21 ms·

The hyperinflation gallery

ur-whale 4y ago
> All but one of the documented episodes of hyperinflation occurred in the last 100 years. But fear not, many more episodes are being produced as we speak, the story is alive and well.
dvh 4y ago
Was Poland ever part of Soviet?
- fennecfoxen 4y ago
  Not officially. In practice, it might as well have been. Likewise East Germany.
  - varjag 4y ago
    While they certainly were dominated and dictated by USSR, neither belonged culturally. Neither was as stiff with sexuality for instance; they didn't have collectivization in the earnest and understandably there was no cult of war in DDR other than in token solidarity with occupying Soviet troops.
    - Turing_Machine 4y ago
      > While they certainly were dominated and dictated by USSR, neither belonged culturally. Hmm... that seems more like a distinction without a difference. Though dominated by Russians (mostly... Stalin was a Georgian), the USSR was made up of over 100 different nationalities with widely varying languages and cultures.
      - varjag 4y ago
        Yes and you couldn't use all those fine languages for anything else than attending a folk festival. It was Russian-language monoculture in every aspect of your living (source: lived there). Certainly not so in satellite states. Besides you waved off my examples and these already were enormous cultural distance.
  - hef19898 4y ago
    No, not even close. Those were sovereign countries under communist single party rule and allied with the USSR. Ukraine, for exampke, was a sovereign Soviet Republic as part of the USSR, just as Russia was. Totally different things.
    - badpun 4y ago
      > Those were sovereign countries under communist single party rule and allied with the USSR. They were countries conquered and occupied by USSR troops, with USSR military bases in them to guarantee obedience. There were local rulers, sure, but major decisions were consulted with Moscow. Many decisions just were out of question, because it was obvious that Moscow would not approve and it may end in a military intervention (as in happened in Hungary and Czech Republic). So no, I would not describe them as "sovereign countries". The proper term is something like "puppet state".
    - fzzt 4y ago
      "Allied" in the sense of having a USSR-installed puppet government propped up by the massive presence of Soviet troops. This was a part of the concessions made by the West to Stalin, not an expression of the will of Polish or German people.
    - KaiserPro 4y ago
      I'm not sure if you are being factious or not. I know its not trendy, but its probably easier to think of the eastern bloc countries as colonies of the USSR, just as india, egypt, and the african nations were to the UK. Sure, on paper they were sovereign, and they certianly had a government made up of people from that country. But they were a colony.
      - mr_toad 4y ago
        Might be splitting hairs, but I’d characterise them more as client states or even puppet states, rather than colonies. A colony would imply more direct governance.
        4y ago
llanowarelves 4y ago
And each time they think (or get the citizens to think) they can escape the natural laws of the universe, money printing causing no inflation. "It won't happen here!" It's not us doing money printing.. it's uh.. COVID, uh.. the war, uh.. Climate change, uh.. corporate greed.
- pessimizer 4y ago
  They should have learned from the hyperinflation in the US that resulted from the vast money printing that happened after the 2008 property bubble burst. I know that inflation for the next decade was sub-2%, but if you think that's low, you're just showing your privilege. You can't dodge gravity.
  - hef19898 4y ago
    Hyperinflation is at least double digits month over month for a considerable stretch of time, arguably even more than that. Turkey comes to mind. The Western world is incredibly far from that and was nowhere close to it in 2008.
    - pessimizer 4y ago
      /s
      - poisonarena 4y ago
        what makes hacker news appealing is the very few reddit style, low effort comments. You should explain your viewpoint instead of this cringy /s business, everyone would be richer for it
        pessimizer 4y ago
        You mistook the /s for an attack on the comment above it, when it was actually a completion of my own grandparent comment. There was not inflation, even when some inflation was desired, after an almost inconceivable amount of money printing. I know it's my own fault for thinking of Poe's Law as a target rather than a pitfall. Sadly, for me satire/sarcasm isn't good unless the target of it sometimes can't tell that it is satire. It's evidence that I've treated them fairly. edit: note that cm2187 understood that, and formulated a direct, thoughtful reply. edit: also note (although you can't see it) that after I explained the "/s" wasn't an attack but an affirmation of the reply that told the truth about hyperinflation, that it wasn't a goldbugging Libertarian smirk, the upvotes started disappearing. Poe achieved.
omegaworks 4y ago
It's no surprise that many former colonies are on this list. Many were subjected to economic retribution from attempting to establish their sovereignty in a hostile global trade environment. Many colonizers imposed enormous debts on colonies in exchange for their freedom[1]. Runaway inflation is one of the many indiscriminate tolls sanctions impose on the people of a country. Why sell the products you produce on your farm to locals when you can ship them overseas and get dollars to exchange for medicine? Medicine that is illegal to produce in your country if your country hopes to operate in the good graces of the WTO[2]. All of this history is condensed by the author into mere "haphazard fiscal policies and civil struggles." This gallery of currencies is a stunning visceral departure point for understanding macroeconomic policy, my only wish is that it went deeper. 1. https://www.nytimes.com/2022/05/20/world/americas/haiti-history-colonized-france.html https://www.nytimes.com/2022/05/20/world/americas/haiti-hist... 2. https://www.wto.org/english/tratop_e/trips_e/pharma_ato186_e.htm https://www.wto.org/english/tratop_e/trips_e/pharma_ato186_e...
- sofixa 4y ago
  > Many colonizers imposed enormous debts on colonies in exchange for their freedom Which others apart from Haiti had to pay for their freedom?
  - mr_toad 4y ago
    The US incurred massive debts fighting the war of independence. They didn’t have to pay for their freedom in reparations, but the cost of the war did lead to massive inflation.
