Hyper-inflations around the world during the 20th century
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A reference from Wikipedia on inflations throughout the past 80-100 hundred years.
Angola
Angola went through its worst inflation from 1991 to 1995. In early 1991, the highest denomination was 50,000 kwanzas. By 1994, it was 500,000 kwanzas. In the 1995 currency reform, 1 kwanza reajustado was exchanged for 1,000 kwanzas. The highest denomination in 1995 was 5,000,000 kwanzas reajustados. In the 1999 currency reform, 1 new kwanza was exchanged for 1,000,000 kwanzas reajustados. The overall impact of hyperinflation: 1 new kwanza = 1,000,000,000 pre 1991 kwanzas.
Argentina
Argentina went through steady inflation from 1975 to 1991. At the beginning of 1975, the highest denomination was 1,000 pesos. In late 1976, the highest denomination was 5,000 pesos. In early 1979, the highest denomination was 10,000 pesos. By the end of 1981, the highest denomination was 1,000,000 pesos. In the 1983 currency reform, 1 Peso argentino was exchanged for 10,000 pesos. In the 1985 currency reform, 1 austral was exchanged for 1,000 pesos argentinos. In the 1992 currency reform, 1 new peso was exchanged for 10,000 australes. The overall impact of hyperinflation: 1 (1992) peso = 100,000,000,000 pre-1983 pesos.
Austria
Between 1921 and 1922, inflation in Austria reached 134%. With the highest banknote in denominations of 500,000 Austro-Hungarian krones.
Belarus
Belarus went through steady inflation from 1994 to 2002. In 1993, the highest denomination was 5,000 rublei. By 1999, it was 5,000,000 rublei. In the 2000 currency reform, the ruble was replaced by the new ruble at an exchange rate of 1 new ruble = 1,000 old rublei. The highest denomination in 2008 was 100,000 rublei, equal to 100,000,000 pre-2000 rublei.
Bolivia
Bolivia went through its worst inflation between 1984 and 1986. Before 1984, the highest denomination was 1,000 pesos bolivianos. By 1985, the highest denomination was 10 Million pesos bolivianos. In 1985, a Bolivian note for 1 million pesos was worth 55 cents in US dollars, one-thousandth of its exchange value of $5,000 less than three years previously.[12] In the 1987 currency reform, the Peso Boliviano was replaced by the Boliviano at a rate of 1,000,000 : 1.
Bosnia-Herzegovina
Bosnia-Hezegovina went through its worst inflation in 1993. In 1992, the highest denomination was 1,000 dinara. By 1993, the highest denomination was 100,000,000 dinara. In the Republika Srpska, the highest denomination was 10,000 dinara in 1992 and 10,000,000,000 dinara in 1993. 50,000,000,000 dinara notes were also printed in 1993 but never issued.
Brazil
From 1986 to 1994, the base currency unit was shifted three times to adjust for inflation in the final years of the Brazilian military dictatorship era. A 1967 cruzeiro was, in 1994, worth less than one trillionth of a US cent, after adjusting for multiple devaluations and note changes. A new currency called real was adopted in 1994, and hyperinflation was eventually brought under control. The real was also the currency in use until 1942; 1 (current) real is the equivalent of 2,750,000,000,000,000,000 of those old reals (called réis in Portuguese).[13]
Bulgaria
During 1996 the Bulgarian economy collapsed due to the BSP's, slow and mismanaged economic reforms, its disastrous agricultural policy, and an unstable and decentralized banking system, which led to an inflation rate of 311% and the collapse of the lev, with an exhange rate $1:Lev reaching 1:3000. When pro-reform forces came into power in the spring 1997, an ambitious economic reform package, including introduction of a currency board regime and pegging the Bulgarian Lev to the German Deutsche Mark (and consequently to the euro), was agreed to with the IMF and the World Bank, and the economy began to stabilize.
Chile
Beginning in 1971, during the presidency of Salvador Allende, Chilean inflation began to rise and reached peaks of 1,200% in 1973. As a result of the hyperinflation, food became scarce and overpriced. A 1973 coup d'état deposed Allende and installed a military government led by Augusto Pinochet. Pinochet's free-market economic policy ended the inflation and except for an economic depression in 1981 the economy has recovered. Overall impact of the inflation: 1 current Chilean Peso = 1,000 Escudos.
China
As the first user of fiat currency, China has had an early history of troubles caused by hyperinflation. The Yuan Dynasty printed huge amounts of fiat paper money to fund their wars, and the resulting hyperinflation, coupled with other factors, led to its demise at the hands of a revolution. The Republic of China went through the worst inflation 1948-49. In 1947, the highest denomination was 50,000 yuan. By mid-1948, the highest denomination was 180,000,000 yuan. The 1948 currency reform replaced the yuan by the gold yuan at an exchange rate of 1 gold yuan = 3,000,000 yuan. In less than 1 year, the highest denomination was 10,000,000 gold yuan. In the final days of the civil war, the Silver Yuan was briefly introduced at the rate of 500,000,000 Gold Yuan. Meanwhile the highest denomination issued by a regional bank was 6,000,000,000 yuan (issued by XinJiang Provincial Bank in 1949). After the renminbi was instituted by the new communist government, hyperinflation ceased with a revaluation of 1:10,000 old Renminbi in 1955.
Free City of Danzig
Danzig went through its worst inflation in 1923. In 1922, the highest denomination was 1,000 Mark. By 1923, the highest denomination was 10,000,000,000 Mark.
Georgia
Georgia went through its worst inflation in 1994. In 1993, the highest denomination was 100,000 coupons [kuponi]. By 1994, the highest denomination was 1,000,000 coupons. In the 1995 currency reform, a new currency lari was introduced with 1 lari exchanged for 1,000,000 coupons.
Germany
Main article: Inflation in the Weimar Republic
Germany went through its worst inflation in 1923. In 1922, the highest denomination was 50,000 Mark. By 1923, the highest denomination was 100,000,000,000,000 Mark. In December 1923 the exchange rate was 4,200,000,000,000 Marks to 1 US dollar.[14] In 1923, the rate of inflation hit 3.25 × 106 percent per month (prices double every two days). Beginning on November 20, 1923, 1,000,000,000,000 old Marks were exchanged for 1 Rentenmark[14] so that 4.2 Rentenmarks were worth 1 US dollar, exactly the same rate the Mark had in 1914.
Greece
Greece went through its worst inflation in 1944. In 1942, the highest denomination was 50,000 drachmai. By 1944, the highest denomination was 100,000,000,000,000 drachmai. In the 1944 currency reform, 1 new drachma was exchanged for 50,000,000,000 drachmai. Another currency reform in 1953 replaced the drachma at an exchange rate of 1 new drachma = 1,000 old drachmai. The overall impact of hyperinflation: 1 (1953) drachma = 50,000,000,000,000 pre 1944 drachmai. The Greek monthly inflation rate reached 8.5 billion percent in October 1944.
