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Hyperinflation – 10 Worst Cases
Originally posted http://www.tothetick.com/hyperinflation-10-worst-cases
I have a neat little app on my smartphone that I like to look at when I’m feeling bored. It won’t change anything in my life, but it makes me think as I see the numbers clocking up, and then suddenly stopping for a few seconds. It’s the app that tells me the how much the National Debt of each country stands at in real-time. As I sit down at my computer screen the USA National Debt amounts to $17 041 241 xxx xxx. Forgive the x’s…they’re not kisses…I tried to get the last six digits, but, there’s no point, they’re moving too fast! Speedie Gonzalez has got into that app! It works out to $54 087 per person. That’s the same value as 3 408 248 816 XXX Big Mac Meals.
Inflation is hot property today, hyperinflation is even hotter! We think we are modern, contemporary, smart and ready to deal with anything. We’ve got that seen-it-all-before, been-there-done-it attitude. But, we are not a patch on what some countries have been through in the worst cases of hyperinflation in history. Here’s the top 10 list of worst cases in history. We’ll start with the worst first…let’s think positive!
1. Hungary 1946
Inflation at its peak reached a staggering figure of 13.6 quadrillion % per month! That’s 13, 600, 000, 000, 000, 000%. The largest denomination bill was a 100 Quintillion note. Prices ended up doubling every 15 hours at the time.
2. Zimbabwe 2008
Prices doubled here every 24.7 hours in November 2008 and inflation reached levels of 79 billion-odd %. They eventually stopped using the official currency and switched to the South African Rand or the $US. A loaf of bread ended up costing $35 million. This is the most recent case. It was Mugabe’s land-redistribution program that caused this.
3. Yugoslavia 1994
In just the one month of January 1994 inflation rose by 313 million %. Prices doubled every 34 hours (which is nothing compared to Hungary). The currency ended up getting revalued 5 times in all between 1993 and 1995, all to no avail. The cause? A recession triggered by overseas borrowing and an on-going political struggle in the 1980s and the following decade.
4. Germany 1923
Adolf Hitler rose to power as a consequence of hyperinflationary pressure (at least one of the reasons). Prices doubled every 3.7 days and inflation stood at 29, 500%. Germany was crippled with the reparation payments after the Treaty of Versailles and the end of World War I.
5. Greece 1944
Prices started rising by 13, 800% in October 1944 and they doubled every 4.3 days. The trouble was the debt incurred by World War II.
6. Poland 1921
Prices rose in 1921 by 251 times in comparison with those of 1914. They doubled every 19.5 days. The Zloty was introduced as the new currency in 1924 in an attempt to start afresh. Inflation stood at 988, 233% in 1924.
7. Mexico 1982
Mexico had a rate of inflation of 10, 000% in 1982 (due mainly to too much social expenditure).
8. Brazil 1994
Inflation was 2, 075.8% at its worst in 1994. The Real was adopted in 1994 and it managed to calm inflation down.
9. Argentina 1981
The highest denomination bill was the one million pesos note. The Peso was revalued three times.
10. Taiwan 1949
This was a knock-on effect from China and the Chinese Civil War. The New Taiwan Dollar was issued in June 1949. The monthly rate of inflation stood at 399%
Inflation can be creeping (mild or moderate inflation) or galloping. We can talk of Hyperinflation and stagflation (inflation and recession). Deflation is not better. We have so many names for it.
Hyperinflation means prices doubling in such a short space of time that we can’t keep up with it all. Hyperinflation comes about at times of trouble, war, conflict, upheaval, change on unprecedented levels. It comes about because we still haven’t learnt how to control it. History repeats itself, we hear people say. Thankfully, it doesn’t repeat itself too often. Fingers crossed.
But, in the time it took for me to write this, the US National Debt is now worth $17 041 308 85xx xxx, that means 3 408 261 915 xxx Big Mac Meals!
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Less government is better government, less still approaches good. Sociopathic egomaniacs who will save us from existential circumstances and make us fulfilled don't let go voluntarily. Anybody disagree that this is the breed running things right now? Does anyone think that Obama might actually change his mind about socialism and his own vision of his supernatural rise to demigodhood?
Government is like fire, a dangerous servant and a terrible master (paraphrase George Washington, a real human being)
There's no such thing as good government, and I really wish people would learn that.
Agreed, but really, no government > bad government.
What exists today is bad government, globally.
That probably means big war.
The Framers of the Constitution probably gave us the best kind of government there is to be had, given the world we live in. It breaks my heart to see what has become of it.
Not enough patriotism for anything to have a civil war. National riot maybe.
I disagree. I think once the shooting starts we will have a real problem trying to stop it. Maybe it's just me, but the fury barometer seems to me to rise a little more everyday.
I think that's about right.
No one has any idea what they're about anymore. Just people raging.
They have no idea why they are angry. If they do - they're unlikely to be angry at the real people responsible for their predicament.
The democrats are not who they've made themselves out to be. The republicans aren't who they've made themselves out to be.