cm2187 4y ago
The beauty of all money being electronic is that it will make it practical to have an hyper-inflation. Which given how irresponsible the central banks and governements are is only a matter of time.
- messe 4y ago
  Only as long as the central banks don’t run into integer overflow (or poorly implemented bigint algorithms bringing trading to a near standstill)
  - cm2187 4y ago
    Well, we all know it's all COBOL. I was born too late to know the answer, I am only in my 40s.
- mtoner23 4y ago
  Are they really so irresponsible? the past 50 years has been a period of incredible competence in central banking all things considered.
  - cm2187 4y ago
    The first 30 of the past 50 years you mean.
  - logicchains 4y ago
    Not if you measure competence in terms of how much value the USD lost over the past 50 years vs the 50 years before that.
  - prottog 4y ago
    Very quickly off the top of my head, we've had the savings and loan crisis of the 80-90s, Black Wednesday in '92, the Great Financial Crisis, and the European sovereign debt crisis. I don't think the world can handle any more competency in central banking.
janandonly 4y ago
From the end of the article: But the most surprising realization? All but one of the documented episodes of hyperinflation occurred in the last 100 years. I feel that with all the QE going on right now, we might soon add major currencies to this list.
- mtoner23 4y ago
  What QE? we are in an era of quantative tightening right now actually.
  - octoberfranklin 4y ago
    Before departing, Mr. Horse left a note saying to close the barn door.
- bee_rider 4y ago
  I'm curious how surprising this really is. I mean I imagine most of the documented anythings have happened in the last 100 years, because documentation of everything has gotten so much better over the last 100 years. Not to mention, how do you have hyperinflation with gold bars and barter?
  - chrisco255 4y ago
    We have pretty good documentation on the performance of currencies over the past 500-2000 years. It is usually of historical note when an entire nation's economy collapses as a result of hyperinflation.
    - dragonwriter 4y ago
      > We have pretty good documentation on the performance of currencies over the past 500-2000 years. Not “Pretty good” enough to detect hyperinflation by the definition at issue (50%+ monthly inflation.) Before regular, systematic, and frequent collection of data for price indexes, we have good enough data to make wide-range estimates of inflation over intervals of years to decades, in the best cases, but hyperinflation (whether or not it produces collapse of currency) doesn't continue long enough to show up in that, and also hyperinflation tends to correlate with conditions which reduce the availability and survivability of data. (The author of the article here notes a data problem with Yugoslavia in the late 20th century, for instance.)
aidenn0 4y ago
It's not hyperinflation by any means, but it is interesting to me that when federal reserve notes were first issued, there was a $100 bill. That would be roughly $3000 today, and yet many places to this day won't accept bills larger than a $20 and the US has declined to print larger bills due to a worry of large denominations utility in crime.
- eloff 4y ago
  Just as crazy is that we still have the penny. Worth less than the metal it's made out of. If you see it in the street, you leave it there. When you get home you empty the change from your pockets, and the pennies just end up taking up space in a drawer somewhere. Not worth enough to even bother counting to change at the bank.
  - aidenn0 4y ago
    If I could, I would eliminate the penny, nickel, and dime. In terms of value, the dime is a bit iffy, but having to make change with a combination of quarters and dimes would be rather unpleasant, and now that consumer price inflation is going again, the dime should be on its way out anyways.
    - dllthomas 4y ago
      If memory serves, when we got rid of the half-penny it was worth more than a modern quarter. ... memory of the time I looked it up and did the calculation, not memory of the event, of course.
      - aidenn0 4y ago
        My memory is it was somewhere between a nickel and a dime, but that was maybe 15 years ago.
        dllthomas 4y ago
        Having actually run it again, it looks like more than a dime but less than a quarter.
eth0up 4y ago
I think this could be solved with a hard liquor backed currency. Not some boring metal or fiat hypnosis, but something of intrinsic, unwavering value. It would put things in perspective. And the sense of security from knowing you've got twenty bottles of whiskey in your pocket would assuage the anxiety of knowing you'll never retire or own a house. It might also give us an excuse for our society, which would have some real value too. ONE DOLLAR IN LIQUOR POURABLE TO THE BEARER ON DEMAND
- nostrademons 4y ago
  Small bottles of alcohol have historically become currency during instances of war and/or hyperinflation - there are reports of this during both the Bosnian war and WW2. The problem with it long-term is that it's a deflationary currency. Liquor gets consumed; once you pay a drunk with a bottle of alcohol, he tends to drink it and take it out of circulation. This means the value of alcohol goes up as the crisis continues, which means people have an incentive to hoard rather than circulate it, which means that it eventually loses its utility as a currency.
  - SkyMarshal 4y ago
    I'm not sure about that. It’s relatively easy to make and doesn’t require any particularly scarce materials. It just takes some time to ferment. But the alcohol industry is very good at supplying as much as people will buy. Seems more equilibritory than either deflationary or inflationary.
    - nostrademons 4y ago
      That's another problem for it: for a functioning currency, you really don't want something that's easy for people to "counterfeit" (make themselves). The ideal currency has a stable supply; can only be minted by a monetary authority that does not have a vested interest in spending it itself; is very difficult to destroy; is not perishable or hard to store; and can easily be exchanged in variable denominations. Alcohol is relatively good at the last two points, which makes it attractive during times of crisis when the central monetary authority breaks down, but it's not really durable as a currency.
