The Worst Cases of Hyperinflation in the World; Custom Essay Writing

The Worst Cases of Hyperinflation in the World; Custom Essay Writing

 

Hyperinflation is an economical phenomenon explaining the course of abrupt and inconsistent increase in inflation within a country. Hyperinflation occurs when the real value of the country’s currency is eroded and the population is forced into giving away their local currency in exchange of more substantial and consistent currency.

In human history, some countries had experienced worse cases of hyperinflation such as the ones mentioned below:

  1. Hungary: 1946

Probably history’s worst case of hyperinflation, defeated in WWII and having to pay heavy compensations to the Soviets landed the country in the world’s worst hyperinflation. The Allies took charge of Hungarian budget and the reimbursements gorged nearly half of its revenue that led the country in astounding 13.6 quadrillion percent inflation per month, which means the prices doubled every fifteen hours.

  1. Zimbabwe: 2008

In November 2008, the inflation in the country reached to an alarming 79 billion percent, leading it into the hyperinflation zone. The prices doubled every twenty-four hours and the land reforms proposed by Robert Mugabe fueled the situation even further. Because of the devaluing of the country’s currency, the government and citizens started using South African Rand or the US dollar. In that period, a single loaf of bread cost up to 35 million Zimbabwe dollars.

  1. Weimar Germany: 1923

The loss of WWI cost Germany more than they had bargained for as they had to pay heavy debts to the victorious side. But, Germany could not use its fiat currency as the compensation money as it had already lost its value due to substantially huge war borrowings. To tackle the situation, Weimar Germany had to sell its land at significantly low prices for foreign currency that further worsened the situation.

  1. Greece: 1944

In World War II, Greece faced its most difficult financial time ever as the monetary value of its currency went from a substantial level, at the beginning of the war, to three times less than its size, the very next year. The additional burden of Axis soldiers that came with the invasion of Axis powers, forced the government to pay for their financial and life insurance. Their tax revenues dropped dramatically and the national income fall to 70 percent in the initial war years; the country had to print fiat currency, resulting in one of the worst hyperinflation cases.

Conclusively, hyperinflation is caused when the government faces excessive financial burden, usually due to war, times of trouble and upheaval. The prices double at such a startling rate that the people are unable to cope with it and the value of currency falls to nothing.

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