If we see hyperinflation, I would expect the political and journalist class will jump borders. With the country in financial and civil ruins - They know they'll get "Dexter-ed".
Patriotism is anti-thetic to revolution. So in fact what you are saying is the opposite of what you intended.
I'm not so sure about that, and would think that the Founding Fathers would like a word with you in that regard. They were undoubtedly patriots, but for the most part they were patriotic "British subjects" who just wanted their rights as such respected. When it became obvious that that wasn't going to happen, they kicked off a revolution, becoming patriotic "American citizens" instead of patriotic "British subjects."
Patriotism will always find a home, even if it means making a new one from scratch.
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LOLmao500 wrote:
Actually, it is much more likely that the hyperinflation will precipitate the war, and that the war will be a revolutionary war, not a civil war. Big difference between those types of war, ya know.
-- Paul D. Bain
PaulBain@PObox.com
======================
Maybe we should be stacking Big Mac meals instead of gold and silver.
After all, they don't go bad, and they are kinda like a food item, aren't they ?
Big Mac Billionaire, here i come !!!!
Then again, mebbie not.
I like lead, copper, brass, and silver too much.
You can't eat Big Macs.
" It comes about because we still haven’t learnt how to control it"
BALDERDASH! You control inflation using GOLD and SILVER as money proper and NOTHING else. You cannot control theft which is all that ANY AMOUNT of inflation is.
Japan 2016?
http://nipponmarketblog.wordpress.com/
Notice the non-Mugahbe dates. They are a half century old. Modern monetary theory and practice on today's global scale will forever keep inflation at bay. The banks will keep trading this money until she blows up. Then stark deflation followed by rapid inflation followed by quick devaluation. Not far off now. I see 2015, maybe sooner with black swan.
Sorry, whiner, you need to read more carefully, and know your history better.
NICARAGUA -- late 80's & early 90's
BRAZIL -- several rounds of hyperinflation; several new "names" issued as money: Cruzeiro, Cruzerio Novo, (another) Cruzeiro
BOLIVIA -- several rounds in 80's and 90's; pesos, bolivianos, etc.
PERÚ -- sol, inti, etc.
It is not all about money, albeit it is ALWAYS about the currency of the government that is in trouble.
Further, many times it is about the cost of money based on the scarcity of assets. Further, it is often about scarcity of a labor force along with a scarcity of certain assets.
The U.S.A. dollar is not in any trouble, attracting buyers from everywhere... so stop any comparison to countries that could not attract buyers of their currency at any rate of interest paid on same. : )
What?? Really?
Show me ANY increase in velocity of $ and I'll believe it. The Bernank knows the cash is being hoarded and he is doing what he can with low rates to flush it out- but nobody's going for the bait. Do your part by only buying essentials and keeping it out of the market/banks.
The inflationary price effect we see is a ratio of dollars vs goods. If jobs decrease, will goods & services decrease? If they decrease will that induce a higher price for what’s left of need? Maybe iPhones will go to $50 but will a burger be $10 ? What will shoes cost, or apples? How about tires? Just wondering out loud
The best thing about inflation in the USA - using Bitcoin, people can order restaurant food (not just greasy takeout) and get hot meals for less Bitcoin as inflation rises. Talk about reducing your inflationary 'inputs' to a personal budget. Some people I know haven't spent cash on food since Foodler started to accept bitcoin, which is about a month or more.
This will only spread to other business areas, but reducing your inflationary exposure in food is certainly a good start.
Also Gyft is a good way to funnel funds into popular services and stores using bitcoin - just when you need it, so you don't hang on to inflationary dollars. (Coming soon to UK and Canada.)
My problem with this is the devaluation if bitcoin vs input dollars. If btc drops yet again by more than 10%, maybe even 50% in one day, isn’t that worse for me than inflation of 10% applied to the goods I’d consume just using fiat dollars?
Conversely, what are the odds that QE being removed results in a strong US dollar? I'll take the Bitcoin risks, any day.
Not me. Maybe with someone else's money but I think inflation under 20% per annum is a SAFER bucket to be in that bitcoins losing 50% in a day, which they certainly will.
The US is in a historically unique set of circumstances: The American people will continue to be impoverished while trillions of "past-printed" dollars will rapidly return and hyper-inflate the price of everything--hyper-stagflation if you will.
Got PMs?!
The reason for Yugoslavia's inflation 1994 was once again one of these beautiful Western embargoes. Remember those hundreds of thousands of dead Iraqi children worth the price?
Essentials like gold, silver, food, seeds, lead, and land, that kinda essentials?
Don't forget books...and booze.
oh yeah, good one, esp the booze.. :) And TP.. always need TP
Funny, my wife never grumbles about the big supply of TP I have stored away......I might be crazy for having too much gold/silver/lead/food, but I never get told we have too much TP!
That's one of the problems with digital money. It can't do double duty when hyper inflation hits.
Just wait till all those illegals start spending their new snap bennies
Right, now the inflation sky is falling - just stop the crap.