ilaksh 4y ago
It's been maybe a day since I have had a comment on here buried so I will go ahead and mention cryptocurrency. Hyperinflation is evidence that money needs to be a high technology. Public ledgers in and of themselves don't prevent hyperinflation or other problems with money, but they do give us potentially much more and better tools to make money work. Especially if high tech digital money can be holistically integrated with information about real world resources.
yongjik 4y ago
Interesting, I wonder how many of those 100,000 $(currency) bills are associated with hyperinflation vs. regular run-of-the-mill inflation over a very long time. South Korea has 50,000 KRW bills (= about $36 these days), but its currency has been pretty stable in the past 40+ years.
- lm28469 4y ago
  > In the end, the researchers unearthed a total of 56 episodes of hyperinflation, many of them previously unreported in English-language works. It needs to be noted that the criterion used in their paper is very strict: a consumer price increase of at least 50% in a month. This excludes countries such as Israel, Vietnam, or Italy, even though they experienced many years of very steep inflation - and in the latter two cases, ended up with banknote denominations all the way up to 500,000.
wuliwong 4y ago
I bought a couple 100 trillion Zimbabwe dollar notes a while back. Been meaning to frame them, just like this. :)
christophilus 4y ago
My brother recently told me that Austrian economics is well known to be a dead end and that no one takes it seriously anymore. I’m curious if that’s really a generally held view among modern economists. It does seem to me the Austrian theories had decent predictive power when it comes to the boom / bust cycles and inflation baked into the current monetary systems.
- ogogmad 4y ago
  Not an expert but my guess is: A purely deductive approach to economics shouldn't work because economics is not mathematics. Austrian economics is an attempt to justify economic policies many would consider overly individualistic using pure deduction. An example of deduction failing unexpectedly can be found here: https://en.wikipedia.org/wiki/Unexpected_hanging_paradox https://en.wikipedia.org/wiki/Unexpected_hanging_paradox
  - christophilus 4y ago
    Maybe I don’t understand the problem, but I don’t see how that shows deduction failing. You can deduce that the time of the event will be a surprise and thus cannot be deduced from the available facts.
- mbustamanter 4y ago
  Mark Spitznagel wrote a superb book on austrian investing [0] (risk management with an austrian perspective, so not exactly the same). Personally as a mathematician, I prefer this to the economists who think that because the use lagrangians their ideas are somehow more valid, or worse yet, sophisticated. Either case, I don't see why austrian economics get more dirt than say, MMT. EDIT: Spitznagel works with Taleb and his fund, Universa Investments, had a 4000% return at the beginning of the covid-19 pandemic. [0] The Dao of Capital
  - eth0up 4y ago
    Any opinion on Friedrich Hayek, particularly The Road to Serfdom? I had difficulty absorbing it and lent it to a book snatcher before finishing. I do remember admiring the bits I thought I understood.
keeganjw 4y ago
I was looking at the bill from Weimar Germany that says "Zwei Billionen Mark" with the caption of "Two trillion mark" and I was like, did they get that wrong? I looked it up and sure enough the German word for trillion is billion! Languages are wild, I wonder how that happened.
- macintux 4y ago
  Here's some backstory on the UK vs US treatment of that question. https://www.thenakedscientists.com/articles/questions/why-are-uk-and-american-billions-different https://www.thenakedscientists.com/articles/questions/why-ar...
  - keeganjw 4y ago
    Oh cool, I didn't know the British used to do that as well!
- TazeTSchnitzel 4y ago
  It's English that's weird here. In most languages that have the word “billion”, the long scale is used.
  - djmips 4y ago
    As mentioned elsewhere - American English.
    - TazeTSchnitzel 4y ago
      I would be very surprised if there's a currently spoken variety of English that doesn't use the short scale. British English switched many decades ago.
- actionablefiber 4y ago
  In many many European languages the term for a thousand million is "milliard". English is the odd one out here. [1]https://en.wiktionary.org/wiki/milliard#Descendants https://en.wiktionary.org/wiki/milliard#Descendants
batshibstein 4y ago
How are these bills now worthless? I can't go to Zimbabwe today and get 100 trillion dollars (2.6 billion USD) from the currency that they printed that is supposed to be worth that amount?
- fzzt 4y ago
  Many countries that suffer hyperinflation keep the historical name of their currency, but establish some exchange rate between the "old" and "new" money. Zimbabwe went through four cycles - currency codes ZWD, ZWN, ZWR, and ZWL. Per Wikipedia: "The final redenomination produced the "fourth dollar" (ZWL), which was worth 10^25 ZWD (first dollars)." The ZWL itself was subsequently largely abandoned, too. I believe you'd have more luck transacting in foreign currencies.
Stamp01 4y ago
Oh. I thought this was a different type of inflation gallery. This is still cool, though.
XorNot 4y ago
For whatever reason when I saw this I thought it was going to be an archive of people's predictions of imminent hyperinflation in the West (still hasn't happened guys).
hn_throwaway_99 4y ago
When folks talk about hyperinflation, they often think it is just a case of governments printing too much money. And while that's of course part of it, nearly all cases (maybe all?) of hyperinflation are marked by supply destruction - the economy is no longer able to produce the goods and services needed by the population, so you have the same amount of money chasing fewer goods, and from there things can spiral. Cases in point: 1. In the Weimar Republic, Germany's productive capacity was devastated by WWI. 2. In Zimbabwe, which was "the bread basket of Africa", farm productivity famously plummeted due to the land redistribution policies of Robert Mugabe. 3. Looking at the current crisis in Sri Lanka, the forced switch to organic farming similarly destroyed farm productivity. 4. Though I wouldn't call it "hyperinflation", the COVID pandemic clearly caused shortages throughout the economy. My point is that hyperinflation is rarely just caused by governments living beyond their means - the trigger is nearly always a supply shock, and then it's what governments do in the face of that supply shock that gives you hyperinflation.
