0
$\begingroup$

Hungary's hyperinflation I believe was the worst ever at least up until that time and if it was not the very worst in history, any that "beat" it could not have beaten it by much since at its peak, the value of all paper money (not sure about coins) I recall reading was 60 US cents.

But how could this be true? Of course, coins being made of any metal whatsoever would have some intrinsic value, easily exceeding perhaps many tens of thousands of dollars, even if they were made of aluminum or tin. But even paper money can be burnt and the energy content of all that paper would again be worth much more than 60 cents -- people I would guess were in fact burning the money.

The cost of printing the money should not exceed its value -- the ink, paper, labor and distribution are significant costs that should establish a bottom for the value of the currency.

Improve this question
$\endgroup$

1 Answer 1

Reset to default
2
$\begingroup$

Hungarian hyper-inflation: value of all money in circulation was less one US dollar?

There seems to be no credible source corroborating that fact. According to Shutterly at the height of hyperinflation in Hungary the exchange rate was 232 million pengő/$1, and the value of all currency in circulation was about 1.7 million dollars.

That is still very low but I could find no evidence it ever got to the point that value of all currency in circulation was just 0.6 \$. That’s probably just urban myth.

The cost of printing the money should not exceed its value -- the ink, paper, labor and distribution are significant costs that should establish a bottom for the value of the currency.

This is simply not true. Value of anything, money including, can go below its production cost. Value of money depends on supply and demand for the money if demand is sufficiently low the value might drop well beyond production costs.

Improve this answer
$\endgroup$
2
  • 1
    $\begingroup$ The us penny costs more to produce for example. $\endgroup$
    – Alex
    Commented May 26, 2022 at 7:52
  • $\begingroup$ @Alex: is it not profitable if illegal to melt down old copper pennies? My point is, if the fuel value of the Pengo exceeded its buying power, the buying power is set too low. $\endgroup$
    – releseabe
    Commented Aug 28, 2023 at 13:12

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service and acknowledge you have read our privacy policy.

Not the answer you're looking for? Browse other questions tagged or ask your own question.