STORIES ABOUT INFLATION
After war German inflation  Highest Grossing Films  Moldova   Inflation and Loan Foreign Transfers and Hyperinflation   Hyperinflation_in_Bolivia

Keith  Gordon:
Inflation in Germany After WWI

During the summer my economics teacher told the class a story about hyperinflation in Germany. She told us after World War I Germany experienced severe hyperinflation.

The demand for money in Germany was so high that the government only had time to print money on one side of the bill. She also told us that prices increased by the hour during this period.

While on vacation in Prague a vendor was selling the German currency that was only printed on one side. She bought a bill from the vendor to use as a prop if she ever became a teacher. Unfortunately one of her friends lost the bill.

references
My ec392 professor during summer session II unfortunately i forgot her name.

The List of Highest Grossing Films

It is every producers dream to have his/her project make it into the fifty highest grossing films of all time. The list includes such classics as Gone with the Wind and The Exorcist as well as modern hits such as Titanic and Gladiator. Running from highest to lowest grossing, it is often publicized in the media. A fact that is seldom known about the list is that it is not adjusted for inflation. Thus, Gone with the Wind, which since 1939 has grossed 200 million is not appropriately compared with 1997’s Oscar Winning film Titanic which grossed 601 million. In other words, a films rank in the list does not necessarily reflect its true position on the list. The reason no adjustments are made is due to both a reflection on the differences in ticket prices when comparing two periods as well as a lack of information on how much classic films grossed upon re-release. Taking into account that in 1939 a movie ticket was 50 cents and the fact that Gone with the Wind has made approximately 200 million dollars, its interesting to consider, if adjusted, where it would place in the list( it is thought that if adjusted, the film would easily surpass Titanic).

Source: http://movieweb.com/movie/alltime.html

Inflation in Moldova


When in the late 90s in Moldova (Pridnetrovye, now separate part of Moldova) was hyperinflation, they simply needed more money but the nominal price of printing new was so high that they took the old ones that they had in federal reserve and stamped couple of zeros on them, so instead of forty thousands they could have 4 millions. Money looked really funny, because the zeros were different color also:)

Inflation and Loan


Around 1990 I lived in Moscow with my family. My mother decided to buy a new refrigerator for 5000 rubles (a lot of money back then and the average salary was about 200 rubles) and pay for it monthly for three years. At some point high inflation took place in Russia. The prices and salaries began to grow. People who had large amounts of money in the bank were losing their wealth because their money was losing its value. As time passed by, the prices and salaries eventually grew to be six digit numbers. The refrigerator for which my mother was supposed to pay for three years, she bought it with one salary half a year later since the money lost its real value and the 5000 rubles, which seemed a lot at one point, was worth almost nothing. At some point the government decided to fix the inflation problem by compensating the loss to the people whose money lost value in the banks. The banks were supposed to calculate 40% of the total money that were stored in the bank then convert it from present value (before inflation) to future value (after inflation). Since the whole process look a while, by the time everything was converted, the calculated total was worth very little again because inflation was high and prices and salaries kept growing so the real value of money kept falling. People who had large amounts of money in their savings account lost most of it. Those who owed, repaid their debts very quickly

Foreign Transfers and Hyperinflation


Three years ago a good friend of mine used to work for Chase Manhattan Bank in its foreign exchange department. On a daily basis billions of Dollars were transferred back and forth between Chase and other banks around the world into a broad variety of other currencies. My friend's duties included processing these transactions so that the right amounts were credited/debited to and from the right accounts.  One day he received a transaction whereby 100,000,000 Dollars should be debited from one account and credited to another account in Turkish Lira. At the time the Turkish currency was exposed to hyperinflation - some times the inflation rate was 60 percent PER DAY. The result of this was that the exchange rate at the time was approximately 1,000,000 Turkish Lira to 1 Dollar. This meant that the 100,000,000 USD was the same as 100 trillion Turkish Lira, a number which is a 1 with 14 zeros behind it. All transfers were done electronically and the various amounts had to be written into specific fields. Unfortunately, there was simply not enough space to write a number with 14 digits since the amount field only held 12 digits as a maximum. Consequently, my poor friend had to break the transaction up into 100 smaller amounts (each with "only" 12 digits") in order to carry it out. This took about 6 hours in all since each individual transaction had to include a lot of other banking information. Next day my friend learned to his horror that the Dollar/Lira exchange rate had changed dramatically during the course of his 6-hour ordeal to such a degree that the transaction as a whole was invalid....and had to be carried out again.

Hyperinflation in Bolivia

I am from Bolivia, a country that has a very turbulent economic and political history. In 1985, when I was 5 years old, Bolivia underwent one of the worst inflations in the economic history of the world. At that time, I wasn’t aware of the magnitude of such an economic event but I have some memories that today make realize the effects of inflation on the banking system of my country.
I remember we used to buy bread with lots of bills because they were almost worthless. During hyperinflation, almost nobody had money in any financial institution because the central bank converted dollar saving accounts into pesos (Obviously, I was not aware of that in 1985). I remember we stored lots of sugar, rice and some other non-perishable products in my house. It was better to buy those before prices double or triple the next day. In 1985 Bolivian inflation was 60000 % 1
Before prices started to increase, everybody was expecting the de-dollarization of bank accounts the devaluation of the peso. These expectations increased inflationary pressures even further. Nobody trusted the banks anymore. I remember that year my father bought the house where my family lives currently. He also bought some land outside the city, which he sold after 1987. Now, I understand that buying land was a good strategy. It was safer to have houses and land because pesos were worthless and US dollars were one of the hardest things to find.
Luckily, inflation got under control after one year. However, the measures taken by the government affected thousands of workers who were laid off. After 15 years, people are recovering confidence in financial institutions to a certain extent. However, most of the people, including myself, never recovered enough confidence in the national currency. Today, most checking accounts, time deposits, some employment contracts, leases and even prices in the market are posted in US dollars.

1. Cardoso Eliana. Latin American Economy, Inflation in Latin America.