- deleted 4y ago
  [deleted]
- fzzt 4y ago
  Yeah, it's usually a combination of these two factors. You live beyond your means for a decade or five, and then something else goes wrong: natural disaster, war, crop failure, sanctions, whatever. Situations that could be survivable otherwise trigger a downward spiral because you were pushing your luck before.
- tenpies 4y ago
  That's the very dangerous game that Biden is playing with the SPR releases to buy Democrats votes, while simultaneously being very hostile to domestic oil and gas. If there is any sort of supply disruption in oil domestically, it's going to be the perfect storm. OPEC+ will be all too happy to have "maintenance issues" that same week and boom, $300 barrels of oil for the US, a functionally empty SPR, and we get to witness that mix of incompetence, desperation, and power that results in catastrophic ideas. For maximum devastation, this happens close to the Presidential elections.
stefantalpalaru 4y ago
wslh 4y ago
Why does it miss Argentina hyperinflation in 1989-1990? [1] [1] https://www.cambridge.org/core/journals/journal-of-latin-american-studies/article/abs/centralbank-distress-and-hyperinflation-in-argentina-198990/2DE46241D4627A2D6A28B9EBE955FA15 https://www.cambridge.org/core/journals/journal-of-latin-ame...
- lucb1e 4y ago
  It seems to just be the collection OP was able to buy, not an exhaustive list of events?
- Izkata 4y ago
  Per [0] Argentina's yearly inflation rate hit 300%, and per another comment [1] they only included monthly inflation rates >50%. Seems like if they did know about it, Argentina's hyperinflation wouldn't have been bad enough to be included. [0] https://www.citeco.fr/10000-years-history-economics/contemporary-world/hyperinflation-in-argentina https://www.citeco.fr/10000-years-history-economics/contempo... [1] https://news.ycombinator.com/item?id=32897119 https://news.ycombinator.com/item?id=32897119
  - wslh 4y ago
    Between 1989 and 1990 there was an inflation of 3079% and 2314% respectively: [1] [1] https://es.wikipedia.org/wiki/Inflación_en_Argentina https://es.wikipedia.org/wiki/Inflación_en_Argentina (in Spanish)
Daub 4y ago
Here in Vietnam the smallest note in 100vnd (around 40 cents). The number of zeros in VN currency can be confusing. The largest is 500,000. In shops tills, the per-item value is larger than the total because there is not enough room to display the total. As an extra layer of joy to the uninitiated, in speech we often abbreviate the millions to hundreds. Hence 200,000,000 becomes 200.
bawolff 4y ago
> But the most surprising realization? All but one of the documented episodes of hyperinflation occurred in the last 100 years. I was under the impression that in olden times currency was backed by gold (or something similar). How would hyperinflation occur in such a situation?
jansan 4y ago
"B. Pengö" means "Billion Pengö", but with a European "Billion", which would be a trillion Pengö in American counting. So the printed, but never circulated "1.000.000.000 B.-Pengő" bill was actually "worth" 10^21 Pengö. When Hungary introduced the Forint in 1946, the exchange rate was 1 Forint = 400.000.000.000.000.000.000.000.000.000 Pengő. That's at least what German Wikipedia says, no matter how incredible it may sound.
richrichardsson 4y ago
Does anyone know what happens after these hyperinflationary periods with the notes? Are they made illegal tender? For example I was curious about if you held onto a 10 million Ruble note when it was "worthless" until the point the Ruble recovered, is that note still legal tender and has your "investment" appreciated?
- rory 4y ago
  In the case of Germany, they invented a new currency worth a lot more and allowed exchange at a gov't-determined rate (they actually did this a few times).
- vikingerik 4y ago
  Basically, yes, old notes become nonlegal tender. Hyperinflation is resolved by the government issuing a new currency (sometimes with the same name as the old one), and allowing conversion to the new one, at whatever extreme ratio like 10e6 to 1 or whatever. The conversion lasts for a limited time and then any notes existing after that are no longer accepted as fiat currency.
chris123 4y ago
Inflation and hyperinflation are monetary problems. The would needs hard money for the digital age. The world needs the Bitcoin standard.
- deleted 4y ago
  [deleted]
fallingfrog 4y ago
Typically, hyperinflation is caused by a country trying to print money to pay a debt denominated in an external currency. (Because, the more money you print, the worse the exchange rate gets, so you have to keep printing more and more.). And very often, the crisis is related to imf loans taken under duress. (Venezuela, Zimbabwe, etc etc). Read “confessions of an economic hit man” if you want to know more about how that happens.
- everybodyknows 4y ago
  This could be generalized as structural inability to collect taxes commensurate with politically mandatory disbursements, less net new foreign borrowing. Consider for example the post-Soviet Eastern European hyperinflation mentioned: > ... fallout from the collapse of the USSR
  - fallingfrog 4y ago
    I get where you’re coming from- but I still think it’s more specific than that. Take Yugoslavia. They took out imf loans right before their hyperinflation. What you describe definitely causes inflation, but the “hyper” part, in every case I am aware of, involved foreign debts.
GatorD42 4y ago
That collection doesn’t include the largest denomination, the 100 quintillion pengö note that Hungary issued. That was during worst hyperinflation ever recorded and my family lived through it, so I collected some of notes, including a 5 pengö note from before and the 100 quintillion note from the end. See Wikipedia page https://en.wikipedia.org/wiki/Hungarian_peng%C5%91#Hyperinflation https://en.wikipedia.org/wiki/Hungarian_peng%C5%91#Hyperinfl...
gkya 4y ago
"Our belief in the power of personalities and ideas may blind us to fundamental truths: after all, every year, another penniless revolutionary pens a new version of Das Kapital or a new version of Mein Kampf." I won't bother with the bullshit of anybody who compares Das Kapital and Mein Kampf like this, grow a fucking brain. And conscience.
- tasuki 4y ago
  The section you quoted hasn't compared the two works. You're getting outraged quite needlessly.
iamnotsure 4y ago
It's not a bug, it's a feature.

