Could Britain ever experience hyperinflation? An interview with the world’s “money doctor”
Mark Tovey is a finance journalist with bylines in The Guardian, The Motley Fool, and more. He digs into data and FOI-based investigations, and makes finance easier to understand.
Last updated 2nd September 2026
25 min read
"The remedies may lead to hyperinflation."
The warning came in August 2009 from Nassim Nicholas Taleb, a former derivatives trader and the author of The Black Swan, a bestselling book about rare and unpredictable events capable of overturning economies and societies.
Britain was two years into the financial crisis and deep recession.
Interest rates had been cut to 0.5%, borrowing was headed for 12% of national income, and the Bank of England had begun creating money to buy government bonds – a programme it had just expanded to £175 billion. Nothing like it had been attempted before.
Standing beside him was David Cameron, then leader of the opposition, who dismissed the prospect. Britain's debts might eventually produce inflation, Cameron conceded, but hyperinflation was another matter.
The fear of such an outcome has never disappeared entirely.
Every new burst of government borrowing or monetary expansion brings another warning that Britain could follow Weimar Germany, Zimbabwe or Venezuela. The comparison is normally intended to frighten rather than illuminate.
But could it actually happen?
Under the standard definition established by the economist Phillip Cagan, an episode of hyperinflation begins when prices rise by at least 50% in a single month.
For context, Britain's inflation peaked at around 25% in 1975, over a full year. Hyperinflation begins at double that rate, in a single month, which, if sustained, compounds to roughly 12,875% annually.
The Hanke-Krus World Hyperinflation Table is the most comprehensive catalogue of the phenomenon ever assembled. It records 71 episodes, beginning in revolutionary France and extending across more than two centuries of war, revolution and monetary collapse.
One of the men behind the table is Steve Hanke, professor of applied economics at Johns Hopkins University. Over several decades, he has cultivated a reputation as a globe-trotting "money doctor", advising presidents and governments on currencies in crisis.
He's not an uncontroversial figure, and many of the remedies he prescribes have drawn their fair share of criticism over the years. Still, in his telling, no living economist has helped cure more hyperinflations.
His casebook contains miracle recoveries, relapsed patients and treatments thwarted by politics.
It has taken him from collapsing banks in Bulgaria to the private home of Indonesia's authoritarian president, Suharto, where he worked under armed guard as American warships exercised offshore.
Elsewhere, he was accused of smuggling counterfeit money and leading a French assassination squad called the Spider Group.
Today, we took Britain into his consulting room.
The anatomy of a currency death
Hanke, 83, appeared over Zoom to answer our questions, dressed in a dark suit and tie, peering over his spectacles from in front of an intimidatingly large bookcase.
Born in Georgia in 1942 and raised in a small Iowa farming town, Hanke received his first education in markets through his grandfather's egg business. By his account, he was trading soybean futures at 14.
Decades later, he would be advising presidents on the survival of their currencies.
Hyperinflations, he explained, are extraordinarily rare. Most of the 71 recorded cases cluster around wars or the complete breakdown of political and economic institutions.
The collapse of communism produced several because newly independent governments suddenly found themselves without functioning systems for collecting taxes.
They continued spending but lacked the revenue to pay their bills. Unaccustomed to independent central banks and unable to borrow normally, they turned to the printing press.
The word "hyperinflation" is often used so loosely that its true scale becomes difficult to appreciate.
For reference, Hanke estimated Venezuela's inflation at around 435% a year on the morning we spoke in late July 2026. That is an economic calamity by any ordinary measure, but still orders of magnitude below hyperinflation.
"People talk loosely about hyperinflation," he complained. Once inflation reaches the high double digits or moves into triple figures, journalists begin reaching for the term without understanding "the standard custom and practice in the economics profession".
Even that threshold looks modest beside history's most extreme case.
In July 1946, Hungary experienced monthly inflation of 41,900,000,000,000,000% – or 41.9 quadrillion percent.
