Friday, February 24, 2017

Nobody beats Hungary. Nobody.

Over the past two centuries the world has seen quite a few outbreaks of hyperinflation. (by the way, the rather arbitrary definition of hyperinflation is inflation of 50% or greater per month. That's bad but hardly the usual "your money loses half its value in hours" thing you think of when you hear "hyperinflation") After WW1 there was a whole rash of them in Europe with Germany of course the best known. When the new "Rentenmark" was introduced in late 1923 it was equal to 1,000,000,000,000 old marks, so 12 zeroes got crossed off. That was pretty impressive! The USSR went through its own hyperinflation, of course, and when the new gold ruble was equal to 50,000,000,000 old rubles so a little over 10 zeroes. Still pretty good.
Later there were outbreaks in China, Greece, several Latin American and African countries of which Zimbabwe had a good one, too. Before Zimbabwe essentially gave up on having a national currency they were on their fourth "Zimbabwe dollar", and somewhere along the way a banknote of 100,000,000,000,000 Zimbabwe dollars was issued, which is a popular item on eBay.
But the record is still Hungary after WW2. The amazing thing there is the speed with which everything happened. On May 1, 1945 the first postwar rates were introduced and the inland letter rate was set at 1 Pengö. By early January 1946 it was 600 Pengö, which is impressive but after that, things just became surreal. What was particularly interesting was the Hungarian government's attempts to keep renaming the currency. So the Pengö was followed by the ezerPengö (1000 Pengö), the MilPengö (1,000,000 Pengö), the Milliard Pengö (1,000,000,000 Pengö) and the BilPengö (1,000,000,000,000 Pengö). By now we're in early July 1946. That's right, the letter rate went up by a factor of about 60 billion in 6 months! July 1946 then just went further into funny numbers, with the introduction of an adoPengö ("tax-Pengö") not really helping. When the Forint was introduced on 1 August 1946 the stabilization rate deleted TWENTY-NINE ZEROES.

This (second - they had a first run at it post-WW1) Hungarian Hyperinflation is of course very interesting philatelically as well. The Collector's Club of Chicago has published a really nice book on the subject which is available free as an e-book too. Recommended reading!