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Hyperinflation: 5 stories

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Hyperinflation is a fast uncontrolled prices growth; as a result, prices for goods and services reach critical values. This phenomenon is characteristic of wars, revolutions, and other political and economical crashes. History knows many examples of how the monetary value reached incredible figures, and we will tell you about the five most interesting cases in this article.

Reserveum Group continues working on an effective and fair currency; with hyperinflation, we would like to demonstrate the inadequacy of the modern money system which can be replaced with a fair currency that eliminates the very risk of devaluation.

Germany in 1920s

The economic crisis in Germany that became even stronger after World War I, ended up in hyperinflation that made it into all the economic textbooks. Prices on goods in the country grew by 25% a day, and all the earned money should have been spent right away, or they could cost nothing the following day. The madness of that life in a constant urge for any goods one could find was vividly displayed in Erich Maria Remarque’s “Black Obelisk” that shows the paradigm of the “lost generation” – live it day by day.

The extreme situation was caused by the German government’s huge military loans. When the war was lost, Germany also was forced to pay reparations to all the affected countries. All the industrial regions were left under the allies’ control, and the only thing that could work to its full was the printing press.

Just over three years, the Deutsche Mark’s rate grew from 50 marks per dollar (as in 1920) to 4 200 000 000 000 marks per dollar (as in 1923).

To stop the hyperinflation, the government established the Deutsche Rentenbank; as the registered capital, it used the lands of farmers and industrialists who were forced into long-term government debt obligations. The Rentenbank issued the Rentemark that cost 1 trillion paper marks, so 1 dollar was equal to 4,2 rentenmarks. The banknote with the highest nominal value issued in times of hyperinflation was worth 100 trillion marks.

To understand what hyperinflation is about, it is best to first figure out what inflation is. We already have an article on that: “Why Do Cheeseburgers Become More Expensive”.

Hungary 1945-1946

After World War II, hyperinflation in Hungary became the century’s record for the national currency devaluation.

After supporting Germany in the war, Hungary was devastated with before-war debts as well as the reparations added after the defeat; overall, they all reached 50% of the country’s budget.

Printing new money only led to hyperinflation when prices on goods doubled every 15 hours for a whole year. As a result, by August 1946, 1 USD cost 460 octillion pengos (4,6*1029). The banknote with the highest nominal value issued in Hungary in that period amounted to 1 sextillion pengo.

The government managed to stop the hyperinflation by returning forint, the national Hungarian currency that had built trust in people. The exchange rate of forint to pengo amounted to 4*1029.

Yugoslavia 1991-1994

The next geopolitical distress was the collapse of the USSR; after that, the former USSR countries were left ruined and were forced into civil wars, crises, and hyperinflation.

Yugoslavia was the worst hit by the collapse of the USSR due to historical ethnic hatred, religious disagreements, and disputed territories. The civil war in Yugoslavia was one of the cruellest in modern history and the bloodiest after World War II.

The hyperinflation caused by the war and the UN sanctions amounted to around 100000% only in 1993. In 1992, the highest nominal value per banknote was 50 thousand dinars, while in 1993 – 500 billion dinars. In 1993, one US dollar cost around 1,8 trillion dinars.

With Yugoslavia, the usual ways out of hyperinflation did not work: one after another, lost their values the three new dinars that were issued as 1 to 1 million, then 1 to 1 billion, and finally, 1 to 10 million dinars. The failure of all these reforms led to people using the Deutsch mark as the solid currency in the countries of former Yugoslavia.

Zimbabwe 1992-2015

The hyperinflation in Zimbabwe was unprecedented. Its scale reached such numbers people just could not count.

The hyperinflation was caused by the dry spell, failed land reform and participation in the Second Congolese War. The country’s agriculture and industry were devastated followed by deficit, unemployment and famine.

At the beginning of the XXI century, inflation amounted to 1000% a month; by 2007, the international representatives estimated the inflation rate in Zimbabwe as 1,5 mln per cent. By that point, one USD cost 25 million Zimbabwean dollars.

The government tried to treat hyperinflation with denomination: the second Zimbabwean dollar was exchanged at the rate of 1:1000 to the previous one, while the third one was exchanged at the rate of 1: 10 000 000 000 of the second ones.

By 2008, the yearly inflation was estimated as 516 quintillions per cent (516 000 000 000 000 000 000 %). Prices doubled every 17 days. In November 2008, the government issued banknotes with a nominal value of 1 million Zimbabwean dollars; in December, there appeared Z$200 mln banknotes, while a loaf of bread cost Z$35 mln. The monthly inflation rate reached around 13,2 billion per cent. Unofficial data has it that in December 2008, the inflation rate reached 6,5⋅10108 %.

In 2009, the Zimbabwean dollar was taken away from circulation and the economy switched to USD.

We have already written why the USA benefits from interfering with the crisis countries’ economies in our article “Digital Concentration Camp”.


The crisis in Venezuela has started back in 2013. This is one of the freshest examples of hyperinflation which can be studied not in history books but seen live.

There are different reasons behind the economic crisis, from natural to political ones. Among the fundamental reasons, we can list:

  • lowering prices on oil and growing prices on petrol in the domestic market;
  • the “world socialistic revolution” policies that had led to food shortage and ration-card system;
  • 2016 dry spell that led to critically low levels of water on Guri Dam, with a following crisis in the electricity industry;
  • foreign debts.

The hyperinflation in Venezuela in 2018 amounted to around 1 370 000% – 1 700 000%, and by 2019, it reached 10 000 000%.

The country managed to lower prices growth and restore consumer goods trading when the government stopped controlling prices and lifted the restrictions on foreign currency use. One of the side effects was the economy dollarisation.

Who is to blame and what to do?

As you see, all of these samples have one thing in common – direct or indirect dependence on USD, even though this “world currency” cannot provide economic stability on neither the international nor the domestic levels.

The very structure of the money system is imperfect; this is why crises, inflation, and hyperinflation are inevitable for the majority of the countries, and they become everybody’s problem, not only the problem of the government.

The only way to solve the problem of modern money is to switch to a decentralised currency that is regulated with an algorithm. Such a currency would consider all the demand and supply fluctuations and would regulate its emission on its own, so the inflation and hyperinflation become impossible.

According to the analysis group findings:


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