{"id":602,"date":"2024-09-02T04:15:54","date_gmt":"2024-09-02T11:15:54","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=602"},"modified":"2024-09-09T07:08:27","modified_gmt":"2024-09-09T14:08:27","slug":"18-scary-things-you-didnt-know-about-inflation-and-hyperinflation-2","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id602-18-scary-things-you-didnt-know-about-inflation-and-hyperinflation-2.html","title":{"rendered":"Hyperinflation Facts: 18 Strange Things You Probably Don&#8217;t Know"},"content":{"rendered":"<div id=\"attachment_45285\" style=\"width: 405px\" class=\"wp-caption alignright\"><a href=\"https:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2017\/10\/wheelbarrow-wallet.png\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-45285\" class=\"wp-image-45285\" src=\"https:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2017\/10\/wheelbarrow-wallet.png\" alt=\"hyperinflation fact\" width=\"395\" height=\"310\" srcset=\"https:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2017\/10\/wheelbarrow-wallet.png 992w, https:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2017\/10\/wheelbarrow-wallet-300x235.png 300w, https:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2017\/10\/wheelbarrow-wallet-768x602.png 768w\" sizes=\"auto, (max-width: 395px) 100vw, 395px\" \/><\/a><p id=\"caption-attachment-45285\" class=\"wp-caption-text\">Fun hyperinflation fact: During the Weimar hyperinflation event of the early 1920s, wheelbarrows replaced wallets.<\/p><\/div>\n<p>The US National Debt recently surpassed $35 trillion. Not surprisingly, the world is finally losing faith in our currency, as evidenced by the emergence of the <a href=\"https:\/\/www.bricfoundation.org\/summit\" target=\"_blank\" rel=\"noopener\">BRICS trading bloc<\/a> and its intention to introduce a new currency based on gold and, potentially, additional commodities. When that happens, the sell-off of &#8220;the almighty dollar&#8221; will begin in earnest. And as those dollars return to America, prices will increase at a rapid pace. That&#8217;s not a hyperinflation fact, <em>per se<\/em>. Nevertheless, it <em><strong>is<\/strong><\/em> a possibility.<\/p>\n<p>For those who are looking for some fun hyperinflation facts, here&#8217;s a primer that explains this frightening event. It also highlights what we can expect if hyperinflation ever comes to America:<\/p>\n<ol>\n<li>Hyperinflation occurs when people <a href=\"https:\/\/lenpenzo.com\/blog\/id24963-economic-collapse-101-currency-vs-real-money-2.html\" target=\"_blank\" rel=\"noopener\">lose confidence in their currency<\/a>; it is cash in its death throes. As a result, they spend it as fast as they can &#8211; while it&#8217;s still worth something.<\/li>\n<li>As a currency enters its hyperinflationary death spiral, people naturally begin spending their increasingly-worthless cash on as many tangible goods as possible &#8212; whether they need them or not.<\/li>\n<li>Gold, silver, income-producing real estate, and fine art are the most effective ways of <a href=\"https:\/\/lenpenzo.com\/blog\/id16252-silver-and-gold-the-superheroes-of-wealth-preservation.html\" target=\"_blank\" rel=\"noopener\">preserving wealth<\/a> during hyperinflation. For those who are less well-off, consumer goods such as canned food, alcohol and cigarettes are effective hedges.<\/li>\n<li>Profiles in Cowardice: Hyperinflation takes time to manifest itself. It usually occurs only because affected leaders refuse to enact the painful policies typically required to solve the problem.<\/li>\n<li>Hyperinflation is probably more common than you think. Worldwide, there have been 56 hyperinflation events since 1900. Venezuela is the most recent example; other recent hyperinflation events include Argentina and Brazil in 1989, Russia in 1992, and Yugoslavia in 1994.<\/li>\n<li>Since 1913 <a href=\"http:\/\/www.inflationdata.com\/Inflation\/Inflation_Rate\/Long_Term_Inflation.asp\" target=\"_blank\" rel=\"noopener\">the average rate of inflation<\/a> in the United States has been slightly more than 3.5% per year. At that rate, prices double every 21 years. Unfortunately, since 2021, the average inflation rate has been much higher.<\/li>\n<li>Economists officially consider an economy to be hyperinflationary when prices increase 50% <strong><em>per month<\/em><\/strong>.<\/li>\n<li>Zimbabwe dealt with hyperinflation between 2006 and 2009. How bad was it? During the <strong><em>month<\/em><\/strong> of March 2007 the inflation rate there was 1730%. To put that in perspective, a $2 loaf of bread on March 1st would have cost $37 on the first day of April.