That figure is so large that it almost becomes impossible to comprehend. £1 became £419 trillion in a month. Prices were doubling every 15 hours.
The table below shows the 10 most extreme hyperinflations in history:
| Place | Peak month | Monthly rate | Prices doubled every |
|---|---|---|---|
| 1. Hungary | Jul 1946 | 4.19 x 10¹⁶% | 15 hours |
| 2. Zimbabwe | Nov 2008 | 7.96 x 10¹⁰% | 24.7 hours |
| 3. Yugoslavia | Jan 1994 | 313,000,000% | 1.41 days |
| 4. Republika Srpska | Jan 1994 | 297,000,000% | 1.41 days |
| 5. Germany | Oct 1923 | 29,500% | 3.7 days |
| 6. Greece | Oct 1944 | 13,800% | 4.27 days |
| 7. China | Apr 1949 | 5,070% | 5.34 days |
| 8. Free City of Danzig | Sep 1923 | 2,440% | 6.52 days |
| 9. Armenia | Nov 1993 | 438% | 12.5 days |
| 10. Turkmenistan | Nov 1993 | 429% | 12.7 days |
To explain further, Hanke he borrows an analogy from the physicist Richard Feynman.
Imagine enlarging an apple until it is the size of the Earth. Each atom inside it would then be approximately the size of the original apple.
Confronted with numbers far outside ordinary human intuition, Hanke performs the same operation in reverse, shrinking an astronomical inflation rate into the interval between breakfast and bedtime.
Beneath those inconceivable numbers, however, Hanke sees the same underlying pathology: a catastrophic failure of public finances.
A government continues spending but can no longer collect enough tax or persuade investors and domestic institutions to buy its bonds. Unable to borrow normally, the government turns to the central bank, which creates money to finance the shortfall.
"Remember, inflation is a tax," Hanke said. "If you're cut off from the capital markets and you can't sell bonds, the only way you can do it is with an inflation tax."
Britain's quantitative-easing programmes also involved the central bank creating money to purchase government bonds. The crucial difference, according to Hanke, is one of degree and credibility.
Investors have continued buying gilts because Britain's fiscal affairs, while sometimes bad, have remained within the broad range of historical experience. The country financed itself through two world wars without approaching hyperinflation.
For a currency to cross that line, Hanke said, the fiscal position must become not merely irresponsible but "catastrophic".
In Yugoslavia, where he served as chief economic adviser to Ante Marković's reform government from January 1990 until mid-1991, monthly inflation eventually peaked at 313 million per cent. By December 1993, approximately 95% of government expenditure was being financed with newly printed dinars.
But the distance between the two is not a fact of nature.
It rests on Britain being able to collect taxes, sell gilts and sustain confidence in sterling and the Bank of England.
What Hanke's casebook shows is how quickly those things can disintegrate, and what has to be done once they have.
The money doctor's go-to prescription
Hanke's preferred treatment is a currency board.
The system retains a country's domestic currency but fixes its value rigidly to a trusted foreign one. The currency board's monetary liabilities must be fully backed by foreign reserves, depriving the government of the ability to print freely to cover its bills.
In Hanke's phrase, the local currency becomes a "clone" of its foreign anchor.
Bulgaria provides perhaps the purest example of both his treatment and his method.
The country suffered an initial hyperinflation in 1991, when the new government freed prices that the communist regime had held artificially low. Hanke and fellow economist Kurt Schuler proposed replacing the discretion of Bulgaria's central bank with a currency board that would tie the lev to the German mark.
The money doctor and his wife travelled repeatedly to the Balkan state, promoting the proposal to prime ministers, central-bank governors and almost anyone else prepared to listen. The response rarely varied.
"Professor, that's very interesting, but you don't understand the local situation," Hanke recalled being told. "We have everything under control."
They did not.
