How 9 Countries Completely Lost Control Of Inflation

business insider ^ | Sep. 18, 2012, 7:23 PM | Matthew Boesler

[BenLurkin]

Hyperinflationary episodes have appeared several times over the past century – 55, to be exact – as the world's nations have experimented with fiat currencies backed by the full faith and credit of the governments that issue them.

At times, that full faith and credit has been misplaced – and holders of unstable currencies have been caught empty-handed in countries all over the world.

Even some of the largest economies in the world today, though – like China, Germany, and France – have suffered devastating hyperinflationary episodes.

A major historical precursor of hyperinflation is war that destroys the capital stock of an economy and dramatically reduces output – but the misplaced monetary and fiscal policies that ensue are almost always part of the story.

Hungary: August 1945 - July 1946 Daily inflation rate: 207 percent Prices doubled every: 15 hours

Zimbabwe: March 2007 - November 2008 Daily inflation rate: 98 percent Prices doubled every: 25 hours

Yugoslavia/Republika Srpska: April 1992 - January 1994 Daily inflation rate: 65 percent Prices doubled every: 34 hours

Weimar Germany: August 1922 - December 1923 Daily inflation rate: 21 percent Prices doubled every: 3 days, 17 hours

Greece: May 1941 - December 1945 Daily inflation rate: 18 percent Prices doubled every: 4 days, 6 hours

China: October 1947 - May 1949 Daily inflation rate: 14 percent Prices doubled every: 5 days, 8 hours

Peru: July 1990 - August 1990 Daily inflation rate: 5 percent Prices doubled every: 13 days, 2 hours

Nicaragua: June 1986 - March 1991 Daily inflation rate: 4 percent Prices doubled every: 16 days, 10 hours

France: May 1795 - November 1796 Daily inflation rate: 5 percent Prices doubled every: 15 days, 2 hours

[Leaning Right]

Thanks for the replies.

As a follow-up: Let's suppose that person A has $1000 under his mattress, and person B has $1000 in a “safe” bank savings account.

Now hyperinflation hits. Person A's mattress $1000 rapidly becomes worthless.

Historically, is person B that much better off? Will his bank keep raising deposit rates fast enough to at least dampen the hyperinflation effect? Or is person B ruined as well?

[Starboard]

Both are hurt by holding cash. Passbook holders will be only slightly better off as their rates will creep up at a glacial pace so they’ll essentially be ruined as well. Bondholders will take a bath on the value of their holdings but that’s another matter. The rates of various forms of money market accounts will rise fairly quickly in response to the general increase in the level of interest rates.

[wtc911]

I’m looking harder at silver than gold. I bought my last hundred ounces too near the top and need to cost average. I am also heavy in lead but that’s a different conversation.

[wtc911]

I’m looking harder at silver than gold. I bought my last hundred ounces too near the top and need to cost average. I am also heavy in lead but that’s a different conversation.

[ctdonath2]

At least the guy with money in his mattress HAS the money.
The guy with his money in the bank will have a hard time withdrawing it.