> All but one of the documented episodes of hyperinflation occurred in the last 100 years. But fear not, many more episodes are being produced as we speak, the story is alive and well.

dvh 4y ago

Was Poland ever part of Soviet?

fennecfoxen 4y ago
Not officially. In practice, it might as well have been. Likewise East Germany.
- varjag 4y ago
  While they certainly were dominated and dictated by USSR, neither belonged culturally. Neither was as stiff with sexuality for instance; they didn't have collectivization in the earnest and understandably there was no cult of war in DDR other than in token solidarity with occupying Soviet troops.
  - Turing_Machine 4y ago
    > While they certainly were dominated and dictated by USSR, neither belonged culturally. Hmm... that seems more like a distinction without a difference. Though dominated by Russians (mostly... Stalin was a Georgian), the USSR was made up of over 100 different nationalities with widely varying languages and cultures.
    - varjag 4y ago
      Yes and you couldn't use all those fine languages for anything else than attending a folk festival. It was Russian-language monoculture in every aspect of your living (source: lived there). Certainly not so in satellite states. Besides you waved off my examples and these already were enormous cultural distance.
- hef19898 4y ago
  No, not even close. Those were sovereign countries under communist single party rule and allied with the USSR. Ukraine, for exampke, was a sovereign Soviet Republic as part of the USSR, just as Russia was. Totally different things.
  - badpun 4y ago
    > Those were sovereign countries under communist single party rule and allied with the USSR. They were countries conquered and occupied by USSR troops, with USSR military bases in them to guarantee obedience. There were local rulers, sure, but major decisions were consulted with Moscow. Many decisions just were out of question, because it was obvious that Moscow would not approve and it may end in a military intervention (as in happened in Hungary and Czech Republic). So no, I would not describe them as "sovereign countries". The proper term is something like "puppet state".
  - fzzt 4y ago
    "Allied" in the sense of having a USSR-installed puppet government propped up by the massive presence of Soviet troops. This was a part of the concessions made by the West to Stalin, not an expression of the will of Polish or German people.
  - KaiserPro 4y ago
    I'm not sure if you are being factious or not. I know its not trendy, but its probably easier to think of the eastern bloc countries as colonies of the USSR, just as india, egypt, and the african nations were to the UK. Sure, on paper they were sovereign, and they certianly had a government made up of people from that country. But they were a colony.
    - mr_toad 4y ago
      Might be splitting hairs, but I’d characterise them more as client states or even puppet states, rather than colonies. A colony would imply more direct governance.
      - 4y ago

llanowarelves 4y ago

And each time they think (or get the citizens to think) they can escape the natural laws of the universe, money printing causing no inflation. "It won't happen here!" It's not us doing money printing.. it's uh.. COVID, uh.. the war, uh.. Climate change, uh.. corporate greed.

pessimizer 4y ago
They should have learned from the hyperinflation in the US that resulted from the vast money printing that happened after the 2008 property bubble burst. I know that inflation for the next decade was sub-2%, but if you think that's low, you're just showing your privilege. You can't dodge gravity.
- hef19898 4y ago
  Hyperinflation is at least double digits month over month for a considerable stretch of time, arguably even more than that. Turkey comes to mind. The Western world is incredibly far from that and was nowhere close to it in 2008.
  - pessimizer 4y ago
    /s
    - poisonarena 4y ago
      what makes hacker news appealing is the very few reddit style, low effort comments. You should explain your viewpoint instead of this cringy /s business, everyone would be richer for it
      - pessimizer 4y ago
        You mistook the /s for an attack on the comment above it, when it was actually a completion of my own grandparent comment. There was not inflation, even when some inflation was desired, after an almost inconceivable amount of money printing. I know it's my own fault for thinking of Poe's Law as a target rather than a pitfall. Sadly, for me satire/sarcasm isn't good unless the target of it sometimes can't tell that it is satire. It's evidence that I've treated them fairly. edit: note that cm2187 understood that, and formulated a direct, thoughtful reply. edit: also note (although you can't see it) that after I explained the "/s" wasn't an attack but an affirmation of the reply that told the truth about hyperinflation, that it wasn't a goldbugging Libertarian smirk, the upvotes started disappearing. Poe achieved.

omegaworks 4y ago

It's no surprise that many former colonies are on this list. Many were subjected to economic retribution from attempting to establish their sovereignty in a hostile global trade environment. Many colonizers imposed enormous debts on colonies in exchange for their freedom[1]. Runaway inflation is one of the many indiscriminate tolls sanctions impose on the people of a country. Why sell the products you produce on your farm to locals when you can ship them overseas and get dollars to exchange for medicine? Medicine that is illegal to produce in your country if your country hopes to operate in the good graces of the WTO[2]. All of this history is condensed by the author into mere "haphazard fiscal policies and civil struggles." This gallery of currencies is a stunning visceral departure point for understanding macroeconomic policy, my only wish is that it went deeper. 1. https://www.nytimes.com/2022/05/20/world/americas/haiti-history-colonized-france.html https://www.nytimes.com/2022/05/20/world/americas/haiti-hist... 2. https://www.wto.org/english/tratop_e/trips_e/pharma_ato186_e.htm https://www.wto.org/english/tratop_e/trips_e/pharma_ato186_e...

sofixa 4y ago
> Many colonizers imposed enormous debts on colonies in exchange for their freedom Which others apart from Haiti had to pay for their freedom?
- mr_toad 4y ago
  The US incurred massive debts fighting the war of independence. They didn’t have to pay for their freedom in reparations, but the cost of the war did lead to massive inflation.

