The hyperinflation gallery

We try to build our understanding of history through the study the lives of our leaders and the tenets of the ideologies they preached. But over time, their biographies morph into myths and their ideas turn into slogans; the complex and chaotic reality gets twisted into a fairy tale of predestination and valor - as told by the ones who prevailed on the battlefield.

On some level, I also wonder if our faith in the power of personalities and ideas blinds us to fundamental truths: after all, every year, another penniless revolutionary pens a new version of "Das Kapital" or a new version of "Mein Kampf". There is some invisible force that relegates most of them to the dustbin of history, and puts others at the forefront of the world's most consequential and most reviled regimes. To get a sense of this force, I sometimes turn to the history of things: the insights into the needs, the desires, and the fears of regular people caught in the crosswinds of history, as told through the items that accompanied them in their everyday lives.

From that perspective, the story of money is a particularly fascinating one: for example, the decline of the world's greatest ancient empires is drily chronicled by the shrinking weight and purity of the coins they left behind, while the misery of the Weimar Republic in the interwar period is plain to see in the stacks of worthless trillion mark bills that lined the streets.

This topic is close to my heart because some 28 years ago, I experienced one such currency crisis first-hand: in my home country of Poland, many decades of oppression and economic blight culminated in a bout of hyperinflation that caused consumer prices to jump some 600% in a matter of months. I wanted to show the now-worthless banknotes from that era to my kids - a sort of a gimmicky teaching prop. This sent me down the rabbit hole of first stumbling onto, and then looking for, other examples of hyperinflationary banknotes - finding some that are well-known, and some that remain quite obscure:

My first haul, now neatly framed on the wall, included a 1 million drachmai bill (Greece, 1944); 10 quintillion (!) peng§ (Hungary, 1946); 500 million Krajina dinara (Croatia, 1993); 100 trillion dollars (Zimbabwe, 2008); 2 trillion mark (Germany, 1923); 50 billion dinara (Yugoslavia, 1993); 1 million pesos (Argentina, 1982); 2 million z│otych (post-Soviet Poland, 1992); 5 million zaires (Zaire, 1992); and 1 million intis (Peru, 1990).

Despite being quite content with this display, my curiosity got the better of me, and after spending several more days on eBay, I came up with quite a few additional examples of currencies that joined the "one million club". My second hunt netted this - as of yet unframed - haul:

In rough order, we have 5 million lei (post-war Romania, 1947); 1 million larus (Georgia, 1994); 10 million marek (interwar Poland, 1923); 1 million karbovantsi (Ukraine, 1995); 5 million cordobas (Nicaragua, 1990); 50 million Transcaucasian rubles (proto-USSR, 1924); 100 million dinara (Bosnia and Herzegovina, 1993); 5 million pesos (Bolivia, 1985); 1 million mark (Free City of Danzig, 1923); 1 million rubles (Belarus, 1999); 1 million lira (Turkey, 1995); and 1 million kwanzas (Angola, 1995). I accidentally left out two more from the picture: 1 million lei (modern-day Romania, 2003, example) and 1 million gold yuan (China, 1949, example).

But that's not all! Many other countries avoided the stigma of joining the "million club" by repeatedly shaving zeroes off their currencies (a process called "redenomination"), or by getting their inflation problem under control in the nick of time. I found quite a few examples of currencies that made it into the hundreds of thousands - probably necessitating a third framed display to be built:

Roughly in order, the photo features 100 thousand guaranies (Paraguay, 2004); 100 thousand pesos (Mexico, 1991); 100 thousand lire (Italy, 1983); 500 thousand dong (Vietnam, 2003); 100 thousand rubles (Russia, 1995); 100 thousand dram (Armenia, 2009); 100 thousand dobras (Sao Tome a Principe, 2010); 100 thousand bolivares (Venezuela, 2017); 100 thousand rupiah (Indonesia, 2013); 400 thousand cruzeiros (Brazil, 1993); 100 thousand sum (Uzbekistan, 2019); 100 thousand livres (Lebanon, 2001); 100 thousand meticais (Mozambique, 1993); 200 thousand pesos (Uruguay, 1992); and 100 thousand riels (Cambodia, 2012). There are several more I am hoping to add: 100 thousand kronen from Austria (example), 100 thousand kips from Laos (example), 100 thousand pesos from Colombia (example), 100 thousand rubles from the breakaway state of Transnistria (example), 100 thousand rials from Iran (hard to find in the US due to embargos) - and possibly more. There is also a very rare 100 thousand reis banknote from Portugal (example), but it is quite pricey these days.

When I look at all these examples - a total of 45 - I find the list quite startling. Most of the sources that discuss hyperinflation name just a handful of well-known episodes: Hungary, the Weimar Republic, Zimbabwe. Yet, the prevalence of ultra-high-denomination notes tells a strikingly different story about the stability of our financial systems. It feels like a strangely under-developed field of research, too; one would expect that the study of hyperinflation would be one of the cornerstones of contemporary monetary policies. Of course, there are countless treatises on dwelling on select well-known examples - but there are scarcely any works that try to systematically assess the causes and the incidence of such events throughout the ages.

After quite a bit of digging, the best source I could find was an obscure and seldom-cited "working paper" put together by the Cato Institute in 2012. The authors devote many pages to bemoaning the absence of reliable sources on this topic, even for incidents that occurred fairly recently and in the developed world. For example, for the former country of Yugoslavia, they had this to say:

"For months, we pored over reports from the International Monetary Fund (IMF), the World Bank, the U.S. government, the Central Bank of Bosnia and Herzegovina, and Bosnia and Herzegovina's Federal Office of Statistics (FZS), and we were still unable to find the monthly data. We also consulted numerous officials from local and international agencies, but, by all accounts, the information had simply not survived the war."

In the end, the researchers painstakingly unearth a total of 56 episodes of hyperinflation, many of them previously unreported in English-language works. It needs to be noted that the criterion used in their paper is very strict: a consumer price increase of at least 50% in a month. This excludes countries such as Israel, Vietnam, or Italy, even though they experienced many years of very steep inflation - and in the latter two cases, ended up with banknote denominations all the way up to 500,000.

Hyperinflation and societal turmoil go hand-in-hand; the episodes highlighted in the paper - and showcased above - are often associated with the rise or fall of authoritarian regimes and with civil war; communist and socialist systems account for about one half of the total, but right-wing dictatorships have a strong showing, too. Overall, you can clearly identify several major clusters: the fallout from the collapse of the USSR is by far the largest one, robbing dozens of moribound economies of their competition-free Eastern Bloc markets and exposing them to the realities of free trade. The run-up to and the aftermath of WWII forms another cluster - perhaps a more consequential but also a much smaller one. And in the past several decades, the haphazard fiscal policies and the civil struggles in South America and Africa come to dominate the list.

But the most surprising realization? All but one of the episodes of hyperinflation occurred in the last 100 years.

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