The Hungarian Pengő

1946 CE — Europe, Hungary

Today: Budapest, Hungary

Hungary emerged from the war with its industry wrecked, its capital besieged, and reparations owed to the Soviet Union. It printed. Prices doubled roughly every fifteen hours — the fastest inflation ever recorded anywhere, worse than Weimar by a wide margin. The state issued a note for one hundred million billion pengő and had a larger one printed but never released. When the currency was replaced in August 1946, the entire stock of banknotes in circulation was worth less than a single one of the new coins.

Worth knowing: The replacement currency introduced in 1946, the forint, is still Hungary's money today. It was launched by simply declaring the old notes void — there was no exchange rate worth calculating, because there was no amount of pengő that equalled one forint.

Pattern: Monetary debasement — A money's intrinsic or backed value is diluted to fund obligations; confidence in it erodes, often into inflation.

Entry 219 of 240 in Precedent, a walk through the whole human story in order.