20 years ago: Yugoslav hyperinflation

Twenty years ago today, Yugoslavia was still a single country and its currency was in crisis. I'd just arrived from Budapest and, at the train station, lined up to change $20. I was handed a stack of large denomination dinar notes three-inches thick. Unable to fit them in my pocket, I carried them around in a plastic sack.

In Split, merchants had already taken to writing all prices on chalkboards and changing them throughout the day as the currency collapsed. Residents said the first thing they did upon receiving their pay is to spend it all -- preferably within hours -- before the 2500% annual inflation ate up its value. The presses at the central bank couldn't keep up, with 5000 dinar notes the largest in general circulation that day. At lunch, hamburgers for six cost over a million dinar, and it took ten minutes to simply count the bills (pictured above.) Credit cards not being in widespread use back then, we had to change money a couple times a day.

The next time I visited -- just five weeks later -- the streets and railroad underpasses were awash in discarded banknotes; they blew around in the wind at train stations and gathered in ditches. I filled a bag with 100 dinar notes with Antun Augustincic's Monument of Peace (which sits in front of UN headquarters in New York) on the front; the entire bagful was worth, at most, a few pennies. So was any cash anybody had stashed under their mattress or otherwise forgotten to spend.

The corrosive effect of all this on a society is hard to underestimate. and it only got worse during the war. By January 1994, Yugoslav dinar inflation peaked at a mind boggling 313 million percent per month, the second highest rate in human history. The highest? Hungary at the end of World War II, which saw prices increase by 3.8 octrillion fold in a single year. That's 3.8 with twenty-seven zeros after it.

The Dalmatian Coast was the first place I'd seen whose physical beauty rivaled that of my native Maine: limestone mountains falling straight into the azure sea, only to rise up again as islands a few miles offshore. The towns and villages had a Venetian flavor: white stone buildings with red tile roofs climbing steep hillsides. For the visiting tourist there was little indication that the country would soon descend into civil war.

Top Image (c) 2009 Colin Woodard.