The source of this post is an article in a reputable Russian publication. As of the beginning of this year, the rate of inflation in Russian Federation estimated at 9.5% Russians are worried. The article provided this brief illustrated history of hyperinflation to optimistically point out that 9.5% inflation is, really, very small in comparisonto, say, Germany of the early 1920s…
“Inflation is growing at such a rate that the Bank does not have time to print banknotes. New banknotes of one hundred thousand were released just two weeks ago, and soon it’ll release a million pieces of paper. When are we going to count in billions?” Erich Maria Remarque wrote in Black Obelisk, his novel about life in Germany in the early 20s.
Incidentally, the often mistakenly attributed to Joseph Stalin phrase The death of one man is a tragedy, the death of millions is a statistic (Aber das ist wohl so, weil ein einzelner immer der Tod ist — und zwei Millionen immer nur eine Statistik) came from Remarque’s Black Obelisk.
At the time, hyperinflation in the Weimar Republic has been considered unprecedented in modern times.
The average daily inflation rate was about 25%, so that prices nearly doubled every three days — 800-fold per month. At least twice a week new banknotes with ever growing face values were issued. People were paid daily wages and hurried to spend all the money as soon as possible.
Hyperinflation was stopped only after the currency reform: a new German mark was worth one trillion old marks. The economic crisis in 1921-1923 Germany was one of the reasons for the rise of Nazism.
The largest of denominations in the history of money circulation has become a bill sextillion (a billion trillion) Penge — the Hungarian national currency. Penge came into circulation in 1946, when Hungary was experiencing the peak of hyperinflation. The depreciation of the currency in Hungary in July 1946 was truly mind-blowing — prices kept doubling up every 15 hours.
Restoration of the forint, the currency of the Austro-Hungarian Empire followed. The exchange rate was 1 forint for 400 octillion (400,000,000,000,000,000,000,000,000,000 (27 zeros)) penge. However, despite its scope, the hyperinflation in Hungary, unlike the one in Weimar Germany, had a considerably less serious economic consequences — after the World War II the country was completely ruined and the standard of living could hardly fall any lower.
Zimbabwe. After coming to power in Southern Rhodesia President Robert Mugabe this once the richest country in Africa, has become the poorest, even got a new name — Zimbabwe. Since 2000, the country experiences nonstop inflation. The national currency has depreciated dramatically.
According to official reports, inflation in Zimbabwe has increased from 32% in 1998 to 7,634.8% in 2007. Independent economists call these numbers too low and estimate them to be about four times higher. By early 2008, inflation rate reached 100,000% thousand per cent annually. In July 2008, was released a banknote 100 billion Zimbabwean dollars. One US dollar was worth 50 million local dollars.
The first signs of serious inflation in Yugoslavia showed up back in the mid 80-ies of the last century, just after the death of Yugoslavian leader Josip Broz Tito. It reached its peak in the first half of the 90s, after a federal republic was plunged into a civil war. In January 1994, the prices of basic commodities doubled up every 34 hours. Soon after the release of bills with face value of 500 billion dinars authorities allowed to use the German mark as the country’s official currency.
Inflation was somewhat slowed down only after the fifth money reform. This time the rate of exchange was one to 10 million dinars of the previous issue.
Greece. Wartime hyperinflation has begun in Greece in October 1943, but reached its peak a year later, when the country was liberated from the invaders and the Greek government have returned to their homeland from exile. If in 1942, the highest denomination banknote was 50,000 drachmas, in 1944 bills with face value of 100 trillion drachmas were issued. On November 11, 1944 the old to the new drachma were exchanged at the rate of 50 billion to one.