cm2187 4y ago

The beauty of all money being electronic is that it will make it practical to have an hyper-inflation. Which given how irresponsible the central banks and governements are is only a matter of time.

messe 4y ago
Only as long as the central banks don’t run into integer overflow (or poorly implemented bigint algorithms bringing trading to a near standstill)
- cm2187 4y ago
  Well, we all know it's all COBOL. I was born too late to know the answer, I am only in my 40s.
mtoner23 4y ago
Are they really so irresponsible? the past 50 years has been a period of incredible competence in central banking all things considered.
- cm2187 4y ago
  The first 30 of the past 50 years you mean.
- logicchains 4y ago
  Not if you measure competence in terms of how much value the USD lost over the past 50 years vs the 50 years before that.
- prottog 4y ago
  Very quickly off the top of my head, we've had the savings and loan crisis of the 80-90s, Black Wednesday in '92, the Great Financial Crisis, and the European sovereign debt crisis. I don't think the world can handle any more competency in central banking.

janandonly 4y ago

From the end of the article: But the most surprising realization? All but one of the documented episodes of hyperinflation occurred in the last 100 years. I feel that with all the QE going on right now, we might soon add major currencies to this list.

mtoner23 4y ago
What QE? we are in an era of quantative tightening right now actually.
- octoberfranklin 4y ago
  Before departing, Mr. Horse left a note saying to close the barn door.
bee_rider 4y ago
I'm curious how surprising this really is. I mean I imagine most of the documented anythings have happened in the last 100 years, because documentation of everything has gotten so much better over the last 100 years. Not to mention, how do you have hyperinflation with gold bars and barter?
- chrisco255 4y ago
  We have pretty good documentation on the performance of currencies over the past 500-2000 years. It is usually of historical note when an entire nation's economy collapses as a result of hyperinflation.
  - dragonwriter 4y ago
    > We have pretty good documentation on the performance of currencies over the past 500-2000 years. Not “Pretty good” enough to detect hyperinflation by the definition at issue (50%+ monthly inflation.) Before regular, systematic, and frequent collection of data for price indexes, we have good enough data to make wide-range estimates of inflation over intervals of years to decades, in the best cases, but hyperinflation (whether or not it produces collapse of currency) doesn't continue long enough to show up in that, and also hyperinflation tends to correlate with conditions which reduce the availability and survivability of data. (The author of the article here notes a data problem with Yugoslavia in the late 20th century, for instance.)

aidenn0 4y ago

It's not hyperinflation by any means, but it is interesting to me that when federal reserve notes were first issued, there was a $100 bill. That would be roughly $3000 today, and yet many places to this day won't accept bills larger than a $20 and the US has declined to print larger bills due to a worry of large denominations utility in crime.

eloff 4y ago
Just as crazy is that we still have the penny. Worth less than the metal it's made out of. If you see it in the street, you leave it there. When you get home you empty the change from your pockets, and the pennies just end up taking up space in a drawer somewhere. Not worth enough to even bother counting to change at the bank.
- aidenn0 4y ago
  If I could, I would eliminate the penny, nickel, and dime. In terms of value, the dime is a bit iffy, but having to make change with a combination of quarters and dimes would be rather unpleasant, and now that consumer price inflation is going again, the dime should be on its way out anyways.
  - dllthomas 4y ago
    If memory serves, when we got rid of the half-penny it was worth more than a modern quarter. ... memory of the time I looked it up and did the calculation, not memory of the event, of course.
    - aidenn0 4y ago
      My memory is it was somewhere between a nickel and a dime, but that was maybe 15 years ago.
      - dllthomas 4y ago
        Having actually run it again, it looks like more than a dime but less than a quarter.

eth0up 4y ago

I think this could be solved with a hard liquor backed currency. Not some boring metal or fiat hypnosis, but something of intrinsic, unwavering value. It would put things in perspective. And the sense of security from knowing you've got twenty bottles of whiskey in your pocket would assuage the anxiety of knowing you'll never retire or own a house. It might also give us an excuse for our society, which would have some real value too. ONE DOLLAR IN LIQUOR POURABLE TO THE BEARER ON DEMAND

nostrademons 4y ago
Small bottles of alcohol have historically become currency during instances of war and/or hyperinflation - there are reports of this during both the Bosnian war and WW2. The problem with it long-term is that it's a deflationary currency. Liquor gets consumed; once you pay a drunk with a bottle of alcohol, he tends to drink it and take it out of circulation. This means the value of alcohol goes up as the crisis continues, which means people have an incentive to hoard rather than circulate it, which means that it eventually loses its utility as a currency.
- SkyMarshal 4y ago
  I'm not sure about that. It’s relatively easy to make and doesn’t require any particularly scarce materials. It just takes some time to ferment. But the alcohol industry is very good at supplying as much as people will buy. Seems more equilibritory than either deflationary or inflationary.
  - nostrademons 4y ago
    That's another problem for it: for a functioning currency, you really don't want something that's easy for people to "counterfeit" (make themselves). The ideal currency has a stable supply; can only be minted by a monetary authority that does not have a vested interest in spending it itself; is very difficult to destroy; is not perishable or hard to store; and can easily be exchanged in variable denominations. Alcohol is relatively good at the last two points, which makes it attractive during times of crisis when the central monetary authority breaks down, but it's not really durable as a currency.

ilaksh 4y ago

It's been maybe a day since I have had a comment on here buried so I will go ahead and mention cryptocurrency. Hyperinflation is evidence that money needs to be a high technology. Public ledgers in and of themselves don't prevent hyperinflation or other problems with money, but they do give us potentially much more and better tools to make money work. Especially if high tech digital money can be holistically integrated with information about real world resources.

