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The Worst Hyperinflations in History: Hungary

• redbell 3y ago
  > Obviously, the inflation was devastating to the mathematically challenged. At the height of the inflation, prices were rising at the rate of 150,000% PER DAY. By then, the government had stopped collecting taxes altogether because even a single day’s delay in collecting taxes wiped out the value of the money the government collected. That's really a bad day for the government.
  • jfengel 3y ago
    Yeah, but not because of "hyperinflation". Hyperinflation is an effect, not a cause. As the article says, "Half of Hungary’s industrial capacity was destroyed and 90% was damaged. Transportation was difficult because most of the rail lines and locomotives had been destroyed. What remained had either been taken by the Nazis back to Germany or seized as reparations by the Russians." When you have no goods, you have a crisis. Inflation is a consequence of the crisis, but the money problem is immaterial. It's just numbers. Governments can respond in the short term by trying to reconstruct infrastructure and giving IOUs -- which is what "printing money" really is. If it works, the infrastructure gets rebuilt and the economy can start returning to normal. If it doesn't, the paper money is worthless, because there's nothing to buy. Gawping at how big the numbers get isn't useful, because the problem is the lack of product, not the number on the currency. "Biggest hyperinflations" isn't really a meaningful category, because it's looking at the problem from the wrong end. You need to look at what happened to the country's resources and what they were doing to fix it.