but was rarely enacted; the 86 BC restructuring stands as the most significant instance, though it fell short of a total default or blanket cancellation.
Tax Arrears and State Obligations
While Rome never enacted a full public debt default, several emperors did write off tax arrears-debts owed to the state treasury-particularly in provinces facing fiscal distress. These acts were more akin to tax relief or amnesty rather than a default on borrowed funds, since Rome’s public finances were not structured around ongoing state borrowing.
In the post-Roman era, the next major sovereign defaults recorded in history are from much later medieval and early modern European states, such as England (defaults before 1600) and France (defaults between 1558 and 1788).
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Some things may sound familiar, and congratulations to Greece for being the first country to default, way back in 377BC. Hungary is also the record holder so far for hyperinflation.
Comments
No Way Out: Stimulus and Money Printing Are the Only Path Left
In 1933, the US government refused to honor their promise to exchange the gold certificates that they issued for "GOLD COIN PAYABLE TO THE BEARER ON DEMAND". I consider this to be the default of an obligation made by the US government.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
War will come before hyper inflation in the US.
One of the things best for economies or economic recovery are wars and natural disasters.
Good example... the New Zealand earthquake 2012/13 led to country pumping money into rebuild.. helped national GDP and currency...
IMHO we will see world war before we see hyper inflation in US
Early default like my neighbors daughter having her car repossessed?
