Global MEGA Hyperinflation illustrated on world banknotes

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Global MEGA Hyperinflation illustrated on world banknotes

Post by doug2222usa »

In the past, we have discussed various hyperinflations since the 1860s, and I have always pointed out that Hungary (and Greece) had the worst, by far, surpassing Zimbabwe, the Weimar Republic, and a few Russian republics - by several orders of magnitude.

Tonight, rummaging through old files, I found a 1992 advert by Col. Grover Criswell selling the various Hungarian notes. Grover is gone now, but he was my friend for some 30 years, as well as a flamboyant and astute merchandiser of everything Confederate- and Civil War-related. I think viewing the zero's will convince you. The price, if you can't quite read it, was $200 for the set.

Image

Mods, you can move this isolated post to some other location more appropriate, no objections.
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Re: Hyperinflation Illustrated

Post by Princestamps »

The Hungarian hyperinflation of 1946 may have been one of the worst ever. Others that come to mind.

Germany - 1923 100 billion to 1 I think.

Zimbabwe - 2008 100 trillion, but that was from a new Zim dollar issued in 2006 which had replaced several billion old dollars I think.

Yugoslavia 1993ish - Several trillions.

Brazil 1967 - 1994 - There was several reevaluations and currency changes from Cruzados, nova cruzados, cruzeiros and finally Cruizero reals or something. The present Reais is from 1994 and remained stable in comparison to these earlier currencies.

China 1950s - 100,000 units or so.

Chile and Uruguay - 2 or 3 revaluations

Angola - 10 million kwanzas = 1 kwanza readjusto, now several hundred thousands to a dollar.

Turkey million old lira to one Yeni turk lira in 2005 - new currency already losing value.

Many Latin American countries and African republics have had on and off inflation and I think many places outside the CFA franc zones have frequent revaluations. Ghana has had at least 3 and the new cedi is losing value, Nigeria is more stable, but the Naira worth 10/- in 1973 is now like 2000 to a Sterling Pound.

Greece had some serious inflation in the 1940s and even Israel has several revaluations of its shekel/lirot currencies. Most of Europe had serious inflation after WW2 and it stablised in the 1960s. An Italian lira was about 10 pence before the war, by 1955 it was 100 to 10d British. Japanese yen were very strong before World War 2, in 1937 Postage was 2 sen, by 1947 it was 2 yen and in 1955 it was 5 yen. Yet in 1990 it was 80/50 yen and has not changed since.
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Re: Hyperinflation Illustrated

Post by Allanswood »

They pale into insignificance Princestamps when you realise that for Hungary it equated to 100 quintillion pengo: 1.

1 quintillion is 100 quadrillion.
1 quadrillion is 100 trillion.

So it's a hundred million trillions. [100,000,000,000,000,000,000]

It's an astonishing figure!

And apparently it worked out to something like 20c?
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Re: Hyperinflation Illustrated

Post by Princestamps »

Allanswood wrote:They pale into insignificance Princestamps when you realise that for Hungary it equated to 100 quintillion pengo: 1.

1 quintillion is 100 quadrillion.
1 quadrillion is 100 trillion.

So it's a hundred million trillions. [100,000,000,000,000,000,000]

It's an astonishing figure!

And apparently it worked out to something like 20c?
It was pretty significant and probably the worst ever, yet the German inflation of 1923 and now the Zimbabwe one of 2008, get the most attention?

Why?

Yet the Forint to come out of it in 1946 is still current, even if it is like 250 or so Forint to a dollar and my 2 and 10 Forint coins are essentially worthless :lol: The biggest note now I think is 20k Forint and biggest coin is 200 Forint.

Still compared to some other East European currencies, the Hungarians got off lightly.
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Re: Hyperinflation Illustrated

Post by gavin-h »

Princestamps wrote:It was pretty significant and probably the worst ever, yet the German inflation of 1923 and now the Zimbabwe one of 2008, get the most attention?

