Hyperinflation: And the 11-Zero Bank Note!

From Chris Gaffney, CFA and Vice President of World Markets at EverBank

What's Happened:

A story in this week's Economist magazine really demonstrates the possible impacts of runaway inflation.

Zimbabwe, has been experiencing hyperinflation. Stuck in a political and economic quagmire, the country recently introduced a new banknote. Last week Zimbabwe's central bank unveiled a 100 billion dollar banknote to cope with inflation. That is a bank note with 11 zeros!

What I Say:

But as crazy as this sounds, the Zimbabwe dollar banknote still doesn't hold the all-time record. A note issued in post-war Hungary came with a mind-boggling 19 digits!

Thankfully the U.S. is not yet in this type of situation. But still the situation in Zimbabwe and post-war Hungary should be a reminder of what can happen in a country if the central bank continues to ignore inflation.

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