– Hyperinflation – 10 Worst Cases (ToTheTick, May 22, 2013):
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!
By Andrew Milne
About Andrew Milne
University Lecturer and International Relations Director at Sciences-Po Toulouse, France.