yongjik 4y ago

Interesting, I wonder how many of those 100,000 $(currency) bills are associated with hyperinflation vs. regular run-of-the-mill inflation over a very long time. South Korea has 50,000 KRW bills (= about $36 these days), but its currency has been pretty stable in the past 40+ years.

lm28469 4y ago
> In the end, the researchers unearthed a total of 56 episodes of hyperinflation, many of them previously unreported in English-language works. It needs to be noted that the criterion used in their paper is very strict: a consumer price increase of at least 50% in a month. This excludes countries such as Israel, Vietnam, or Italy, even though they experienced many years of very steep inflation - and in the latter two cases, ended up with banknote denominations all the way up to 500,000.

wuliwong 4y ago

I bought a couple 100 trillion Zimbabwe dollar notes a while back. Been meaning to frame them, just like this. :)

christophilus 4y ago

My brother recently told me that Austrian economics is well known to be a dead end and that no one takes it seriously anymore. I’m curious if that’s really a generally held view among modern economists. It does seem to me the Austrian theories had decent predictive power when it comes to the boom / bust cycles and inflation baked into the current monetary systems.

ogogmad 4y ago
Not an expert but my guess is: A purely deductive approach to economics shouldn't work because economics is not mathematics. Austrian economics is an attempt to justify economic policies many would consider overly individualistic using pure deduction. An example of deduction failing unexpectedly can be found here: https://en.wikipedia.org/wiki/Unexpected_hanging_paradox https://en.wikipedia.org/wiki/Unexpected_hanging_paradox
- christophilus 4y ago
  Maybe I don’t understand the problem, but I don’t see how that shows deduction failing. You can deduce that the time of the event will be a surprise and thus cannot be deduced from the available facts.
mbustamanter 4y ago
Mark Spitznagel wrote a superb book on austrian investing [0] (risk management with an austrian perspective, so not exactly the same). Personally as a mathematician, I prefer this to the economists who think that because the use lagrangians their ideas are somehow more valid, or worse yet, sophisticated. Either case, I don't see why austrian economics get more dirt than say, MMT. EDIT: Spitznagel works with Taleb and his fund, Universa Investments, had a 4000% return at the beginning of the covid-19 pandemic. [0] The Dao of Capital
- eth0up 4y ago
  Any opinion on Friedrich Hayek, particularly The Road to Serfdom? I had difficulty absorbing it and lent it to a book snatcher before finishing. I do remember admiring the bits I thought I understood.

keeganjw 4y ago

I was looking at the bill from Weimar Germany that says "Zwei Billionen Mark" with the caption of "Two trillion mark" and I was like, did they get that wrong? I looked it up and sure enough the German word for trillion is billion! Languages are wild, I wonder how that happened.

macintux 4y ago
Here's some backstory on the UK vs US treatment of that question. https://www.thenakedscientists.com/articles/questions/why-are-uk-and-american-billions-different https://www.thenakedscientists.com/articles/questions/why-ar...
- keeganjw 4y ago
  Oh cool, I didn't know the British used to do that as well!
TazeTSchnitzel 4y ago
It's English that's weird here. In most languages that have the word “billion”, the long scale is used.
- djmips 4y ago
  As mentioned elsewhere - American English.
  - TazeTSchnitzel 4y ago
    I would be very surprised if there's a currently spoken variety of English that doesn't use the short scale. British English switched many decades ago.
actionablefiber 4y ago
In many many European languages the term for a thousand million is "milliard". English is the odd one out here. [1]https://en.wiktionary.org/wiki/milliard#Descendants https://en.wiktionary.org/wiki/milliard#Descendants

batshibstein 4y ago

How are these bills now worthless? I can't go to Zimbabwe today and get 100 trillion dollars (2.6 billion USD) from the currency that they printed that is supposed to be worth that amount?

fzzt 4y ago
Many countries that suffer hyperinflation keep the historical name of their currency, but establish some exchange rate between the "old" and "new" money. Zimbabwe went through four cycles - currency codes ZWD, ZWN, ZWR, and ZWL. Per Wikipedia: "The final redenomination produced the "fourth dollar" (ZWL), which was worth 10^25 ZWD (first dollars)." The ZWL itself was subsequently largely abandoned, too. I believe you'd have more luck transacting in foreign currencies.

Stamp01 4y ago

Oh. I thought this was a different type of inflation gallery. This is still cool, though.

XorNot 4y ago

For whatever reason when I saw this I thought it was going to be an archive of people's predictions of imminent hyperinflation in the West (still hasn't happened guys).

hn_throwaway_99 4y ago

When folks talk about hyperinflation, they often think it is just a case of governments printing too much money. And while that's of course part of it, nearly all cases (maybe all?) of hyperinflation are marked by supply destruction - the economy is no longer able to produce the goods and services needed by the population, so you have the same amount of money chasing fewer goods, and from there things can spiral. Cases in point: 1. In the Weimar Republic, Germany's productive capacity was devastated by WWI. 2. In Zimbabwe, which was "the bread basket of Africa", farm productivity famously plummeted due to the land redistribution policies of Robert Mugabe. 3. Looking at the current crisis in Sri Lanka, the forced switch to organic farming similarly destroyed farm productivity. 4. Though I wouldn't call it "hyperinflation", the COVID pandemic clearly caused shortages throughout the economy. My point is that hyperinflation is rarely just caused by governments living beyond their means - the trigger is nearly always a supply shock, and then it's what governments do in the face of that supply shock that gives you hyperinflation.

