Every once in a while there are really extreme examples of monetary inflation in the world. A past example would be Germany shortly after the first world war. One could even argue that the hyperinflation in post-war Germany was one reason why the Nazis could become so popular, an event that ultimately led to WW2. I’ve used the correct term already: Whenever inflation gets to an extreme, we’re referring to it as hyperinflation.

Hyperinflation is truly a terrible thing to happen to any country in the world, because it means absolute uncertainty for the country’s residents while being one certain way to poverty. Hyperinflation in post-WW1 Germany, to stick with the example, was so bad that when somebody ate a meal at a restaurant he would pay immediately after ordering, because prices would usually rise while he was eating his meal.

Today you can find hyperinflation in Zimbabwe, for instance. I came across a great post in the Daily Speculations blog about Zimbabwe, stating exactly what I wrote about in the paragraph above:

I had lunch in Mutare yesterday, a town in Zimbabwe on the Mozambique border. (…) During the meal, one of my mates was drinking beer — 750ml bottles of Castle Lager (fondly called bombers). He ordered a fifth one, was advised that the price, which when he ordered his first, second, third and fourth ones was 160 million per bottle, had gone up to 340 million per bottle.

During times of hyperinflation you don’t even have the time to eat, because prices increase while you’re eating. The same goes for being paid your wages: You will want to be paid in cash directly after finishing work, so that you can go straight to the shop and buy something to eat.