Sweeping up the banknotes from the street after the Hungarian pengo was replaced in 1946Hungary
Hungary went through the worst inflation ever between the end of 1945 and July 1946. In 1944, the highest denomination was 1,000 pengõ. By the end of 1945, it was 10,000,000 pengõ. The highest denomination in mid-1946 was 100,000,000,000,000,000,000 pengõ. A special currency the adópengõ - or tax pengõ - was created for tax and postal payments [1]. The value of the adópengõ was adjusted each day, by radio announcement. On January 1, 1946 one adópengõ equaled one pengõ. By late July, one adópengõ equaled 2,000,000,000,000,000,000,000 or 2×1021pengõ. When the pengo was replaced in August 1946 by the forint, the total value of all Hungarian banknotes in circulation amounted to one-thousandth of one US dollar. [15] It is the most severe known incident of inflation recorded, peaking at 1.3 × 1016 percent per month (prices double every 15 hours) [16] . The overall impact of hyperinflation: On 18 August, 1946 400,000,000,000,000,000,000,000,000,000 or 4 × 1029 (four hundred octillion [ short scale ] ) pengõ became 1 forint.
One source [2] states that this hyperinflation was purposely started by trained Russian Marxists in order to destroy the Hungarian middle and upper classes. The 1946 currency reform changed the currency to forint. Previously, between 1922 and 1924 inflation in Hungary reached 98%.
Israel
Inflation accelerated in the 1970s, rising steadily from 13% in 1971 to 111% in 1979. From 133% in 1980, it leaped to 191% in 1983 and then to 445% in 1984, threatening to become a four-digit figure within a year or two. In 1985 Israel froze all prices by law. That same year, inflation more than halved, to 185%. Within a few months, the authorities began to lift the price freeze on some items; in other cases it took almost a year. By 1986, inflation was down to 19%.
Japan
After WW II, Japan went through the highest denomination at that time, which was a 75,000,000,000 Yen bank cheque. The Japan wholesale price index (relative to 1 as the average of 1930) shot up to 16.3 in 1943, 127.9 in 1948 and 342.5 in 1951. In the early 1950s, after achieving independence from USA, Japan controlled its own money. Through its rapidly growing export trade, Japan stabilized the Yen quickly.
Krajina
Krajina went through the worst inflation in 1993. In 1992, the highest denomination was 50,000 dinara. By 1993, the highest denomination was 50,000,000,000 dinara. Note that this unrecognized country was reincorporated into Croatia in 1998.
Madagascar
The Malagasy franc had a turbulent time in 2004, losing nearly half its value and sparking rampant inflation. On 1 January 2005 the Malagasy ariary replaced the previous currency at a rate of one ariary for five Malagsy francs. In May 2005 there were riots over rising inflation, although falling prices have since calmed the situation.
Mozambique
Mozambique was one of the world's poorest countries when it became independent in 1975. Mismanagement and a brutal civil war from 1977-92 led to continued inflation. The highest denomination in 1976 was 100 meticals. By 2004, it was 500,000 meticals. In the 2006 currency reform, 1 new metical was exchanged for 1,000 old meticals.
Nicaragua
Nicaragua went through the worst inflation from 1987 to 1990. From 1943 to April 1971, one US dollar equalled 7 córdobas. From April 1971 to early 1978, one US dollar was worth 10 córdobas. In early 1986, the highest denomination was 10,000 córdobas. By 1987, it was 1,000,000 córdobas. In the 1988 currency reform, 1 new córdoba was exchanged for 10,000 old córdobas. The highest denomination in 1990 was 100,000,000 new córdobas. In the 1991 currency reform, 1 new córdoba was exchanged for 5,000,000 old córdobas. The overall impact of hyperinflation: 1 (1991) córdoba = 50,000,000,000 pre-1988 córdobas.
Peru
Peru went through its worst inflation from 1988 to 1990. In the 1985 currency reform, 1 inti was exchanged for 1,000 soles. In 1986, the highest denomination was 1,000 intis. But in September 1988, monthly inflation went to 132%. In August 1990, monthly inflation was 397%. The highest denomination was 10,000,000 intis by 1991. In the 1991 currency reform, 1 nuevo sol was exchanged for 1,000,000 intis. The overall impact of hyperinflation: 1 nuevo sol = 1,000,000,000 (old) soles.
Philippines
The Japanese government occupying the Philippines during the World War II issued fiat currencies for general circulation. The Japanese-sponsored Second Philippine Republic government led by Jose P. Laurel at the same time outlawed possession of other currencies, most especially "guerilla money." The fiat money was dubbed "Mickey Mouse Money" because it is similar to play money and is next to worthless. Survivors of the war often tell tales of bringing suitcase or bayong (native bags made of woven coconut or buri leaf strips) overflowing with Japanese-issued bills. In the early times, 75 Mickey Mouse pesos could buy one duck egg[17]. In 1944, a box of matches cost more than 100 Mickey Mouse pesos.[18].
In 1942, the highest denomination available was 10 pesos. Before the end of the war, because of inflation, the Japanese government was forced to issue 100, 500 and 1000 peso notes.
Poland
Poland went through inflation (second time) between 1989 and 1991. The highest denomination in 1989 was 200,000 zlotych. It was 1,000,000 zlotych in 1991 and 2,000,000 zlotych in 1992; the exchange rate was 9500 zlotych for 1 US dollar in January 1990 and 19600 zlotych at the end of August 1992. In the 1994 currency reform, 1 new zloty was exchanged for 10,000 old zlotych and 1 US$ exchange rate was ca. 2.5 zlotych (new).
Previously, between 1922 and 1924, Polish inflation reached 275% and exchange rate in 1923 was 6,375,000 Polish marka (mkp) for 1 US dollar (before the inflation there was only 9 mkp for 1US$ in 1918), and the highest denomination was 10,000,000 mkp. In the 1924 currency reform there was new currency introduced: 1 zloty = 1,800,000 mkp.
Republika Srpska
Republika Srpska was the breakaway region of Bosnia. As with Krajina, it pegged its currency, the Republika Srpska dinar, to that of Yugoslavia. Their bills were almost the same as Krajina's, but they issued fewer and didn't issue currency after 1993.
Romania
Romania is still working through steady inflation. The highest denomination in 1998 was 100,000 lei. By 2000 it was 500,000 lei. In early 2005 it was 1,000,000 lei. In July 2005 the leu was replaced by the new leu at 10,000 old lei = 1 new leu. Inflation in 2005 was 9%. In 2006 the highest denomination is 500 lei (= 5,000,000 old lei).
Russian Federation
Between 1921 and 1922 inflation in Soviet Russia reached 213%.
In 1992, the first year of post-Soviet economic reform, inflation was 2,520%, the major cause being the decontrol of most prices in January. In 1993 the annual rate was 840%, and in 1994, 224%. The ruble devalued from about 40 r/$ in 1991 to about 30,000 r/$ in 1999.