The initial hyperinflation episode was followed by another, still more destructive crisis in 1996 and 1997. As the lev plummeted in value, receiving money became a race to get rid of it.
"There was almost nothing to buy," Hanke recalled. "If you wanted to get rid of the lev before it withered away in your hands, you'd exchange it for Deutschmarks or dollars."
Informal currency dealers appeared across the country, including on the steps of the Bulgarian National Bank itself.
The public began searching desperately for an escape. In December 1996, a Bulgarian translation of Hanke and Schuler's quasi-technical book, Currency Boards for Developing Countries, appeared unexpectedly at newsstands. It became a bestseller.
Hanke initially struggled to obtain a copy of his own book. Each morning, the kiosk had sold out before he arrived. Eventually, he paid the vendor in advance and asked him to set aside five copies. They cost approximately 25 cents each.
Its unlikely success was a measure of the desperation.
"The general public wanted a solution to the problem they had," Hanke said. With inflation exceeding 200% a month, Bulgarians were buying a book about monetary architecture because monetary architecture had entered every part of their lives.
The political opening followed. Petar Stoyanov, Bulgaria's newly elected president, invited Hanke to become his economic adviser and led the campaign for a currency board.
This time, the resistance came from Prime Minister Ivan Kostov, a former finance minister whom Hanke remembered as convinced that no outsider could understand Bulgaria as well as he did.
"He took a very know-it-all position," Hanke said. "Obviously, no foreigner had a clue about how things worked in Bulgaria."
Kostov eventually came round.
Resistance within the International Monetary Fund also gave way, and by late 1996 the institution was actively promoting a currency board as Bulgaria's best route out of the crisis.
With support building among the public, press, and political establishment, Bulgaria introduced the system on 1st July 1997.
The turnaround was dramatic.
Monthly inflation, which reached 243% in February, fell to 12.7% in March and averaged less than 2% between April and June as the caretaker government implemented a wider stabilisation programme centred on the prospective currency board.
After its introduction at the start of July, inflation remained under control, the banking system stabilised, and the economy returned to growth. The Bulgarian National Bank's basic interest rate, which had exceeded 200% at the height of the crisis, had fallen to 5.2% by the end of 1998.
The prescription dismissed six years earlier had become, in Stoyanov's judgement, the foundation of Bulgaria's post-communist stability.
For Britain, the lesson is how distant such medicine remains. Its tax system functions, lenders continue buying gilts and confidence in its central bank endures.
The patient Washington wanted dead
In Bulgaria, the IMF eventually "saw the light", as Hanke puts it, and supported his prescription.
In Indonesia, the dispute escalated from an argument among economists into something resembling a political thriller: a dictator clinging to power, alleged intelligence threats, American warships off Jakarta and round-the-clock protection for Hanke and his wife.
It began with another currency collapsing.
The Asian financial crisis erupted in July 1997, when Thailand abandoned the fixed peg of the baht to the US dollar, allowing it to float. The panic spread rapidly through the region.
Indonesia's rupiah, previously worth approximately 2,400 to the US dollar, eventually plunged towards 16,000. Food prices soared and riots followed.
An IMF-led international rescue package promised up to $43 billion, accompanied by a programme of around 50 reforms. It demanded austerity, bank closures and the dismantling of monopolies connected to the family of President Suharto, who had ruled Indonesia for three decades.
What it did not provide, in Hanke's view, was a way to stop the collapse of the currency itself.
Suharto sought a second opinion.
His regime had delivered economic growth but was authoritarian, notoriously corrupt and implicated in mass killing and repression.
Government and family business were deeply entangled. His private residence on Jakarta's Jalan Cendana functioned as an informal centre of power, where officials, relatives and business cronies sought access to the president.
It was there that Hanke first examined the patient.
He recommended the same basic treatment used in Bulgaria: a currency board that would make the rupiah fully convertible into US dollars at a fixed rate. Suharto found the idea promising and asked Hanke to become his adviser.
