Maybe you've seen this banknote before - it's 100 trillion Zimbabwean dollars and was printed
during a period of extreme hyperinflation in Zimbabwe in the mid to late 2000's.
100 trillion dollars for one banknote sounds like a lot, and well it is, but believe it
or not, this is not the worst hyperinflation the world has ever seen, and this is not the
highest denomination banknote.
That award goes to the Hungarian pengő, a currency with a one sextillion banknote.
So how much even is that?
And how does such a thing occur?
After finding themselves on the losing side of WWI, the Austro-Hungarian Empire was broken
up.
The new state of Hungary then adopted a new currency, the korona, which replaced the Austro-Hungarian
equivalent at the same value.
Much like Germany, Hungary faced serious inflation after WWI, which wasn't helped by the fact
that the new korona was very easy to copy, leading to a significant portion of the currency
in circulation being fake.
Before WWI, the Austro-Hungarian korona was valued at 5 korona per US Dollar, but by 1924
one US Dollar was worth 70,000 korona.
After only eight years Hungary gave up on the korona, and replaced it with the pengő
in 1927, at a rate of 12,500 korona per pengő.
The word "pengő" is onomatopoeic in Hungarian, and is the equivalent to the English for ringing.
This represented the ringing sound made by silver coins striking a hard surface, and
the word was used to refer to silver coins from the 15th to the 17th century.
So the name of this new currency was a sort of historical call-back.
The pengő was the most stable currency of the region until the Great Depression, but
it wasn't until World War II that things got really bad.
Hungary was an Axis power, and it benefitted from its relationship with Germany until 1944
when Germany invaded and occupied Hungary when it looked like they might have been trying
for peace with the Allies.
Then Hungary became a battleground between Germany and the Soviet Union.
The country was devastated - around 90% of its industrial facilities were damaged and
goods production suffered greatly.
Most of its rail lines and locomotives were destroyed, so transportation was also crippled.
With supply severely disrupted, prices skyrocketed, and this only continued after the war.
In an attempt to get the economy going again, the government printed more money.
A LOT more money.
In July 1945, there was 25 billion pengő in circulation.
By July 1946, there was 47 septillion pengő in circulation.
That's a trillion trillion, or twenty four zeros.
A single dollar was worth 460 septillion pengő, compared to just 5 pengő before the war.
I think you can probably see a problem here.
At the height of the inflation, prices were rising at a rate of 150,000% per day.
At this point the government just stopped collecting taxes, because a single day's delay
in collecting would mean it was all worthless.
And that's when you know things are really bad, when even the tax man isn't bothered
to take your money off you.
It is the worst inflation in history.
To counteract the ever-increasing amount of money you needed to buy things, the government
printed new banknotes, because the printing strategy was already working so well.
There was the milpengő, which was worth one million pengő, and the bilpengő, which was
worth one trillion pengő.
But soon enough even these were worthless, and they were printing 100 million bilpengő
banknotes.
Yep, 100 million trillion banknotes.
That's a quintillion, or 20 zeros.
They also printed a one billion bilpengő note, although it never entered circulation.
At one billion trillion pengő, or one sextillion - that's 21 zeros - it remains the highest
denomination banknote ever printed.
It was worth about 12 cents (USD).
This is all quite hilarious until you spare a thought for the people who had to live under
these conditions.
The money printing did get production back on track, but at the expense of the workers,
whose pay was now largely worthless.
I mean if prices are increasing 150,000% per day, by the time you leave work you can buy
less than you could when you clocked in, and it cost literally billions for a loaf of goddamn
bread.
By this point the pengő was well beyond saving.
I'm no economist but I'm pretty sure if you have a banknote ending with "-illion", it's
over.
That currency is not coming back, like you probably shouldn't even bother printing that.
That banknote is the monetary equivalent of a skullet, like just let it go man, it's over.
In August 1946, after 19 years of pengős, Hungary introduced the forint, at a ratio
of 400 octillion pengős to 1.
That's 400 billion billion billion or 29 zeros.
So if you had that, congratulations, you're now the proud owner of 1 forint.
And would you believe it, they still use the forint to this day, so it took them a few
tries but they got there in the end.
As a member of the European Union, Hungary may eventually replace the forint with the
Euro.
This is a very attractive proposition because the Euro has a coin with a stickman drawn
on it.
If you want to find out how that came to pass, well, you're in luck, because I have a video
about it, and many more videos about other strange and unusual things, which may make
me deserving of a subscription.
If you agree, please subscribe, because I'm trying to reach 1 sextillion subscribers.
Thank you.