Turkey
Throughout the 1990s Turkey dealt with severe inflation rates that finally crippled the economy into a recession in 2001. The highest denomination in 1995 was 1,000,000 lira. By 2005 it was 20,000,000 lira. Recently Turkey has achieved single digit inflation for the first time in decades, and in the 2005 currency reform, introduced the New Turkish Lira; 1 was exchanged for 1,000,000 old lira.
Ukraine
Ukraine went through its worst inflation between 1993 and 1995. In 1992, the Ukrainian karbovanets was introduced, which was exchanged with the defunct Soviet ruble at a rate of 1 UAK = 1 SUR. Before 1993, the highest denomination was 1,000 karbovantsiv. By 1995, it was 1,000,000 karbovantsiv. In 1996, during the transition to the Hryvnya and the subsequent phase out of the karbovanets, the exchange rate was 100,000 UAK = 1 UAH. This translates to a hyperinflation rate of approximately 1,400% per month. And to this day Ukraine holds the world record for most inflation in one calendar year, which was set in 1993. [19]
United States
During the Revolutionary War, the Continental Congress authorized the printing of paper currency called continental currency. The easily counterfeited notes depreciated rapidly, giving rise to the expression "not worth a continental."
Between January 1861 and April 1865, the Lerner Commodity Price Index of leading cities in the eastern Confederacy states increased from 100 to over 9000.[20] As the U.S. Civil War dragged on the Confederate States of America dollar had less and less value, until it was almost worthless by the last few months of the war.
Yugoslavia 500 billion Dinar bank noteYugoslavia
Yugoslavia went through a period of hyperinflation and subsequent currency reforms from 1989 to 1994. The highest denomination in 1988 was 50,000 dinars. By 1989 it was 2,000,000 dinars. In the 1990 currency reform, 1 new dinar was exchanged for 10,000 old dinars. In the 1992 currency reform, 1 new dinar was exchanged for 10 old dinars. The highest denomination in 1992 was 50,000 dinars. By 1993, it was 10,000,000,000 dinars. In the 1993 currency reform, 1 new dinar was exchanged for 1,000,000 old dinars. But before the year was over, the highest denomination was 500,000,000,000 dinars. In the 1994 currency reform, 1 new dinar was exchanged for 1,000,000,000 old dinars. In another currency reform a month later, 1 novi dinar was exchanged for 13 million dinars (1 novi dinar = 1 German mark at the time of exchange). The overall impact of hyperinflation: 1 novi dinar = 1 × 1027~1.3 × 1027 pre 1990 dinars. Yugoslavia's rate of inflation hit 5 × 1015 percent cumalative inflation over the time period 1 October 1993 and 24 January 1994.
Zaire (now the Democratic Republic of the Congo)
Zaire went through a period of inflation between 1989 and 1996. In 1988, the highest denomination was 5,000 zaires. By 1992, it was 5,000,000 zaires. In the 1993 currency reform, 1 nouveau zaire was exchanged for 3,000,000 old zaires. The highest denomination in 1996 was 1,000,000 nouveaux zaires. In 1997, Zaire was renamed the Congo Democratic Republic and changed its currency to francs. 1 franc was exchanged for 100,000 nouveaux zaires. The overall impact of hyperinflation: 1 franc = 3 × 1011 pre 1989 zaires.
Zimbabwe
Main article: Hyperinflation in Zimbabwe
The 100 trillion Zimbabwean dollar banknote (1014 dollars), equal to 1027 pre-2006 dollarsThe 1,000 Zimbabwe dollar note was so worthless that it was used as toilet paper.[21]
At Independence in 1980, the Zimbabwe dollar was worth about USD 1.25. Since then, rampant inflation and the collapse of the economy have severely devalued the currency, causing many organisations to favour using the US dollar or South African rand instead. Inflation was stable until Robert Mugabe began a program of land reforms that primarily focused on taking land from white farmers and redistributing those properties and assets to black farmers; this in turn sent food production and revenues from export of food plummeting.[22][23][24] Though inflation in Zimbabwe was a monetary phenomena (the result of Mugabe's government printing money) as can be seen by the appearance of ever higher face value printed notes (whose face value exceeded the sum of all previously existing notes).
Early in the 21st century Zimbabwe started to experience chronic inflation. Inflation reached 624% in 2004, then fell back to low triple digits before surging to a new high of 1,730% in 2006. During that time, the Reserve Bank of Zimbabwe revalued their currency on August 1, 2006 at a rate of 1,000 old Zimbabwean dollars to 1 revalued Zimbabwean dollar. In June 2007, inflation in Zimbabwe had risen to 11,000% year-to-year from an earlier estimate of 9,000%. On May 5th, 2008 the Reserve Bank of Zimbabwe issued bank notes or "bearer cheques" for the value of ZWD 100 million and ZWD 250 million.[25]. Ten days later on May 15th, new bearer cheques with a value of ZWD 500 million (then equivalent to about USD 2.5) were issued [26]. Five days later on May 20th, a new series of notes in the form of "agro cheques" were issued in denominations of ZWD 5 billion, ZWD 25 billion and ZWD 50 billion. An addition agro cheque was issued for ZWD 100 billion on July 21st. [27] Meanwhile inflation has officially surged to 2,200,000% [28] with some analysts estimating figures surpassing 9,000,000 percent [29]. As of July 22nd, 2008, the value of the ZWD had fallen to approximately 688 billion per 1 USD, or 688 trillion pre-August 2006 Zimbabwean dollars. [30] On August 1, 2008, the Zimbabwe dollar was redenominated by removing 10 zeroes. ZWD 10 billion became 1 dollar after the redenomination. [31]. On August 19, 2008, official figures announced for June estimated the inflation over 11,250,000 percent [32] Zimbabwe's annual inflation was 231,000,000% in July. [33] (Prices doubling every 17.3 days). At the beginning of November, 2008, the inflation rate was calculated to be at 516 quintillion percent (516,000,000,000,000,000,000%). The monthly inflation was 13.2 billion percent.[34]
Zimbabwe hyperinflation approached post Second World War Hungary's hyperinflation (Hungary: 12.95 quadrillion percent per month (195% daily), ie. prices doubling every 15.6 hours. Zimbabwe: 79.6 billion percent per month (98.0%), ie. prices doubling every 24.7 hours[35]). [16]On January 16, 2009, Zimbabwe issued a $100 trillion bill.[36]
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Angola
Angola went through its worst inflation from 1991 to 1995. In early 1991, the highest denomination was 50,000 kwanzas. By 1994, it was 500,000 kwanzas. In the 1995 currency reform, 1 kwanza reajustado was exchanged for 1,000 kwanzas. The highest denomination in 1995 was 5,000,000 kwanzas reajustados. In the 1999 currency reform, 1 new kwanza was exchanged for 1,000,000 kwanzas reajustados. The overall impact of hyperinflation: 1 new kwanza = 1,000,000,000 pre 1991 kwanzas.