There was, however, one condition. Hanke would accept no payment.
"I'll do it, but I don't want to take any money," he told Suharto. "I don't want to be a consultant. I'll do it pro bono."
The president appeared unable to process the answer. As their first afternoon together drew to a close, he asked: "Professor, what are your terms?"
Hanke repeated that there were none. As he was leaving, Suharto asked again.
For Hanke, refusing payment protected his independence. For a ruler surrounded by family members and associates who had become spectacularly rich during his presidency, an American economist who wanted nothing was apparently a more puzzling proposition than remaking the national currency.
Suharto adopted the proposal publicly. Hanke says that when his appointment was announced, the rupiah rallied by approximately 28% against the dollar in both the spot market and the one-year forward market. To Hanke, the surge demonstrated that investors believed a currency board could work.
Then, he recalled, "all hell" broke loose.
The IMF, the Clinton administration and several major governments opposed the scheme.
Their public objection was that Indonesia lacked the strong banks, adequate supervision and political credibility required to maintain a currency board. Hanke says critics alleged that Suharto intended to fix the rupiah at an artificially generous rate, allowing his family and associates to convert their wealth into dollars before fleeing the country.
Hanke denies ever selecting an exchange rate.
His plan, he said, was to freeze the monetary base, allow the rupiah to float freely for 30 days and use the resulting market rate to set the peg. Nevertheless, rumours circulated that he intended to fix it at 5,000 or 5,500 rupiah to the dollar.
Behind the technical arguments, Hanke believes, lay a more ruthless objective. Washington had concluded that stabilising the rupiah would also stabilise Suharto.
"They wanted to get rid of Suharto," he said. "And they wanted the financial crisis to do it."
In Hanke's account, President Bill Clinton and IMF managing director Michel Camdessus made the choice explicit: abandon the currency board or lose the $43 billion rescue package.
The United States had supported Suharto for decades despite the brutality of his regime. Hanke argues that, by 1998, Washington had come to regard its former ally as an embarrassment and an obstacle to reform.
He maintains that the currency board was opposed not because Washington thought it would fail, but because officials feared that it would succeed, leaving Suharto "in the saddle".
Whether the scheme would have rescued the rupiah or compounded the crisis remains unanswerable.
The struggle nevertheless took on a menacing edge. Hanke says Suharto warned him almost immediately that two intelligence services had placed "a target on my back". The economist and his wife were given protection around the clock.
Hanke received part of Suharto's own security detail. Mrs Hanke was guarded by the all-female unit that had previously protected Suharto's late wife.
"We had 24-7 huge security in Indonesia," he recalled.
The final blow, according to Hanke, arrived from the sea. He claims that US naval exercises near Jakarta alarmed Indonesia's military leadership, prompting it to withdraw its support for the currency board and forcing Suharto to abandon the proposal.
Was Hanke himself frightened?
"No."
His composure becomes slightly easier to understand in light of what happened during another monetary mission.
In Montenegro, where Hanke helped replace the rapidly depreciating Yugoslav dinar with the German mark, he became the subject of increasingly bizarre accusations.
Hanke says Yugoslav information minister Goran Matić alleged that he led a ring smuggling counterfeit dinars into the country to destabilise its economy.
In a separate story circulated by the state news agency Tanjug, Hanke was portrayed as a French intelligence agent controlling a five-man assassination team codenamed Pauk, or "Spider", whose target was Slobodan Milošević, the then-Yugoslav president later tried for war crimes at The Hague.
Hanke again received heavy security. He admits that the experience made him look over his shoulder, but says he was too occupied by the monetary reform to become paralysed by it.
Had he taken reckless risks for work he was performing without payment?
"I didn't really think about it," he replied.
Indonesia's currency board was never installed. Instead, Suharto signed a third agreement with the IMF in April. Fuel subsidies were cut the following month, sending petrol prices up by 71%, while violent unrest consumed Jakarta.
