The History of Inflation

Examples of Inflation In the Modern World:

​​The most recent example of hyperinflation can be found in Venezuela, after the Communists took over this once free and prosperous country.

Top 10 Examples of HyperInflation and Weaponizing Banking and Money

The Worst Hyperinflation Situations of All Time – https://www.cnbc.com/2011/02/14/The-Worst-Hyperinflation-Situations-of-All-Time.html

How 9 Countries Saw Inflation Evolve Into Hyperinflation – https://www.businessinsider.com/worst-hyperinflation-episodes-in-history-2013-9

1. France, May 1795
   1. Highest monthly inflation: 150%
   2. Prices doubled every 15 days.
2. Greece, October 1944
   1. Highest monthly inflation: 13,800%
   2. Prices doubled every 4.3 days
3. Germany, October 1923
   1. Highest monthly inflation: 29,500%
   2. Prices doubled every: 3.7 days
4. Hungary, August 1945
   1. Prices doubled every: 15 hours
5. China, October 1947
   1. Prices doubled every 5.3 days.
   2. Read the Full Story: After World War Two, China was divided by civil war. Nationalists and Communists battled for control of the country and introduced competing currencies in the process, leaving China’s monetary system fragmented among ten major mediums of exchange in 1948.
   3. Currency took center stage at times during the conflict – Campbell and Tullock (1954) explained that the three governments (including the Japanese occupiers) engaged in “monetary warfare” by attempting to undermine opposing currencies in various ways.
   4. To fund the conflict, the Nationalists resorted to running huge budget deficits, which they eventually looked to cover by printing money, leading to runaway hyperinflation. (this was preceded by abandonment of the silver standard in China in 1935). They even got the Taiwanese central bank involved with the monetization scheme, which caused hyperinflation in Taiwan as well. Learn More At: https://www.businessinsider.com/worst-hyperinflation-episodes-in-history-2013-9#yugoslaviarepublika-srpska-april-1992-january-1994-3
6. Nicaragua, June 1986
   1. Highest monthly inflation: 120%
   2. Prices doubled every 16 days.
7. Peru, July 1990
   1. Highest monthly inflation: 150%
   2. Prices doubled every 13 days
   3. Read the Full Story: Peru had a long battle with inflation in the latter half of the 20th century. During the first half of the 1980s, Fernando Belaunde Terry was president, and Peru was faced with austerity policies imposed by IMF lenders following the Latin American financial crisis that began early in the decade.
   4. Economist Thayer Watkins says the Belaunde Terry administration gave the appearance that it was complying with the reforms recommended by the IMF, when in reality, it was not. The economy was suffering stagflation at the time, and it was blamed on IMF austerity policies by the electorate, even though those policies weren’t actually being followed.
   5. This led to the election of Alan Garcia in 1985 as president. Garcia enacted populist economic reforms that only served to weaken the economy and shut Peru out of international credit markets. Faced with a lack of access to credit and deteriorating economic conditions, sustained high inflation became hyperinflation in Peru. Learn More At: https://www.businessinsider.com/worst-hyperinflation-episodes-in-history-2013-9#yugoslaviarepublika-srpska-april-1992-january-1994-3
8. Yugoslavia, Jan. 1994
   1. Highest monthly inflation: 313,000,000%
   2. Prices doubled every: 1.4 days
   3. Read the Full Story: The fall of the Soviet Union led to a decreased international role for Yugoslavia –formerly a key geopolitical player connecting East and West – and its ruling Communist party eventually came under the same pressure as the Soviets did. This led to a breakup of Yugoslavia into several countries along ethnic lines and subsequent wars over the following years as the newly-formed political entities sorted out their independence.
   4. In the process, trade among regions of the former Yugoslavia collapsed, and industrial output followed. At the same time, an international embargo was placed on Yugoslavian exports, which further crushed output.
   5. Petrovic, Bogetic, and Vujosevic (1998) explain that the newly-formed Federal Republic of Yugoslavia, in contrast with other states that broke away like Serbia and Croatia, retained much of the bloated bureaucracy that existed before the split, contributing to the federal deficit. In an attempt to monetize this and other deficits, the central bank lost control of money creation and caused hyperinflation. Learn More At: https://www.businessinsider.com/worst-hyperinflation-episodes-in-history-2013-9#yugoslaviarepublika-srpska-april-1992-january-1994-3
9. Zimbabwe, November 2008
   1. Highest monthly inflation: 79,600,000,000%
   2. Prices doubled every: 24.7 hours
   3. Read the Full Story: Zimbabwe’s hyperinflation was preceded by a long, grinding decline in economic output that followed Robert Mugabe’s land reforms of 2000-2001, through which land was expropriated largely from white farmers and redistributed to the majority black populace. This led to a 50 percent collapse in output over the next nine years.
   4. Socialist reforms and a costly involvement in Congo’s civil war led to outsized government budget deficits. At the same time, the Zimbabwean population was declining as people fled the country. These two opposing factors of increased government spending and a decreasing tax base caused the government to resort to monetization of its fiscal deficit. Learn More At: https://www.businessinsider.com/worst-hyperinflation-episodes-in-history-2013-9#zimbabwe-march-2007-november-2008-2
10. Venezuela, 2013
    1. Prices rose 41% in 2013
    2. 2018 inflation was 65,000%.