19 July 2008

A loaf of bread costs $100,000,000,000

Today BBC radio carried a story about the rampant hyperinflation in Zimbabwe. One man who was interviewed said his daily expenses were about 600 BILLION dollars, including 100 billion for a loaf of bread.

The official inflation rate is 2 million percent per year, but most observers feel that is an underestimate. This is reminiscent of the hyperinflation that hit Hungary in 1945-46; here's a chart of the number of billion pengos per one gold franc -

7/9/46 100,000,000
7/10/46 300,000,000
7/11/46 2,000,000,000
7/12/46 10,000,000,000
7/13/46 30,000,000,000
7/15/46 120,000,000,000
7/16/46 500,000,000,000
7/17/46 2,500,000,000,000
7/18/46 6,000,000,000,000
7/19/46 60,000,000,000,000

That's for just a ten-day period.

Yugoslavia experienced hyperinflation in 1993; from October 1993 to January 1995 prices increased 5 QUADRILLION percent (5,000,000,000,000,000%).

In the next couple years the inflation rate in the U.S. will heat up; when it reaches 10-12%, people will talk about "hyperinflation," but that's nothing compared to historic hyperinflations. Wiki has a compilation of these episodes.

Update 01/16/09: Zimbabwe has introduced a Z$100 trillion note.

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