10 Times Inflation Destroyed Economies
5. China (late 1940s)
Post-war China’s inflation rate reached a maximum monthly rate of 2178% in May, 1949, with an equivalent daily inflation rate of 11%. The highest denomination at the time was 6 billion yuan.
China’s nationalist government took over the nation’s banks, and switched from silver standard to fiat currency. It then used the currency to monetize its debt, and continued printing money during the war with Japan and the civil war fought against Mao’s communist forces.
The damage of the civil war, combined with the economic woes, brought the country to an almost total collapse. There were widespread famines, epidemics, and lawlessness throughout the country.
Eventually, China adopted the renminbi and by 1955, inflation began to ease. A revaluation saw 1 new renminbi equal of 10,000 of the old currency.