Argentina
Argentina went through steady inflation from 1975 to 1991. At the beginning of 1975, the highest denomination was 1,000 pesos. In late 1976, the highest denomination was 5,000 pesos. In early 1979, the highest denomination was 10,000 pesos. By the end of 1981, the highest denomination was 1,000,000 pesos. In the 1983 currency reform, 1 Peso argentino was exchanged for 10,000 pesos. In the 1985 currency reform, 1 austral was exchanged for 1,000 pesos argentinos. In the 1992 currency reform, 1 new peso was exchanged for 10,000 australes. The overall impact of hyperinflation: 1 (1992) peso = 100,000,000,000 pre-1983 pesos.
Austria
Between 1921 and 1922, inflation in Austria reached 134%. With the highest banknote in denominations of 500,000 Austro-Hungarian krones.
Belarus
Belarus went through steady inflation from 1994 to 2002. In 1993, the highest denomination was 5,000 rublei. By 1999, it was 5,000,000 rublei. In the 2000 currency reform, the ruble was replaced by the new ruble at an exchange rate of 1 new ruble = 1,000 old rublei. The highest denomination in 2008 was 100,000 rublei, equal to 100,000,000 pre-2000 rublei.
Bolivia
Bolivia went through its worst inflation between 1984 and 1986. Before 1984, the highest denomination was 1,000 pesos bolivianos. By 1985, the highest denomination was 10 Million pesos bolivianos. In 1985, a Bolivian note for 1 million pesos was worth 55 cents in US dollars, one-thousandth of its exchange value of $5,000 less than three years previously.[12] In the 1987 currency reform, the Peso Boliviano was replaced by the Boliviano at a rate of 1,000,000 : 1.
Bosnia-Herzegovina
Bosnia-Hezegovina went through its worst inflation in 1993. In 1992, the highest denomination was 1,000 dinara. By 1993, the highest denomination was 100,000,000 dinara. In the Republika Srpska, the highest denomination was 10,000 dinara in 1992 and 10,000,000,000 dinara in 1993. 50,000,000,000 dinara notes were also printed in 1993 but never issued.
Brazil
From 1986 to 1994, the base currency unit was shifted three times to adjust for inflation in the final years of the Brazilian military dictatorship era. A 1967 cruzeiro was, in 1994, worth less than one trillionth of a US cent, after adjusting for multiple devaluations and note changes. A new currency called real was adopted in 1994, and hyperinflation was eventually brought under control. The real was also the currency in use until 1942; 1 (current) real is the equivalent of 2,750,000,000,000,000,000 of those old reals (called réis in Portuguese).[13]
Bulgaria
During 1996 the Bulgarian economy collapsed due to the BSP's, slow and mismanaged economic reforms, its disastrous agricultural policy, and an unstable and decentralized banking system, which led to an inflation rate of 311% and the collapse of the lev, with an exhange rate $1:Lev reaching 1:3000. When pro-reform forces came into power in the spring 1997, an ambitious economic reform package, including introduction of a currency board regime and pegging the Bulgarian Lev to the German Deutsche Mark (and consequently to the euro), was agreed to with the IMF and the World Bank, and the economy began to stabilize.
Chile
Beginning in 1971, during the presidency of Salvador Allende, Chilean inflation began to rise and reached peaks of 1,200% in 1973. As a result of the hyperinflation, food became scarce and overpriced. A 1973 coup d'état deposed Allende and installed a military government led by Augusto Pinochet. Pinochet's free-market economic policy ended the inflation and except for an economic depression in 1981 the economy has recovered. Overall impact of the inflation: 1 current Chilean Peso = 1,000 Escudos.
China
As the first user of fiat currency, China has had an early history of troubles caused by hyperinflation. The Yuan Dynasty printed huge amounts of fiat paper money to fund their wars, and the resulting hyperinflation, coupled with other factors, led to its demise at the hands of a revolution. The Republic of China went through the worst inflation 1948-49. In 1947, the highest denomination was 50,000 yuan. By mid-1948, the highest denomination was 180,000,000 yuan. The 1948 currency reform replaced the yuan by the gold yuan at an exchange rate of 1 gold yuan = 3,000,000 yuan. In less than 1 year, the highest denomination was 10,000,000 gold yuan. In the final days of the civil war, the Silver Yuan was briefly introduced at the rate of 500,000,000 Gold Yuan. Meanwhile the highest denomination issued by a regional bank was 6,000,000,000 yuan (issued by XinJiang Provincial Bank in 1949). After the renminbi was instituted by the new communist government, hyperinflation ceased with a revaluation of 1:10,000 old Renminbi in 1955.
Free City of Danzig
Danzig went through its worst inflation in 1923. In 1922, the highest denomination was 1,000 Mark. By 1923, the highest denomination was 10,000,000,000 Mark.
Georgia
Georgia went through its worst inflation in 1994. In 1993, the highest denomination was 100,000 coupons [kuponi]. By 1994, the highest denomination was 1,000,000 coupons. In the 1995 currency reform, a new currency lari was introduced with 1 lari exchanged for 1,000,000 coupons.
Germany
Main article: Inflation in the Weimar Republic
Germany went through its worst inflation in 1923. In 1922, the highest denomination was 50,000 Mark. By 1923, the highest denomination was 100,000,000,000,000 Mark. In December 1923 the exchange rate was 4,200,000,000,000 Marks to 1 US dollar.[14] In 1923, the rate of inflation hit 3.25 × 106 percent per month (prices double every two days). Beginning on November 20, 1923, 1,000,000,000,000 old Marks were exchanged for 1 Rentenmark[14] so that 4.2 Rentenmarks were worth 1 US dollar, exactly the same rate the Mark had in 1914.
Greece
Greece went through its worst inflation in 1944. In 1942, the highest denomination was 50,000 drachmai. By 1944, the highest denomination was 100,000,000,000,000 drachmai. In the 1944 currency reform, 1 new drachma was exchanged for 50,000,000,000 drachmai. Another currency reform in 1953 replaced the drachma at an exchange rate of 1 new drachma = 1,000 old drachmai. The overall impact of hyperinflation: 1 (1953) drachma = 50,000,000,000,000 pre 1944 drachmai. The Greek monthly inflation rate reached 8.5 billion percent in October 1944.
Sweeping up the banknotes from the street after the Hungarian pengo was replaced in 1946Hungary
Hungary went through the worst inflation ever between the end of 1945 and July 1946. In 1944, the highest denomination was 1,000 pengõ. By the end of 1945, it was 10,000,000 pengõ. The highest denomination in mid-1946 was 100,000,000,000,000,000,000 pengõ. A special currency the adópengõ - or tax pengõ - was created for tax and postal payments [1]. The value of the adópengõ was adjusted each day, by radio announcement. On January 1, 1946 one adópengõ equaled one pengõ. By late July, one adópengõ equaled 2,000,000,000,000,000,000,000 or 2×1021pengõ. When the pengo was replaced in August 1946 by the forint, the total value of all Hungarian banknotes in circulation amounted to one-thousandth of one US dollar. [15] It is the most severe known incident of inflation recorded, peaking at 1.3 × 1016 percent per month (prices double every 15 hours) [16] . The overall impact of hyperinflation: On 18 August, 1946 400,000,000,000,000,000,000,000,000,000 or 4 × 1029 (four hundred octillion [ short scale ] ) pengõ became 1 forint.
