Worst case of hyperinflation: Yugoslavia 1993~1994

[Pb]

Within 1 year and 4 months, the Yugoslavian Dinar inflated by 5,000,000,000,000,000%.

http://www.rogershermansociety.com/yugoslavia.htm

[ChArBrOiL]

Bringing its grand total worth to a whopping 1/10000 of one US Dollar!

[DeyC3]

are there really people who still dont understand that economic functions are a force of reality?

[.pi.]

I went to Serbia, to meet a friend, in 2003. She gave me a bank note that was still valid currency in Serbia in 1994. The nominal value of that bank note is five hundred billion dinars. In reality, it's worth 2 euros (or about $2.5 or so).

When I talked about it with her mother, she said that shops changed their prices twice a day; once in the morning, and once in the evening. The only way to have money that kept its value was to change all your dinars to some other currency, like German marks like she did. Bad thing for those with lots of savings, but an absolute blessing to those in debt. My friend's mother bought an approx. 80m2 apartment for 216 German marks. She also spent insane amounts of money with cheques, since she knew the debt will be nothing in a matter of days.

Here's a photograph of the note:



.pi.

[.pi.]

Ok, let's try again. Here's a pic of the note:

[Pb]

I wonder if it cost more for them to print the money.

[stub]

Originally Posted by .pi.

I went to Serbia, to meet a friend, in 2003. She gave me a bank note that was still valid currency in Serbia in 1994. The nominal value of that bank note is five hundred billion dinars. In reality, it's worth 2 euros (or about $2.5 or so).

When I talked about it with her mother, she said that shops changed their prices twice a day; once in the morning, and once in the evening. The only way to have money that kept its value was to change all your dinars to some other currency, like German marks like she did. Bad thing for those with lots of savings, but an absolute blessing to those in debt. My friend's mother bought an approx. 80m2 apartment for 216 German marks. She also spent insane amounts of money with cheques, since she knew the debt will be nothing in a matter of days.

Here's a photograph of the note:

Awesome story!

I never realised things could get to the point of changing prices twice a day.

The same thing happened in Germany after the second world war; no surprise there.

As for changing your currency into marks, or something else, does this mean that the amount of exchange bureaus around the country would explode? Anyone who owned one would become rich, even?

[Pb]

Originally Posted by stub

As for changing your currency into marks, or something else, does this mean that the amount of exchange bureaus around the country would explode? Anyone who owned one would become rich, even?

Unless this exchange bureau quickly dump the useless Dinar on someone else or get into the recycling business, I don't see how they can become rich sitting on a mountain of paper. ^_^

[stub]

Originally Posted by Pb

Unless this exchange bureau quickly dump the useless Dinar on someone else or get into the recycling business, I don't see how they can become rich sitting on a mountain of paper. ^_^

Commission.

In a healthy economy, money gets changed X times a day.

In that ridiculous economy, the number of transactions might be 500X as everyone is changing money, all day.

On each transaction, the bureau gets a commission, hence why I thought they might become rich.

[OTTI]

Inflation 1923-24:

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



The caption from a photo in the Wikipedia article on Hyperinflation:

http://en.wikipedia.org/wiki/Hyperinflation

[Pb]

Originally Posted by stub

On each transaction, the bureau gets a commission, hence why I thought they might become rich.

It kind of make sense, but I failed to get it when I try to think through the entire process:

Suppose the bureau agrees to change 1,000,000 Dinars for 10 Marks, taking a 10% commission (making a 1 Mark commission); but in actual physical property, they are out 10 Marks and they gain 1,100,000 Dinars in return, which turn to less that 11 Marks overnight. I can't see how they are making money in actual terms, unless they can quickly turn the Dinars into something else.

[Electronica Dancer]

my collection...