Saturday , 16 December 2017


These 5 Currencies Experienced Hyperinflation – Here’s Why

In the following infographic we look at 5 occasions when bth_hyperinflation currencies crashed in a big way. In each of these scenarios, war was the primary cause or played a major role in the Government deficit that led to hyperinflation.

 

The comments above and below are excerpts from the original article/infographic by commodity.com which has been edited ([ ]) and abridged (…) by munKNEE.com – “ The internet’s most unique site for financial articles! (Here’s why)” to provide a fast & easy read. For all the latest – and best – financial articles sign up (in the top right corner) to receive our free bi-weekly Market Intelligence Report newsletter (see sample here) or visit our Facebook page.

Hyperinflation occurs when a country experiences very high rates of inflation, which erodes the real value of the local currency, and causes the population to minimize their holdings of local money.

It is argued that hyperinflation often occurs as a result of some kind of stress on a Government’s budget. This is because the root cause is a large Government deficit which is financed by money creation rather than other options like increased borrowing or higher rates of taxation.

Interestingly, if we examine all the documented instances of hyperinflation throughout history (extending as far back as the Romans), the same is often true – funding wars or funding the clean up from wars creates a huge deficit that often leads to massive currency devaluation.

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