On 21 May 1998, Suharto resigned after 32 years in power.
For Hanke, Indonesia remains the patient he was prevented from treating. The announcement of his proposed medicine had sent the rupiah soaring, but that is not proof that it would have survived the diseased banks, political corruption and collapsing authority beneath it.
What is certain is that a dispute over exchange-rate policy placed an unpaid American professor inside a presidential palace, surrounded his wife with bodyguards and, in his telling, brought the United States Pacific Fleet steaming towards the horizon.
Argentina: the patient who relapsed
Indonesia leaves an unanswerable question: would Hanke's treatment have worked?
Argentina poses a more troubling one. What if something resembling his treatment was tried, appeared spectacularly successful, and then ended in one of the most traumatic financial collapses in modern history?
Hanke first met Carlos Menem in 1989, shortly after he was elected president of Argentina amid hyperinflation.
Although Menem's party had built its politics on state control of the economy, he wanted to pursue the kind of free-market reforms associated with Margaret Thatcher and Ronald Reagan. Hanke told him that none would be credible until he stabilised the currency.
Menem asked how. Hanke explained the currency-board model and, at the president's request, he and Kurt Schuler produced a Spanish-language book proposing one for Argentina.
In April 1991, Economy Minister Domingo Cavallo introduced the Convertibility Plan. A new peso was fixed at one to the US dollar. Hyperinflation ended, confidence returned and Argentines enjoyed extraordinary purchasing power abroad.
But Hanke insists it was never a genuine currency board.
"They kind of bastardised it," he said.
Under a true currency board, the monetary base is fully backed by foreign currency held in reserve. The authorities cannot simply create more money or set their own monetary policy.
Argentina's system left the central bank with ways around those restrictions. Although the law required full backing, up to one-third of it could consist of Argentine government bonds rather than foreign currency. That gave the central bank some freedom to create money and lend within the domestic economy.
Hanke calls it a "quasi-currency board".
Only seven months after convertibility began, he warned in The Wall Street Journal that those design flaws would eventually cause it to "blow up".
For most Argentines, the distinction offers little consolation.
Convertibility delivered stability and a consumer boom, but it also chained Argentina to an increasingly strong dollar. Exports became expensive, the Brazilian real suffered a dramatic fall pricing Argentine goods out of their biggest market, and the country entered a grinding recession as government debt mounted.
The miracle ended brutally.
In December 2001, the government imposed the corralito, restricting withdrawals as depositors rushed to retrieve their savings. Argentina defaulted, abandoned the one-to-one exchange rate and forcibly converted dollar deposits into pesos. As the peso plunged, families watched their savings collapse.
The scars remain visible. Argentines still keep dollars in safes, safe-deposit boxes and beneath mattresses rather than trust them to the banking system.
At the time of our interview, one dollar bought roughly 1,500 pesos. Under convertibility, it had bought one.
How, then, can Hanke include Argentina among his successes?
His answer is that convertibility succeeded whenever it behaved like a currency board and failed once politicians exploited its loopholes.
During the 1995 Tequila Crisis, when Mexico's devaluation triggered panic across Latin America, investors expected the Argentine peg to collapse. Hanke, then president of the Toronto Trust Argentina investment fund, bought heavily depressed Argentine bonds.
"At that moment, they were operating it like a currency board," he said.
The peg survived. According to Hanke, the fund returned 79.25% that year and became the world's best-performing emerging-market fund.
By the final year of convertibility, his confidence had vanished.
The central bank was exploiting the system's loopholes and, Hanke argues, sometimes violating its own charter, printing pesos that no dollars stood behind, lending to the government and propping up struggling banks.
That is not the conventional verdict. Even the IMF's own later evaluation admitted serious mistakes, but identified a broader collection of causes: fiscal indiscipline, excessive debt, external shocks, an overvalued exchange rate and a political system unable to correct course.
