No matter how pessimistic you feel about the economy — and news of a new surge in jobless claims isn’t helping — chances are the worst you think might happen in the near future is a double-dip recession. Only the most extreme gloom-and-doomers believe in darker scenarios involving hyperinflation or, ultimately, the devaluation of the U.S. dollar.
The truth is, currency devaluation is typically caused by extreme economic and geopolitical crises: think wars and government takeovers. It typically starts with a government’s inability to repay debts (whether domestic or to other countries), prints too much currency (hyperinflation!) and, ultimately, replaces that currency with a new one.
The German Papiermark is one of the most commonly mentioned examples of hyperinflation and currency devaluation: in 1922-1923, the German government printed unbacked currency in order to pay its delinquent international debt, too much money was circulated and, as a result, that money quickly became worthless. within a year, the largest domination of the Papiermark went from 50,000 to 100 trillion. By November 1913, the inflation rate was considered 325,000,000%. The Chilean Escudo, meanwhile was replaced by the Peso in 1975 after inflation skyrocketed to 1,200% in 1973 (the year when General Augusto Pinochet seized control of the Chilean government and installed his populist military regime). The Yugoslavian Dinar was replaced (with a new currency of the same name) multiple times between 1992 and 1995 as a result of hyperinflation (which by some estimated had reached a rate of 100% per day in December 1994).
Behind every failed currency is an interesting story (and you can read some of them here). With this slideshow, however, we simply present to you a dozen currencies that are no longer in circulation.