Currency > Hyperinflated Currencies

The definition of Hyperinflation is when a country experiences very high and rapidly accelerating prices of goods and services (as denominated in the local currency) that exceed 50% a month.  The exponential nature of price increases during hyperinflation distinguishes it from other types of inflation.

There are four common types of inflation:

  1. Creeping Inflation (less than 3% per year)
  2. Walking Inflation (3% to 10% per year)
  3. Galloping Inflation (more than 10% per year)
  4. Hyperinflation (more than 50% per month)

Hyperinflation very rapidly erodes the value of the currency to near 0 in the very short term.  When this happens the residents attempt to dump their paper money, however they are often too late and unable.  With slower progressing inflation, such as Creeping or Walking Inflation, the population of a country has more time to transfer wealth to foreign currencies that they view as being more stable, other objects of value, or hard money assets such as silver and gold. 

Most Economists believe that hyperinflation is caused by large persistent government deficits financed primarily by money creation (money printing) rather than by borrowing or by increasing taxes.  As such, hyperinflation is often associated with stresses to a government’s budget, such as long-term wars or their aftermath, sociopolitical upheavals, a collapse in export prices, or other crises that make it difficult for the government to collect tax revenue.  A sharp decrease in tax revenue coupled with a strong need to maintain government spending, together with an inability or unwillingness to borrow, can lead a country into hyperinflation.  Sounds vaguely familiar, doesn’t it? 

Listed below are the most severe hyperinflation events in world history. The events are listed in order of the highest daily inflation rate (and the most rapid price doubling time).  The three most recent hyperinflation events are Venezuela in 2018, Zimbabwe in 2008, and before that, Yugoslavia in 1994.

Item: 2008 Zimbabwe One Hundred Trillion Dollar Note
Estimated Number Known: Unknown
Links to Full Size Images: Obverse / Reverse

2008 $100,000,000,000,000.00 (One Hundred Trillion Dollar) Reserve Bank Note


  1. By October 2008 Zimbabwe was mired in hyperinflation with wages falling far behind prices.
  2. Zimbabwe’s government, kept issuing notes in higher and higher face values, as the currently quickly lost value.
  3. The largest face value note issued was the One Hundred Trillion Dollar note, which is valueless today as currency.
  4. Hospitals, schools, and businesses had chronic staffing problems because staff could not afford bus fare to work.
  5. Hyperinflation in Zimbabwe was one of the few instances that resulted in the total abandonment of the local currency.
  6. Desperate for foreign currency to keep the government functioning, Zimbabwe’s central bank governor, Gideon Gono, sent runners into the streets with suitcases of Zimbabwean dollars to buy up American dollars and South African rand.
  7. Valueless ten years ago, now an aftermarket has appeared for these notes as collectors items.  I bought my example for $8 back in 2011 on eBay, but now they are selling $100 or more on auction sites as collectors desired to capture this piece of history chronicling a recent hyperinflation event.

Editorial on Inflation in the United States

I am still somewhat baffled by the U.S. Federal Reserve target of 2% inflation per year here in America.  This would fall under the “Creeping Inflation” category noted in the introduction above.  What this means is every 10 years, the U.S. Dollar would lose 10% of its value.  This has a devastating effect on the value of the dollar over longer periods of time (decades).   Shown below is the loss of value of the U.S. Dollar from 1913 to 2013.  If you baseline the dollar having the value of one dollar in 1913, our same U.S Dollar only has a value of a nickel today.  This can be seen in how many more dollars it takes to buy things today, than it did years ago.  In 1968, new cars cost $2.000 and houses cost $12,000.  Today, new cars cost $30,000 and houses cost $300,000.  I’ve never heard a good explanation on why the government insists on forcing inflation into our monetary system (unless they are trying to inflate away the national debt?).  That policy certainly doesn’t seem beneficial to the population as a whole — and certainly hurts “savers”.  So even Creeping Inflation of less than 3%, as we have in the U.S., I view as detrimental.