One source [2] states that this hyperinflation was purposely started by trained Russian Marxists in order to destroy the Hungarian middle and upper classes. The 1946 currency reform changed the currency to forint. Previously, between 1922 and 1924 inflation in Hungary reached 98%.
Israel
Inflation accelerated in the 1970s, rising steadily from 13% in 1971 to 111% in 1979. From 133% in 1980, it leaped to 191% in 1983 and then to 445% in 1984, threatening to become a four-digit figure within a year or two. In 1985 Israel froze all prices by law. That same year, inflation more than halved, to 185%. Within a few months, the authorities began to lift the price freeze on some items; in other cases it took almost a year. By 1986, inflation was down to 19%.
Japan
After WW II, Japan went through the highest denomination at that time, which was a 75,000,000,000 Yen bank cheque. The Japan wholesale price index (relative to 1 as the average of 1930) shot up to 16.3 in 1943, 127.9 in 1948 and 342.5 in 1951. In the early 1950s, after achieving independence from USA, Japan controlled its own money. Through its rapidly growing export trade, Japan stabilized the Yen quickly.
Krajina
Krajina went through the worst inflation in 1993. In 1992, the highest denomination was 50,000 dinara. By 1993, the highest denomination was 50,000,000,000 dinara. Note that this unrecognized country was reincorporated into Croatia in 1998.
Madagascar
The Malagasy franc had a turbulent time in 2004, losing nearly half its value and sparking rampant inflation. On 1 January 2005 the Malagasy ariary replaced the previous currency at a rate of one ariary for five Malagsy francs. In May 2005 there were riots over rising inflation, although falling prices have since calmed the situation.
Mozambique
Mozambique was one of the world's poorest countries when it became independent in 1975. Mismanagement and a brutal civil war from 1977-92 led to continued inflation. The highest denomination in 1976 was 100 meticals. By 2004, it was 500,000 meticals. In the 2006 currency reform, 1 new metical was exchanged for 1,000 old meticals.
Nicaragua
Nicaragua went through the worst inflation from 1987 to 1990. From 1943 to April 1971, one US dollar equalled 7 córdobas. From April 1971 to early 1978, one US dollar was worth 10 córdobas. In early 1986, the highest denomination was 10,000 córdobas. By 1987, it was 1,000,000 córdobas. In the 1988 currency reform, 1 new córdoba was exchanged for 10,000 old córdobas. The highest denomination in 1990 was 100,000,000 new córdobas. In the 1991 currency reform, 1 new córdoba was exchanged for 5,000,000 old córdobas. The overall impact of hyperinflation: 1 (1991) córdoba = 50,000,000,000 pre-1988 córdobas.
Peru
Peru went through its worst inflation from 1988 to 1990. In the 1985 currency reform, 1 inti was exchanged for 1,000 soles. In 1986, the highest denomination was 1,000 intis. But in September 1988, monthly inflation went to 132%. In August 1990, monthly inflation was 397%. The highest denomination was 10,000,000 intis by 1991. In the 1991 currency reform, 1 nuevo sol was exchanged for 1,000,000 intis. The overall impact of hyperinflation: 1 nuevo sol = 1,000,000,000 (old) soles.
Philippines
The Japanese government occupying the Philippines during the World War II issued fiat currencies for general circulation. The Japanese-sponsored Second Philippine Republic government led by Jose P. Laurel at the same time outlawed possession of other currencies, most especially "guerilla money." The fiat money was dubbed "Mickey Mouse Money" because it is similar to play money and is next to worthless. Survivors of the war often tell tales of bringing suitcase or bayong (native bags made of woven coconut or buri leaf strips) overflowing with Japanese-issued bills. In the early times, 75 Mickey Mouse pesos could buy one duck egg[17]. In 1944, a box of matches cost more than 100 Mickey Mouse pesos.[18].
In 1942, the highest denomination available was 10 pesos. Before the end of the war, because of inflation, the Japanese government was forced to issue 100, 500 and 1000 peso notes.
Poland
Poland went through inflation (second time) between 1989 and 1991. The highest denomination in 1989 was 200,000 zlotych. It was 1,000,000 zlotych in 1991 and 2,000,000 zlotych in 1992; the exchange rate was 9500 zlotych for 1 US dollar in January 1990 and 19600 zlotych at the end of August 1992. In the 1994 currency reform, 1 new zloty was exchanged for 10,000 old zlotych and 1 US$ exchange rate was ca. 2.5 zlotych (new).
Previously, between 1922 and 1924, Polish inflation reached 275% and exchange rate in 1923 was 6,375,000 Polish marka (mkp) for 1 US dollar (before the inflation there was only 9 mkp for 1US$ in 1918), and the highest denomination was 10,000,000 mkp. In the 1924 currency reform there was new currency introduced: 1 zloty = 1,800,000 mkp.
Republika Srpska
Republika Srpska was the breakaway region of Bosnia. As with Krajina, it pegged its currency, the Republika Srpska dinar, to that of Yugoslavia. Their bills were almost the same as Krajina's, but they issued fewer and didn't issue currency after 1993.
Romania
Romania is still working through steady inflation. The highest denomination in 1998 was 100,000 lei. By 2000 it was 500,000 lei. In early 2005 it was 1,000,000 lei. In July 2005 the leu was replaced by the new leu at 10,000 old lei = 1 new leu. Inflation in 2005 was 9%. In 2006 the highest denomination is 500 lei (= 5,000,000 old lei).
Russian Federation
Between 1921 and 1922 inflation in Soviet Russia reached 213%.
In 1992, the first year of post-Soviet economic reform, inflation was 2,520%, the major cause being the decontrol of most prices in January. In 1993 the annual rate was 840%, and in 1994, 224%. The ruble devalued from about 40 r/$ in 1991 to about 30,000 r/$ in 1999.
Turkey
Throughout the 1990s Turkey dealt with severe inflation rates that finally crippled the economy into a recession in 2001. The highest denomination in 1995 was 1,000,000 lira. By 2005 it was 20,000,000 lira. Recently Turkey has achieved single digit inflation for the first time in decades, and in the 2005 currency reform, introduced the New Turkish Lira; 1 was exchanged for 1,000,000 old lira.
