Hyper-Inflation in 2 Pictures

Friday, May 15, 2009

As hyper-inflation becomes a mass fear of destruction technology not only helps to create freshly digitized money (we would have no tree left standing were it all to be printed) but also offers coloured pictures for the first time.
Here is a picture from the "good old times" I wrote about in 2005.

Hyper Inflation in Germany 1923
PHOTO: Germany had started inflation on purpose in order to inflate its way out of war reparation payments that were seen as overdone by the German industry. At the end of this process - that naturally ran out of control - it was cheaper to burn the billions then to buy firewood for it. This led to mass unemployment and in the end made the murderous ascent of Hitler possible. An empire went under within 3 decades.
Germany, ruined by its loss of WW1 started a process called "monetizing the debt." At the end of hyperinflation 99% of government revenue came fresh off the numerous printing presses running hot and only 1% from tax revenues.
Troy Ounce (hat tip) published this new picture. Doesn't it look great in colour? Hyper-inflation goes 3rd millennium. Who will become the next nation of billionaire beggars?

PHOTO: It took a big bag full o' money like this (no paper left for bags?) to get a burger with chips and a small Coke in Zimbabwe. Photo courtesy of Troy Ounce
Zimbabwe has abolished its own currency earlier this year. People now use South African Rands and Federal Reserve Notes (FRNs) to conduct their financial transactions and shopping (when the super market shelves are not empty.)

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