Hanke's defence resembles that of an engineer whose bridge remained standing for a decade before collapsing after its operators ignored the weight limit.
The design worked, he argues; the people running it broke the rules. His critics might respond that a system unable to survive predictable political behaviour was never as robust as advertised.
The lesson reaches beyond Argentina. Britain's monetary system also depends not merely on laws, but on successive governments continuing to respect the limits those laws impose.
Argentina therefore remains the awkward entry in the doctor's casebook. Convertibility killed hyperinflation and delivered a decade of stability, but its collapse trapped depositors inside the banks and destroyed confidence in the peso.
Hanke concluded that the country required stronger medicine. A currency board leaves politicians with a domestic currency and rules they can evade. Full dollarisation removes both the discretion and the temptation.
Ecuador: amputating the printing press
If a currency board locks away the printing press, dollarisation amputates it.
The distinction is simple. Under a currency board, a country retains its own money but promises to exchange it at a fixed rate for a foreign currency. Under dollarisation, the domestic currency disappears altogether. The government can no longer devalue it, print more of it or sneakily change the rules.
Hanke prescribes this radical surgery when the rule of law has deteriorated so badly that even a currency board cannot be trusted.
"What if you're in a country where things are broken down to the extent that you don't really trust anyone to follow that simple rule?" he asked. "Then dollarisation comes in."
Ecuador became his principal example.
Hanke and Kurt Schuler had initially proposed a currency board for the country. Their book helped introduce the idea into Ecuadorian politics, and Hanke visited several times to promote monetary and banking reform.
During the 1996 presidential campaign, the proposal was embraced by Abdalá Bucaram, the populist better known as El Loco. Bucaram won the election but was removed from office months later after Congress declared him mentally unfit to govern.
The currency debate temporarily died with his presidency. The sucre, Ecuador's currency, soon followed.
During 1998 and 1999, the country suffered simultaneous currency and banking crises. The sucre collapsed, deposits were frozen and 16 financial institutions representing approximately 65% of the domestic banking system were closed or taken over. By early 2000, President Jamil Mahuad was preparing to resign.
According to Hanke, US Treasury official Larry Summers persuaded Mahuad to make a final throw of the dice: announce dollarisation instead.
On 9 January 2000, before legislation had been passed or a detailed implementation plan completed, Mahuad announced that Ecuador would replace the sucre with the US dollar at a rate of 25,000 to one.
The announcement did not save him.
Less than two weeks later, indigenous protesters and rebellious military officers forced Mahuad from office. But the monetary reform survived the president who had announced it. His successor proceeded with dollarisation, and Congress passed the necessary legislation in March.
Hanke is careful about the extent of his personal role.
He had promoted monetary reform through his book, speeches, interviews and discussions with influential Ecuadorians, but held no official position when Mahuad made the announcement. He was formally invited to advise the finance minister only later, as the new system was being consolidated.
Dollarisation produced the confidence shock Hanke had promised. Ecuadorians who had hidden dollars outside the banking system began depositing them. According to Hanke, bank deposits increased by 65% during the first year.
"The money came out from under the mattress," he said.
This is also his answer to the objection that an impoverished country cannot find enough dollars to replace its domestic currency. Some are already circulating unofficially or hidden in homes. More arrive as investors move money into the country to benefit from higher interest rates and renewed confidence.
The treatment nevertheless involves a real sacrifice.
Ecuador surrendered control over its exchange rate and interest rates, lost the profit earned from issuing its own currency and restricted its central bank's ability to rescue banks during a panic. Economic shocks can no longer be absorbed by devaluing the currency. Wages, prices and government spending must take the strain instead.
To critics, that is a dangerous loss of flexibility and national sovereignty. To Hanke, removing flexibility is the point.
"That's kind of a stupid objection," he said. "It's the flexibility that got you into the trouble you're in in the first place."
