The World's Most Worthless Currency

[Hon'ya-chan]

http://www.portfolio.com/slideshows/...orthless-Money

[Plaidman]

I don't think I'll ever understand inflation. How does something lose its value?

[lordlundar]

I don't think I'll ever understand inflation. How does something lose its value?

In standard inflation, the government allocates a certain amount of money to print/stamp every year to replace old currency. This number is never accurate and is always made on the side of caution, so there's typically more out there as a result. As well, stock fluctuations cause a product to be worth more in a currency, and in the case of economic vitals like oil or gold, it affects the price of everything. Those two factors make up the bulk of the inflation.

The article in the topic is a stupidity cycle called hyperinflation.

Government decides there isn't enough cash flowing in the country, so they print more. The problem is, the products worth doesn't change, and as more people have more cash, the prices go up. The Government sees this and decides to print more money to offset it. This keeps going until either:

1) The government decides to stop printing more money.
2) The people decide to be more conservative with their spending.
3) The economy implodes.

Usually it's the first 2 incidents that stop it, but failing those, the third is what's coming.

Germany was like that after WW1, where they decided to up their Gross Domestic Value by printing more Marks. It then went into that cycle and got to the point where you needed 1,000,000,000 Marks to buy a candy (yes, that is one billion. The ratio hit $1US = 4,000,000,000,000 Marks. I've seen pictures of a child hauling a wagon full of bills just to buy a candy. With the change in government shortly after the war, there came a change in currency to the Rentenmark, which had no gold behind it, so land was used to bring it up to a reasonable ratio. It was replaced By the Reichsmark a year later to accommodate the new government. It retained it's status until after WW2 where the Deutsche Mark and East German Mark came about. The Mark became so worthless that even today, it is the only currency in history to command no worth, even to collectors.

Wow. Did I ramble. But the point is, it's always been a case of the government trying to be sneaky and make themselves appear more wealthy than they are. The problem is that Gold is used as international currency so without it, it's a failed attempt that they try to fix by printing even more money.