Ukraine
Ukraine went through its worst inflation between 1993 and 1995. In 1992, the Ukrainian karbovanets was introduced, which was exchanged with the defunct Soviet ruble at a rate of 1 UAK = 1 SUR. Before 1993, the highest denomination was 1,000 karbovantsiv. By 1995, it was 1,000,000 karbovantsiv. In 1996, during the transition to the Hryvnya and the subsequent phase out of the karbovanets, the exchange rate was 100,000 UAK = 1 UAH. This translates to a hyperinflation rate of approximately 1,400% per month. And to this day Ukraine holds the world record for most inflation in one calendar year, which was set in 1993. [19]
United States
During the Revolutionary War, the Continental Congress authorized the printing of paper currency called continental currency. The easily counterfeited notes depreciated rapidly, giving rise to the expression "not worth a continental."
Between January 1861 and April 1865, the Lerner Commodity Price Index of leading cities in the eastern Confederacy states increased from 100 to over 9000.[20] As the U.S. Civil War dragged on the Confederate States of America dollar had less and less value, until it was almost worthless by the last few months of the war.
Yugoslavia 500 billion Dinar bank noteYugoslavia
Yugoslavia went through a period of hyperinflation and subsequent currency reforms from 1989 to 1994. The highest denomination in 1988 was 50,000 dinars. By 1989 it was 2,000,000 dinars. In the 1990 currency reform, 1 new dinar was exchanged for 10,000 old dinars. In the 1992 currency reform, 1 new dinar was exchanged for 10 old dinars. The highest denomination in 1992 was 50,000 dinars. By 1993, it was 10,000,000,000 dinars. In the 1993 currency reform, 1 new dinar was exchanged for 1,000,000 old dinars. But before the year was over, the highest denomination was 500,000,000,000 dinars. In the 1994 currency reform, 1 new dinar was exchanged for 1,000,000,000 old dinars. In another currency reform a month later, 1 novi dinar was exchanged for 13 million dinars (1 novi dinar = 1 German mark at the time of exchange). The overall impact of hyperinflation: 1 novi dinar = 1 × 1027~1.3 × 1027 pre 1990 dinars. Yugoslavia's rate of inflation hit 5 × 1015 percent cumalative inflation over the time period 1 October 1993 and 24 January 1994.
Zaire (now the Democratic Republic of the Congo)
Zaire went through a period of inflation between 1989 and 1996. In 1988, the highest denomination was 5,000 zaires. By 1992, it was 5,000,000 zaires. In the 1993 currency reform, 1 nouveau zaire was exchanged for 3,000,000 old zaires. The highest denomination in 1996 was 1,000,000 nouveaux zaires. In 1997, Zaire was renamed the Congo Democratic Republic and changed its currency to francs. 1 franc was exchanged for 100,000 nouveaux zaires. The overall impact of hyperinflation: 1 franc = 3 × 1011 pre 1989 zaires.
Zimbabwe
Main article: Hyperinflation in Zimbabwe
The 100 trillion Zimbabwean dollar banknote (1014 dollars), equal to 1027 pre-2006 dollarsThe 1,000 Zimbabwe dollar note was so worthless that it was used as toilet paper.[21]
At Independence in 1980, the Zimbabwe dollar was worth about USD 1.25. Since then, rampant inflation and the collapse of the economy have severely devalued the currency, causing many organisations to favour using the US dollar or South African rand instead. Inflation was stable until Robert Mugabe began a program of land reforms that primarily focused on taking land from white farmers and redistributing those properties and assets to black farmers; this in turn sent food production and revenues from export of food plummeting.[22][23][24] Though inflation in Zimbabwe was a monetary phenomena (the result of Mugabe's government printing money) as can be seen by the appearance of ever higher face value printed notes (whose face value exceeded the sum of all previously existing notes).
Early in the 21st century Zimbabwe started to experience chronic inflation. Inflation reached 624% in 2004, then fell back to low triple digits before surging to a new high of 1,730% in 2006. During that time, the Reserve Bank of Zimbabwe revalued their currency on August 1, 2006 at a rate of 1,000 old Zimbabwean dollars to 1 revalued Zimbabwean dollar. In June 2007, inflation in Zimbabwe had risen to 11,000% year-to-year from an earlier estimate of 9,000%. On May 5th, 2008 the Reserve Bank of Zimbabwe issued bank notes or "bearer cheques" for the value of ZWD 100 million and ZWD 250 million.[25]. Ten days later on May 15th, new bearer cheques with a value of ZWD 500 million (then equivalent to about USD 2.5) were issued [26]. Five days later on May 20th, a new series of notes in the form of "agro cheques" were issued in denominations of ZWD 5 billion, ZWD 25 billion and ZWD 50 billion. An addition agro cheque was issued for ZWD 100 billion on July 21st. [27] Meanwhile inflation has officially surged to 2,200,000% [28] with some analysts estimating figures surpassing 9,000,000 percent [29]. As of July 22nd, 2008, the value of the ZWD had fallen to approximately 688 billion per 1 USD, or 688 trillion pre-August 2006 Zimbabwean dollars. [30] On August 1, 2008, the Zimbabwe dollar was redenominated by removing 10 zeroes. ZWD 10 billion became 1 dollar after the redenomination. [31]. On August 19, 2008, official figures announced for June estimated the inflation over 11,250,000 percent [32] Zimbabwe's annual inflation was 231,000,000% in July. [33] (Prices doubling every 17.3 days). At the beginning of November, 2008, the inflation rate was calculated to be at 516 quintillion percent (516,000,000,000,000,000,000%). The monthly inflation was 13.2 billion percent.[34]
Zimbabwe hyperinflation approached post Second World War Hungary's hyperinflation (Hungary: 12.95 quadrillion percent per month (195% daily), ie. prices doubling every 15.6 hours. Zimbabwe: 79.6 billion percent per month (98.0%), ie. prices doubling every 24.7 hours[35]). [16]On January 16, 2009, Zimbabwe issued a $100 trillion bill.[36]
roadrunner
0
Comments
I knew it would happen.
The Swiss franc was part of the old LMU system in the latter part of the 19th century - and remains the one currency that actually is worth more vs. the dollar than it was then. The old LMU currencies traded at US 20 cents, now the Swiss Franc is about 81 cents per.
Ok, enough joking. Back to playing with my PMs
Does a car in Argentina cost 100 billion times more?
Knowledge is the enemy of fear
<< <i>So, what kind of scenario does anyone see for the hyperinflation of the U. S. dollar? I'm sure that there are several different schools of thought out there.... >>
Harry Schultz is quoted over at Market Watch (the forum filter doesn't let me link that site here) a search will turn up the Peter Brimelow article titled "Schultz poised between inflation and deflation" dated April 13, 2009.
>>
On the big picture, Schultz says: "Suddenly, everyone is uptight and lining up on the destiny side of either hyperinflation or deflation. Both are right, but in what order?" His analysis: "There's no doubt in my mind we're experiencing deflation now, as money is disappearing from sight. ... There are deflationary bear markets in houses, cars, corporate bonds, junk bonds, GDPs, stocks in the Third World, etc. ...
Schultz goes on: "Eventually, we'll without doubt reverse gears and zip into inflation, maybe even Weimar-style. That will depend if governments display a continued disregard for controlling inflation and keep on printing massively, and if banks stop hoarding cash ...
