The Worst Hyperinflation in History and the Death of the Hungarian Pengo,Inflation is when money los

The Worst Hyperinflation in History and the Death of the Hungarian Pengo,Inflation is when money loses value over time causing prices to rise. Money is just like any other commodity; it’s value is derived from it’s rarity.  When it comes to fiat currency (paper money that is backed by nothing but trust), money tends to lose value when governments print more of it, the price of goods rises, and thus inflation sets in. When governments print a lot of it at once and money loses value very quickly, hyperinflation sets in.For most of World War II, Hungary was a member of the Axis Powers.  After suffering severe defeats on the Eastern Front, the Hungarian Government quickly went broke, and being an Axis Power, there weren’t many countries it could burrow money from.  In order to fund the war, the Hungarian Government desperately began to print money to pay for expenses.  In 1944 the largest denomination bill was the 1,000 Pengo note. As the war came to a close, expenses only grew as the Hungarian Government had to fund projects to repair and rebuild the war torn country, provide employment for returning soldiers, and fund many new social programs. Government printing accelerated in order to meet the demand for cash.  As a result, the largest denomination bill at the end of 1945 was the 10,000,000 Pengo bill.By this point, hyperinflation was seriously disrupting the Hungarian economy. People saw their life savings instantly made worthless. In order to buy basic supplies like food and groceries, people had to go to stores with wheelbarrows full of bricks of cash. Prices doubled on a weekly basis. By July 1946, Hungarian hyperinflation had reached it’s worst. By then the price of goods doubled every 15 hours and the daily rate of inflation was 195%, making an annual rate of inflation of 41.9 quadrillion percent. During this month, the Hungarian government began printing the largest banknote in history, the 100 million billion Pengo bill, or the 100 Quintilian pengo bill (100,000,000,000,000,000,000 (10^20).In August of 1946, the Pengo had become so worthless that the entire Hungarian money supply of 400 quadrilliard Pengo ( 4×1029 ) had the buying power of 1/100th of an American dollar. On August 1st, the Pengo was declared defunct by the Hungarian government and replaced by the Forint, which was to be exchanged at the rate of 400 octillion Pengo. By then the Pengo had become so worthless that government workers had to be hired to sweep up piles of money from the streets. -- source link
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