The loss of a national currency can also provoke an emotional reaction. Money carries the faces, symbols and history of a country. Replacing it with another nation's notes can look like an admission of political failure.
Where that objection proves overwhelming, Hanke will settle for the milder treatment, which leaves the notes and coins in place. Economically, he sees little difference between the two.
The decisive question is whether the country still possesses institutions capable of obeying rules. If it does, the printing press can be locked away. If it does not, he would rather remove it.
More than a quarter of a century later, Ecuador still uses the dollar. Governments have fallen, protests have erupted and political crises have repeatedly shaken the country, yet none has restored the sucre.
Argentina kept its peso and eventually tore up the rules supporting it. Ecuador amputated its currency, and the operation endured.
Britain's prognosis
Britain is not Bulgaria in 1997. Its citizens are not scrambling to exchange their wages on the steps of the Bank of England.
It is not Indonesia under Suharto, cut off from international support as its currency sinks. Nor has it trapped depositors inside their banks, as Argentina did, or lost so much faith in sterling that it must import another country’s money.
It does not need Hanke's medicine.
Britain can still collect taxes, sell government bonds and borrow in its own currency through some of the deepest capital markets in the world.
The Bank of England remains operationally independent, while the Treasury has no need for lifelines from the IMF. Investors continue to regard gilts as assets rather than waste paper.
Meanwhile, replacing sterling with another country's money would be almost inconceivable. That is itself a measure of how far it remains from the collapse of trust that makes a system like dollarisation politically possible.
Even during two world wars, Hanke observed, its fiscal system never deteriorated far enough to produce hyperinflation.
That is the reassuring conclusion. The less reassuring one is that Hanke does not believe rich countries possess any cultural immunity from monetary destruction. The protection lies in institutions, and institutions can be weakened.
But there is a tension in that reassurance.
Hanke has spent forty years arguing that some politicians cannot be trusted with the power to create money, and designing systems to take it away from them. His verdict on Britain is that its politicians can be trusted with exactly that power.
The difference, on his account, is not character but record: Britain's institutions have been tested repeatedly and have held. Argentina's were tested and did not.
But it's worth considering what those tests have looked like lately.
Quantitative easing peaked at £895 billion in 2021, and the Bank of England has been unwinding it at a loss the Treasury has to cover. Debt is near 100% of national income – levels not seen since the 1960s – and debt interest costs more than several government departments combined.
In September 2022, the ill-fated Truss mini-budget sent gilt yields up so sharply the Bank intervened to stop pension funds failing, which perhaps is the closest thing in recent memory to Britain being told what it could not afford.
None of that is hyperinflation, or close to it. But it is the reason the question keeps being asked, and it is worth knowing what the answer rests on.
The 71 entries in his hyperinflation table differ enormously in language, history and wealth. What connects them is a government spending far beyond what it can raise in taxes, losing access to borrowing and forcing its central bank to create the difference.
War and revolution often provide the setting because they destroy tax collection, political legitimacy and confidence simultaneously.
Britain remains a long way from that point.
Quantitative easing is not equivalent to a central bank financing almost the entire state, as occurred in Yugoslavia. Persistent deficits are not the same as a government losing access to bond markets altogether. Painful inflation is not hyperinflation.
But the distance is maintained by rules, habits and public confidence rather than a law of nature. Hanke's career has been spent designing systems for countries whose leaders could no longer be trusted with monetary flexibility. Currency boards place the printing press behind a lock. Dollarisation removes it from the room.
Nassim Nicholas Taleb's warning that Britain's response to the financial crisis might end in hyperinflation proved wrong. Hanke's table helps explain why. Britain's institutions bent, but they did not break.
Peering over his spectacles from beneath that wall of books, the money doctor gave his ultimate diagnosis on whether Britain could experience hyperinflation.
"The short answer to that is no."
The longer answer is that Britain must preserve the institutions that give him the confidence to say it.