>>
So the short answer to the question is: massive government money printing, and a disregard for controlling inflation by the central bank. Part one seems likely, part two, not so much right at this moment. For warning signs, watch the bond market, the biggest market of them all. If long term interest rates go back above 10% like they once were, that will be a warning bell. Right now, folks are lending money at 4% to 5% for 30 years. If even average inflation comes during that period, they lenders will lose.
What does it mean? Ok, you asked, Cohodk. It means that the government is now going to pick the winners and losers, based on politics, instead of the market picking the winners and losers, based on smarts, hard work and actual demand. Yeah, that means shortages - whether or not it means 1950's Soviet-style shortages is anyone's guess.
It also means that the bankers will be fighting with the government bureaucrats for predominance. The only sure losers will be the people who pay for all of this, and it may become very difficult to avoid being included in that group.
I knew it would happen.
Keep in mind, if the US has hyperinflation, so will the rest of the world.
I still dont see much possibility of hyperinflation as we and the world have too much manufacturing capacity. Jobs are not coming back here or anywhere else. Demand for goods and services will be stagnant. This will be unlike the 70's when we had supplies problems. Today we have demand problems.
Knowledge is the enemy of fear
roadrunner
The Dutch had their tulip mania in the 1630's where a single prized tulip could by a nice house.
The French ended with the worthless Assignat, "let them eat cake", and the guillotine.
The English may have not had the reserve currency at the time but they were probably near the top when the 1720's South Sea Bubble and Johnathan Law were making waves. The English lost the handle trying to finance WW1 and slowly gave up control to the US. I don't know to what levels they inflated but there was plenty to go around in the 1914-1919 period.
Not sure if Portugal or Spain had issues with their currencies but they failed for a reason.
roadrunner
<< <i>I still dont see much possibility of hyperinflation as we and the world have too much manufacturing capacity. Jobs are not coming back here or anywhere else. Demand for goods and services will be stagnant. This will be unlike the 70's when we had supplies problems. Today we have demand problems. >>
The manufacturing capacity will disappear very quickly (or become irrelevant) when hyper-inflation hits. Think about it. Lending and credit lines will come to a complete halt as how much interest can you charge if inflation is 30, 40, 50% or more? Only a fool would lend money in that environment. Credit dries up, wages can no longer be paid, supplies no longer available, and factories, farms, etc. shut down without credit. Goods vanish from store shelves as people rush to convert decaying currency to physical assets.
<< <i>
<< <i>I still dont see much possibility of hyperinflation as we and the world have too much manufacturing capacity. Jobs are not coming back here or anywhere else. Demand for goods and services will be stagnant. This will be unlike the 70's when we had supplies problems. Today we have demand problems. >>
The manufacturing capacity will disappear very quickly (or become irrelevant) when hyper-inflation hits. Think about it. Lending and credit lines will come to a complete halt as how much interest can you charge if inflation is 30, 40, 50% or more? Only a fool would lend money in that environment. Credit dries up, wages can no longer be paid, supplies no longer available, and factories, farms, etc. shut down without credit. Goods vanish from store shelves as people rush to convert decaying currency to physical assets. >>
If people dont get paid and have no available credit lines, prices for all goods and services will collapse. It is happening now. The Govt would have to implement price controls and basically take over the food distribution channels as the entire system shuts down.
Inflation can not exist if there is no demand. Your example eliminates any chance of demand if factories are shuttered, wages go unpaid, and credit lines eliminated.
You will have a MUCH better chance of seeing your hyperinflation if we have a massive global war. Look at the examples Roadrunner listed.......Angola--civil war, Austria, Germany--just after WW1, the Eastern Bloc countries--emerging from 45 years of communist destruction, Japan just after WW2, the Aftrican countries---in a constant state of civil war.
So if you want hyperinflaion then you had better hope for WW3.
Knowledge is the enemy of fear
<< <i>
<< <i>
<< <i>I still dont see much possibility of hyperinflation as we and the world have too much manufacturing capacity. Jobs are not coming back here or anywhere else. Demand for goods and services will be stagnant. This will be unlike the 70's when we had supplies problems. Today we have demand problems. >>
The manufacturing capacity will disappear very quickly (or become irrelevant) when hyper-inflation hits. Think about it. Lending and credit lines will come to a complete halt as how much interest can you charge if inflation is 30, 40, 50% or more? Only a fool would lend money in that environment. Credit dries up, wages can no longer be paid, supplies no longer available, and factories, farms, etc. shut down without credit. Goods vanish from store shelves as people rush to convert decaying currency to physical assets. >>
If people dont get paid and have no available credit lines, prices for all goods and services will collapse. It is happening now. The Govt would have to implement price controls and basically take over the food distribution channels as the entire system shuts down.
Inflation can not exist if there is no demand. Your example eliminates any chance of demand if factories are shuttered, wages go unpaid, and credit lines eliminated.
You will have a MUCH better chance of seeing your hyperinflation if we have a massive global war. Look at the examples Roadrunner listed.......Angola--civil war, Austria, Germany--just after WW1, the Eastern Bloc countries--emerging from 45 years of communist destruction, Japan just after WW2, the Aftrican countries---in a constant state of civil war.
So if you want hyperinflaion then you had better hope for WW3. >>
It seems that many here believe inflation is caused solely by the money supply (i.e. the Fed), and that demand for goods and services does not enter into the equation. But if the classic definition of inflation is "too much money chasing too few goods", than we would need excess cash (and credit) in the hands of consumers, and depleted inventories of goods. Neither of those conditions exist right now imo.
<< <i>
... But if the classic definition of inflation is "too much money chasing too few goods", than we would need excess cash (and credit) in the hands of consumers, and depleted inventories of goods. Neither of those conditions exist right now imo. >>
That is because we have been giving trillions to financial institutions instead of easing pressure on the consumers. I believe history will record that as the fatal blunder of our economy.
Random Collector
www.marksmedals.com
<< <i>That is because we have been giving trillions to financial institutions instead of easing pressure on the consumers. I believe history will record that as the fatal blunder of our economy. >>
A blunder is a mistake. The robbery of the American people by the financial elite of the world and thier puppets in Washington is a well scripted event.
<< <i>If people dont get paid and have no available credit lines, prices for all goods and services will collapse. It is happening now. The Govt would have to implement price controls and basically take over the food distribution channels as the entire system shuts down.
Inflation can not exist if there is no demand. Your example eliminates any chance of demand if factories are shuttered, wages go unpaid, and credit lines eliminated.
You will have a MUCH better chance of seeing your hyperinflation if we have a massive global war. Look at the examples Roadrunner listed.......Angola--civil war, Austria, Germany--just after WW1, the Eastern Bloc countries--emerging from 45 years of communist destruction, Japan just after WW2, the Aftrican countries---in a constant state of civil war.
