10 Times Inflation Destroyed Economies
9. Chile (mid-1970s)
As a result of the socialist government coming to power, Chile’s year-over-year inflation in April, 1974, reached 746.29%. The main reason was that President Salvador Allende nationalized companies and mines, appropriated private land and gave them to workers, and printed money to keep the economy afloat. The printing press helped to pay for the numerous social programs for the working class, promised during the election campaign. The devaluation of escudos led the market to demand dollars.
The economic and political situation became very tense, and caused a widespread chaos and divisions among the Chileans. A US-backed coup d’état brought General Augusto Pinochet to power. He sold government owned companies and instituted the new peso which helped to curb the inflation and restore the nation’s economy.
