There had indeed been inflation, but it had built up over a long time, since WWI. Specifically, it happened in two bursts, a rapid drop 1914-1918 and a slower decline from 1937 to 1949.
Graph.. In 1960 itself, inflation had mostly been low and stable for a decade - which is presumably why the French chose that moment to reform the currency.
Another excellent example of currency reform after a long slow period of regular inflation is Turkey. In 2005, the Turkish lira was replaced by the new Turkish lira at a rate of 1,000,000:1. Six zeroes lopped off. Evidence of hyperinflation? No, just evidence of slow, gradual ordinary inflation, dating back to 1970. A key indicator of whether the inflation is "hyper" or not, from a numismatist's perspective, is the existence of circulating coinage covering most of the inflationary range. Coinage is supposed to last for a long time in circulation, and governments that know a coin's face value is going to quickly fall below it's metal value simply stop making coins. You won't find a circulating hyperinflationary German coin bigger than
500 marks, whereas you can find old Turkish lira coins with face values up to
250,000 lira.
Reforming the currency while it is still in freefall, on the other hand, is a sign of hyperinflation. Zimbabwe, Israel, Brazil, Peru and others have all tried this, apparently in the belief that changing the name of the ship from "Titanic" to something else would stop the ship from sinking.
Quote:
Imagine handing the teller $20, and getting back two shiny new dimes.
In France in 1959, the 20 franc coin (which replaced the 20 franc note in 1950) was 23mm across and made of aluminium-bronze; it's 1960 replacement, the 20 centime coin, was 23mm across and made of aluminium bronze - only the design and the name of the denomination had changed, the physical properties of the coin stayed exactly the same - it helped make the transition smooth.
Don't say "infinitely" when you mean "very"; otherwise, you'll have no word left when you want to talk about something really infinite. - C. S. Lewis
Posted 09/29/2011 05:57 am