So if you want hyperinflaion then you had better hope for WW3. >>
How do you explain the inflation in Zimbabwe? Do they have incredible demand for goods and services there driving their inflation? Maybe I am mistaken, but I don't they do.
By the way, you may not have noticed, but it appears to me that the fed has backed off from going for "a strong dollar" to peddling inflation.
<< <i>
<< <i>If people dont get paid and have no available credit lines, prices for all goods and services will collapse. It is happening now. The Govt would have to implement price controls and basically take over the food distribution channels as the entire system shuts down.
Inflation can not exist if there is no demand. Your example eliminates any chance of demand if factories are shuttered, wages go unpaid, and credit lines eliminated.
You will have a MUCH better chance of seeing your hyperinflation if we have a massive global war. Look at the examples Roadrunner listed.......Angola--civil war, Austria, Germany--just after WW1, the Eastern Bloc countries--emerging from 45 years of communist destruction, Japan just after WW2, the Aftrican countries---in a constant state of civil war.
So if you want hyperinflaion then you had better hope for WW3. >>
How do you explain the inflation in Zimbabwe? Do they have incredible demand for goods and services there driving their inflation? Maybe I am mistaken, but I don't they do.
By the way, you may not have noticed, but it appears to me that the fed has backed off from going for "a strong dollar" to peddling inflation. >>
From the CIA World Factbook......
The UK annexed Southern Rhodesia from the [British] South Africa Company in 1923. A 1961 constitution was formulated that favored whites in power. In 1965 the government unilaterally declared its independence, but the UK did not recognize the act and demanded more complete voting rights for the black African majority in the country (then called Rhodesia). UN sanctions and a guerrilla uprising finally led to free elections in 1979 and independence (as Zimbabwe) in 1980. Robert MUGABE, the nation's first prime minister, has been the country's only ruler (as president since 1987) and has dominated the country's political system since independence. His chaotic land redistribution campaign, which began in 2000, caused an exodus of white farmers, crippled the economy, and ushered in widespread shortages of basic commodities. Ignoring international condemnation, MUGABE rigged the 2002 presidential election to ensure his reelection. The ruling ZANU-PF party used fraud and intimidation to win a two-thirds majority in the March 2005 parliamentary election, allowing it to amend the constitution at will and recreate the Senate, which had been abolished in the late 1980s. In April 2005, Harare embarked on Operation Restore Order, ostensibly an urban rationalization program, which resulted in the destruction of the homes or businesses of 700,000 mostly poor supporters of the opposition. President MUGABE in June 2007 instituted price controls on all basic commodities causing panic buying and leaving store shelves empty for months. General elections held in March 2008 contained irregularities but still amounted to a censure of the ZANU-PF-led government with significant gains in opposition seats in parliament. MDC opposition leader Morgan TSVANGIRAI won the presidential polls, and may have won an out right majority, but official results posted by the Zimbabwe Electoral Committee did not reflect this. In the lead up to a run-off election in late June 2008, considerable violence enacted against opposition party members led to the withdrawal of TSVANGIRAI from the ballot. Extensive evidence of vote tampering and ballot-box stuffing resulted in international condemnation of the process. Difficult negotiations over a power sharing agreement, allowing MUGABE to remain as president and creating the new position of prime minister for TSVANGIRAI, were finally settled in February 2009
From me
The US govt probably would like to see the dollar weaken but they are powerless. The rest of the world is begging for dollars--ie HUGE demand--this isnt going to change in the near term. In fact it may even be exacerbated if the bond markets do what I think they will do in the very near term.
Eventually we may have some inflation, actually I hope we do, but it wont be tomorrow or next month or probably even next year and it most certainly will not be 40% or 50% or 100,000,000%
A good study would be to read about each country in Roadrunners list during their inflationary times. I think you may find that inflation was caused by something other than the printing of money.
Knowledge is the enemy of fear
roadrunner
Hyper-inflation causes extreme levels of demand for many classes of goods. No one wants to hold dollars that are devaluing by the day. So naturally, all existing holders of dollars are anxious and eager to convert them into tangible goods, assets, and commodities. Granted, some classes of goods may not be in demand such as luxury goods, fine art, etc., but certainly anything of good and lasting value will be purchased.
Prices won't collapse because eager dollar holders will gladly exchange their dollars for those goods.
Or does extreme demand--usually caused by a supply shock--cause hyperinflation?
Remember the rice crisis of last year. Someone told a story of no rice in Asia so everyone in California went to Sams Club and bought all the rice. This pushed rice futures prices to the moon.
Knowledge is the enemy of fear
<< <i>Or does extreme demand--usually caused by a supply shock--cause hyperinflation? >>
Certainly cases like your rice example would cause isolated price inflation, but it would be limited to the particular commodity or product. I think it would be difficult to spark price inflation across multiple product classes with reports of shortages of individual products/commodities.
In hyper-inflation, people are desperate to dump their cash (turn cash into durable, trade-able assets). Most people probably have their preferences but in the end they'll take what they can get, probably in an order similar to PMs, guns/ammo, durable food, fuel/oil, medicine, critical supplies, porn, then onto lesser necessities.
I'm not an expert, that's just how I would envision such a scenario.
Other than the fear that prices of goods/services were increasing, what would cause such desperation?
Knowledge is the enemy of fear
<< <i>people are desperate to dump their cash
Other than the fear that prices of goods/services were increasing, what would cause such desperation? >>
What more reason would you need? At 100% inflation, your money's devaluing at 8 or 9% per month (2% per week), I'm not holding onto dollars any longer than I need to, especially if there's a reasonable asset I can convert it into. If I have $50k in my savings, I'm not just going to let it sit there and decay. Would you?
Im just trying to figure out which comes first, rising prices or devaluation.
FWIW--I dont necessarily believe that devaluation causes higher prices. I think you would agree that the US dollar has been hugely devalued over the past 90 years, yet prices for many everyday food items do not really reflect that.
Examples---
dozen eggs in 1920--50c, today 1.20.
loaf of bread in 1925--20c, today 99c.
5lbs of sugar in 19200--97c, today 2.25
1 pound of chicken in 1925--40c, today 80c at Walmart.
food prices
Of course you could say that the price of an automobile is 10x higher, but I could counter that one needs to work fewer hours to afford a car and that car has much more utility today.
My point is that just because money supply increased(devalued), this has not caused a corresponding increase in prices(inflation).
Hyperinflation is not a result of printing money, but rather printing money is a result of hyperinflation. Hyperinflation is the result of massive supply/demand shocks.
Knowledge is the enemy of fear
I would answer your comment about food prices and lots of other prices with the observation that technology and distrubtion has made a lot of things cheaper overall. If it weren't for technology, I would expect the prices to have kept pace with inflation better.
<< <i>Hyperinflation is not a result of printing money, but rather printing money is a result of hyperinflation. Hyperinflation is the result of massive supply/demand shocks. >>
I wouldn't argue that what you're saying isn't true, but I would also say that it always true (i.e. Zimbabwe).