Why?
Probably because Germany was seen as a world player and Hungary wasn't. :idea:

And don't forget that the 1946 Forint was divisible into 100 Filler. :wink:

Zimbabwe is more interesting in that it suffered multiple revaluations and (in a classic case of "one downmanship", if you compare the Fourth Dollar to the First, there are actually 3 more noughts than the Hungarian case:

1/8/2006:

1 "Second Dollar" =
1,000 "First Dollar"

1/8/2008:
1 "Third Dollar" =
10,000,000,000 "Second Dollar" =
10,000,000,000,000 "First Dollar"

2/2/2009:
1 "Fourth Dollar" =
1,000,000,000,000 "Third Dollar" =
10,000,000,000,000,000,000,000 "Second Dollar" =
10,000,000,000,000,000,000,000,000 "First Dollar"

By the time of the "Fourth Dollar", the currency has all but been abandoned:
Wikipedia wrote:Abandonment and demonetisation

The use of foreign currencies was legalised in January 2009, causing general consumer prices to stabilise again after years of hyperinflation and price speculation. The move led to a sharp drop in the usage of the Zimbabwean dollar, as hyperinflation rendered even the highest denominations worthless.

On 2 February 2009 the Zimbabwean dollar was redenominated once more, at the ratio of 1 000 000 000 000 (1012) ZWR to 1 ZWL. The third dollar was expected to be demonetised on 1 July 2009, but the complete abandonment of local currency was hastened by the decline in overall consumer usage of local currency in favour of other currencies, helped by the legalisation of the use of hard currencies in January 2009.

The Zimbabwean dollar was effectively abandoned as an official currency on 12 April 2009 when the Economic Planning Minister Elton Mangoma confirmed the suspension of the national currency for at least a year, but exchange rates with the Zimbabwean dollar were maintained for up to a year afterwards. The current government of Zimbabwe said that the Zimbabwean currency should only be reintroduced if the industrial output was 60% or more of its capacity, compared to the April 2009 average of 20%.

On 29 January 2014 the Zimbabwe central bank announced that the US dollar, South African rand, Botswana pula, Pound sterling, Euro, Australian dollar, Chinese yuan (renminbi), Indian rupee and Japanese yen would all be accepted as legal currency within the country.

On 12 June 2015, the Reserve Bank of Zimbabwe said it would begin a process to demonetise the Zimbabwean dollar, to officially value the fiat currency at zero. The plan was to have completed the switch to the US dollar by the end of September 2015and to adopt the use of multiple currencies. The Zimbabwean government stated that it would credit 5 US dollars to domestic bank accounts with balances of up to 175 quadrillion Zimbabwean dollars and exchange Zimbabwean dollars for US dollars at a rate of 1 USD to 35 quadrillion Zimbabwean dollars to accounts with balances above 175 quadrillion Zimbabwean dollars. This move was meant to stabilise the economy and establish a credible nominal anchor under low inflation conditions.

By the end of November 2015, total verified balances were $15.8 million; about $10 million was disbursed to the banks while 483,140 accounts were paid out. The number of paid out accounts represent 47 percent of verified balances. Clients of closed banks were paid about $826,000 while walk-in clients received $740,000.

On 11 December 2015, The Herald reported that the Reserve Bank of Zimbabwe had paid out about $7.2 million US dollars in compensation for redemption of demonetised Zimbabwe dollars, which matched figures from the Ministry of Finance and Economic Development.

The exercise brought closure to the outstanding issue on the Zimbabwe dollar, further confirming the government's position that the local unit will not return anytime soon. The Government has maintained that the return of the Zimbabwe dollar would only be considered when key economic fundamentals such productivity in key sectors have been achieved.

In November 2016 Zimbabwe issued US$10 million worth of "bond notes" in two and five US dollar denominations. These bond notes were exchangeable with US dollars and were issued when people withdrew money from their bank account but they could not be used outside Zimbabwe. The bond notes were one of nine official legal tender currencies in Zimbabwe.
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Re: Hyperinflation Illustrated

Post by Princestamps »

Yes, the bond system started with 1c, 5c, 10c, 25c Bond coins issued in late 2014. A 50c was added in 2015 and a $1 Bimetallic bond coin in early 2016.

In November green $2 and magenta $5 Bond notes were issued. Already the people of Zimbabwe do not trust the currency and some black market traders were selling the bond currency at the rate of $1 Bond money = $0.77USD of $1 greenback costing $1.30 Bond money and no doubt it will drop further.

