Saturday, January 19, 2008

How to be a... Zillionaire!

Zimbabweans will be soon lining their pockets with 10-million-dollar bills.

The central bank announced Thursday it would increase the denomination of the nation's highest bank note more than tenfold to keep pace with the world's highest inflation rate, officially estimated at 25,000 percent annually. Independent financial institutions say real inflation is closer to 150,000 percent.

The new 10-million note is the equivalent of about $4 at the dominant black market exchange rate. (via J-Walk)
Even this pales in comparison to the runaway hyperinflation that struck post-World War I Germany in 1923, where the inflation rate was over 3,000,000% per month, which works out to prices for everything doubling every 49 hours.

Here's a brief look at some examples of German currency during this period and what you could expect your money to fetch. Stories are told of people carrying their money around in wheelbarrows instead of wallets, though in point of fact, suitcases were the preferred method of transport.

German 100,000,000,000 mark note, which,
by November 15, 1923 would buy 2 glasses of beer.
Bread is 80,000,000,000 Mark a loaf.

A German woman feeding a stove with
currency notes, which burn longer than
the amount of firewood they can buy.

FYI: You may not be aware that there is an American and a European system of number naming. They agree up to the millions, but after that, what Americans call a billion, Europeans call a milliard. Wherever possible, I will include the scientific notation or the actual written out number.

And if you think that's as bad as it can get, think again. Hungary during 1945-1946 experienced a stunning rate of inflation of 41,900,000,000,000,000% (almost 4.19 * 1016% ) per month, which works out to prices doubling every 15 hours or so.

The first series of pengo banknotes (Hungary's unit of currency) were printed in 1926 with the following denominations: 5 P, 10 P, 20 P, 50 P, and 100 P. By 1946, notes of 100 quintillion pengo (1 * 1020) were being issued. At some point, there were too many zeroes to fit on the bill, and they had to resort to telling how many milpengo (1,000,000 pengo) or bilpengo (1,000,000 milpengo or 1,000,000,000,000 pengo) the note represented.

A gallery of some of Hungary's currency during this period.

Banknotes not worth the paper they were printed upon.

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