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fzzt 4y ago
Yeah, it's usually a combination of these two factors. You live beyond your means for a decade or five, and then something else goes wrong: natural disaster, war, crop failure, sanctions, whatever. Situations that could be survivable otherwise trigger a downward spiral because you were pushing your luck before.
tenpies 4y ago
That's the very dangerous game that Biden is playing with the SPR releases to buy Democrats votes, while simultaneously being very hostile to domestic oil and gas. If there is any sort of supply disruption in oil domestically, it's going to be the perfect storm. OPEC+ will be all too happy to have "maintenance issues" that same week and boom, $300 barrels of oil for the US, a functionally empty SPR, and we get to witness that mix of incompetence, desperation, and power that results in catastrophic ideas. For maximum devastation, this happens close to the Presidential elections.

stefantalpalaru 4y ago

wslh 4y ago

Why does it miss Argentina hyperinflation in 1989-1990? [1] [1] https://www.cambridge.org/core/journals/journal-of-latin-american-studies/article/abs/centralbank-distress-and-hyperinflation-in-argentina-198990/2DE46241D4627A2D6A28B9EBE955FA15 https://www.cambridge.org/core/journals/journal-of-latin-ame...

lucb1e 4y ago
It seems to just be the collection OP was able to buy, not an exhaustive list of events?
Izkata 4y ago
Per [0] Argentina's yearly inflation rate hit 300%, and per another comment [1] they only included monthly inflation rates >50%. Seems like if they did know about it, Argentina's hyperinflation wouldn't have been bad enough to be included. [0] https://www.citeco.fr/10000-years-history-economics/contemporary-world/hyperinflation-in-argentina https://www.citeco.fr/10000-years-history-economics/contempo... [1] https://news.ycombinator.com/item?id=32897119 https://news.ycombinator.com/item?id=32897119
- wslh 4y ago
  Between 1989 and 1990 there was an inflation of 3079% and 2314% respectively: [1] [1] https://es.wikipedia.org/wiki/Inflación_en_Argentina https://es.wikipedia.org/wiki/Inflación_en_Argentina (in Spanish)

Daub 4y ago

Here in Vietnam the smallest note in 100vnd (around 40 cents). The number of zeros in VN currency can be confusing. The largest is 500,000. In shops tills, the per-item value is larger than the total because there is not enough room to display the total. As an extra layer of joy to the uninitiated, in speech we often abbreviate the millions to hundreds. Hence 200,000,000 becomes 200.

bawolff 4y ago

> But the most surprising realization? All but one of the documented episodes of hyperinflation occurred in the last 100 years. I was under the impression that in olden times currency was backed by gold (or something similar). How would hyperinflation occur in such a situation?

jansan 4y ago

"B. Pengö" means "Billion Pengö", but with a European "Billion", which would be a trillion Pengö in American counting. So the printed, but never circulated "1.000.000.000 B.-Pengő" bill was actually "worth" 10^21 Pengö. When Hungary introduced the Forint in 1946, the exchange rate was 1 Forint = 400.000.000.000.000.000.000.000.000.000 Pengő. That's at least what German Wikipedia says, no matter how incredible it may sound.

richrichardsson 4y ago

Does anyone know what happens after these hyperinflationary periods with the notes? Are they made illegal tender? For example I was curious about if you held onto a 10 million Ruble note when it was "worthless" until the point the Ruble recovered, is that note still legal tender and has your "investment" appreciated?

rory 4y ago
In the case of Germany, they invented a new currency worth a lot more and allowed exchange at a gov't-determined rate (they actually did this a few times).
vikingerik 4y ago
Basically, yes, old notes become nonlegal tender. Hyperinflation is resolved by the government issuing a new currency (sometimes with the same name as the old one), and allowing conversion to the new one, at whatever extreme ratio like 10e6 to 1 or whatever. The conversion lasts for a limited time and then any notes existing after that are no longer accepted as fiat currency.

chris123 4y ago

Inflation and hyperinflation are monetary problems. The would needs hard money for the digital age. The world needs the Bitcoin standard.

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fallingfrog 4y ago

Typically, hyperinflation is caused by a country trying to print money to pay a debt denominated in an external currency. (Because, the more money you print, the worse the exchange rate gets, so you have to keep printing more and more.). And very often, the crisis is related to imf loans taken under duress. (Venezuela, Zimbabwe, etc etc). Read “confessions of an economic hit man” if you want to know more about how that happens.

everybodyknows 4y ago
This could be generalized as structural inability to collect taxes commensurate with politically mandatory disbursements, less net new foreign borrowing. Consider for example the post-Soviet Eastern European hyperinflation mentioned: > ... fallout from the collapse of the USSR
- fallingfrog 4y ago
  I get where you’re coming from- but I still think it’s more specific than that. Take Yugoslavia. They took out imf loans right before their hyperinflation. What you describe definitely causes inflation, but the “hyper” part, in every case I am aware of, involved foreign debts.

GatorD42 4y ago

That collection doesn’t include the largest denomination, the 100 quintillion pengö note that Hungary issued. That was during worst hyperinflation ever recorded and my family lived through it, so I collected some of notes, including a 5 pengö note from before and the 100 quintillion note from the end. See Wikipedia page https://en.wikipedia.org/wiki/Hungarian_peng%C5%91#Hyperinflation https://en.wikipedia.org/wiki/Hungarian_peng%C5%91#Hyperinfl...

gkya 4y ago

"Our belief in the power of personalities and ideas may blind us to fundamental truths: after all, every year, another penniless revolutionary pens a new version of Das Kapital or a new version of Mein Kampf." I won't bother with the bullshit of anybody who compares Das Kapital and Mein Kampf like this, grow a fucking brain. And conscience.

tasuki 4y ago
The section you quoted hasn't compared the two works. You're getting outraged quite needlessly.

iamnotsure 4y ago

It's not a bug, it's a feature.