The 1 cent bond coin is copper plated steel, the 5c nickel plated steel and the other coins 10c to 50c are steel. The size and shapes vaguely emulate American coins, although the 50c is much smaller than the US 50c and $1 is a bimetallic thing that looks like a Brazilian real.

Amazed they stopped at $5, is the country that poor, or is the trust so low that they can not authorised larger notes. I also read at one stage in 2008, the Zim government had $236 in ready cash!

The 93 year witchdoctor old called Mugabe (Born Robert Gabe Mugabe 1 Oct 1923!) needs to go, he is a dictator and universally loathed by the world and most of Zimbabwe. This man has ruled it for 36 years (April 1980 - now), yet could not organise a piss up in a brewery! :lol:
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Re: Hyperinflation Illustrated

Post by PetCin88 »

Yugoslavia 100 Dinara Coin - "you will need to have 50 QUADRILLION (50,000,000,000,000,000,000 - 19 ZEROS) of this devalued brass coin to equal the value of the below 500 BILLION DINARA Note. Such a theoretical quantity of coins is so large a number that it boggles the mind - it would equal the weight of 3 BILLION aircraft carriers requiring 20 MILLION YEARS of the current copper production and would DEPLETE 100% of all Copper contained within the crust of the earth"...
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Re: Hyperinflation Illustrated

Post by erich »

It's not nice to make fun of hyperinflation. :mrgreen: No, these are not genuine. Yes, I almost want a set of them.

hyperinflation.png
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Re: Hyperinflation Illustrated

Post by Allanswood »

PetCin88 wrote: 04 May 2022 00:19 Yugoslavia 100 Dinara Coin - "you will need to have 50 QUADRILLION (50,000,000,000,000,000,000 - 19 ZEROS) of this devalued brass coin to equal the value of the below 500 BILLION DINARA Note. Such a theoretical quantity of coins is so large a number that it boggles the mind - it would equal the weight of 3 BILLION aircraft carriers requiring 20 MILLION YEARS of the current copper production and would DEPLETE 100% of all Copper contained within the crust of the earth"...

Can someone explain the logic of this?

Surely if you have a 100 Dinara coin and a 500 billion Dinara note (is that not the same monetary unit?), then you would need just 5 billion coins to equal the value of the note.

With aircraft carriers you would have enough to equal the weight of just 8 carriers, not 3 billion (if the coins are say 15 grams each). :shock:

And if the math is true, with an actual 50 quadrillion coins needed then that will be about 75 million carriers, still not 3 billion. But I can't see how that works.

Anyway, just a frivolous, unreasonable comparison. But I wouldn't want it to be internet quoted forever more as 'fact'.

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Re: Hyperinflation Illustrated

Post by OldDuffer1 »

Recently purchased this "Milliarde" German note (I believe that is a Billion- 1000,000,000M). Cost me around £5!
Milliarde note.jpg
Presumably for cheapness of production the reverse is blank.
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Re: Hyperinflation Illustrated

Post by Brit-Col »

Allanswood wrote: 27 Oct 2022 15:00 Can someone explain the logic of this?

Surely if you have a 100 Dinara coin and a 500 billion Dinara note (is that not the same monetary unit?), then you would need just 5 billion coins to equal the value of the note.

With aircraft carriers you would have enough to equal the weight of just 8 carriers, not 3 billion (if the coins are say 15 grams each). :shock:
Ah, but another way of looking at it is to consider the intrinsic value of the coin. Going with the assumption of a 15 gram coin the scrap value of the brass is roughly 4 or 5 cents (USD), according to Google. So 5 billion of them would yield $250,000,000 (if my math is correct). That’s in today’s values.

Then we need the exchange rate value of the 500 billion Dinara note into some stable currency, say USD, at the time and factor it for subsequent inflation. I haven’t the faintest clue but it wouldn’t be much.

Forget the bank, take the coins to the local scrap metal dealer. You’ll be much better off! :lol:

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Re: Global MEGA Hyperinflation illustrated on world banknotes

Post by norvic »

If you see a pile of worthless banknotes in the gutter it’s because somebody stole the wheelbarrow they were being loaded into. :D
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