<\/li>\n<li>By November 2008, <a href=\"http:\/\/www.cato.org\/zimbabwe\" target=\"_blank\" rel=\"noopener\">the annual inflation rate in Zimbabwe<\/a> was 89.7 sextillion percent. That&#8217;s 89.7 followed by 20 zeros. At that rate, prices were doubling every 24 <strong><em>hours<\/em><\/strong>.<\/li>\n<li>To keep up with inflation, the Zimbabwe Treasury printed bills with denominations as high as one hundred trillion dollars. (For a pictorial presentation of life in Zimbabwe with their astronomically-high currency denominations, check out <a href=\"http:\/\/www.oilempire.us\/zimbabwe.html\" target=\"_blank\" rel=\"noopener\">this link<\/a>.)<\/li>\n<li>The largest bank note denomination ever to be placed into circulation belongs to Hungary, which issued a 100 quintillion pengo note during its hyperinflation event in 1946. In case you&#8217;re wondering, &#8220;100 quintillion&#8221; looks like this: 100,000,000,000,000,000,000. How&#8217;s <em><strong>that<\/strong><\/em> for a hyperinflation fact?<\/li>\n<li>Perhaps the most famous example of hyperinflation is the one that struck Germany&#8217;s Weimar Republic shortly after World War I. The trouble started when Germany stopped backing its currency with gold and fired up their printing presses in order to finance the war. Then the presses continued printing after the war to help pay for reparations imposed upon Germany by the Allies. That was a bad idea.<\/li>\n<li>Immediately prior to World War I, the German mark was trading at a value of roughly five to the dollar. Less than a decade later, it took one trillion marks to buy a single dollar &#8212; which makes sense when you consider that in 1923 the Reichsbank was issuing <a href=\"http:\/\/www.usagold.com\/germannightmare.html\" target=\"_blank\" rel=\"noopener\">120,000 trillion marks<\/a> <strong><em>per day<\/em><\/strong>.<\/li>\n<li>Before hyperinflation came to the Weimar Republic, the typical household spent 30% of their income on food and 30% on housing. By the time hyperinflation peaked in 1923, food expenses consumed 91% of German household income, while housing expenses fell to just 0.2%.<\/li>\n<li>With that in mind, it&#8217;s no wonder that, as Adam Fergusson notes in his book <em>When Money Dies<\/em>, by 1923 Weimar government officials were being paid in potatoes instead of cash.<\/li>\n<li>From <em>Paper Money<\/em> by Adam Smith: <em>&#8220;Menus in cafes could not be revised quickly enough. A student at Freiburg University ordered a cup of coffee at a cafe. The price on the menu was 5000 marks. He had two cups. When the bill came, it was for 14,000 marks. &#8216;If you want to save money,&#8217; he was told, &#8216;and you want two cups of coffee, you should order them both at the same time.'&#8221;<\/em><\/li>\n<li>No yolk: The hyperinflation in the Weimar Republic was so bad that in 1918 you could have bought <a href=\"http:\/\/mises.org\/daily\/6588\/\" target=\"_blank\" rel=\"noopener\">500 billion eggs<\/a> for the same cash required five years later to buy just one egg.<\/li>\n<li>During the height of the Weimar Republic&#8217;s hyperinflation crisis, consumers found it cheaper to burn the currency than to use it to buy firewood. And as prices soared higher with each passing day, life became more surreal. And you can take that hyperinflation fact to the bank &#8211; in a wheelbarrow, of course.<\/li>\n<\/ol>\n<p style=\"text-align: right;\"><span style=\"font-size: smaller;\">Photo Credit: Public domain<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The US National Debt recently surpassed $35 trillion. Not surprisingly, the world is finally losing faith in our currency, as evidenced by the emergence of the BRICS trading bloc and its intention to introduce a new currency based on gold and, potentially, additional commodities. When that happens, the sell-off of &#8220;the almighty dollar&#8221; will begin [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":45285,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","pmpro_default_level":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[479,489],"tags":[],"class_list":{"0":"post-602","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economic-collapse","8":"category-macroeconomics","9":"pmpro-has-access","10":"entry"},"yoast_head":"<!-- This site is optimized with the 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