Question:

What does 5 million percent inflation mean?

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What is the impact of this on prices and the economy and everyday life

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  1. It means that the govenment are printing money so rapidly in order to pay government employees, that the value of money is eroded almost as fast as it can be printed.

    For example if there was 1 million units in circulation, and the government printed 1 million units without cancelling any of the existing money in circulation, then inflation would approach 100%.  To achieve 5 million percent inflation, the government would have to print 50,000 million units approximately.

    People would not hold on to money long, and would invest in foreign currencies or inflation proof investments.  

    Money would effectively become a joke in that country, and other means of exchange would become the actual tender (regardless of legal tender)


  2. A LOT.

  3. This means you would get paid on a friday and by Saturday your wages would be toilet paper.

  4. Hyperinflation leads to money using worth and (judging by the affects is has had in the past) would turn money into nothing more but metal and paper- in fact as those products they would be more valuable.

    In Weimar Germany there was a Hyperinflation crisis and there is often told the story of the basket in the street to help explain the situation.

    A woman basically leaves a large woven basket out in the street full of 100 deustchmark notes- piled up on top of each other. She returns from the market to find the basket gone, but the pile of money left behind.

  5. 5 million % means that what was (for example) costing £1 would (after a 5 million % increase) cost £5 million ,,the impact would be instant poverty for all

  6. The first answerer has got it wrong.  Someting costing £1 now would cost £50,000 after 5 million % inflation.  Still bad, mind you!

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