Nicaragua and US Capitalism – the Era of Hyper Inflation

The Somoza family was a political dynasty that ruled Nicaragua as a family dictatorship from 1936 to 1979.  During the Nicaraguan Revolution, the Sandinista National Liberation Front overthrew the Somoza dictatorship in 1979.  Anastasio ("Tachito") Somoza Debayle fled Nicaragua and lived in exile in Paraguay where he was assassinated on September 17, 1980.  The assassination had the code name Operation Reptile and he was ambushed by seven members of a Sandinista commando team consisting of 4 mean and 3 women. 

Anastasio Somoza Debayle

The fall of the United States backed dictatorship of Somoza Debayle resulted in a US foreign policy decision by President Ronald Reagan to embargo all trade with the communist regime and provide financial support to the Contra mercenaries to overthrow the Sandinista regime of Daniel Ortega.  With the economic blockade, it was only a matter before the economy of Nicaragua deteriorated.  This together with the mounting foreign debt and failure of the Sandinistas to revive the rural local economy resulted in hyper-inflation in the late 1980s.  By 1990 Nicaragua suffered galloping inflation at the rate of 50% per month.  Later that year in 1990 a United States backed coalition under Violeta Chamorra won the elections and the inflation was contained. 
    

Shown below are some of the banknotes from Nicaragua during the era of hyper-inflation in the late 1980’s.   The 10 Cordoba banknote issued in 1985 with a portrait of Comandante Carlos Fonseca Amador was overstamped 10,000 Cordobas (1,000 : 1 ratio).

 

The 20 Cordoba banknote (red) issued in 1984 with a portrait of Comandante German Pomares Ordonez was overstamped 20,000 Cordobas (1,000 : 1 ratio).

The 100 Cordoba banknote issued in 1985 with a portrait of Rigoberto Lopez Perez was overstamped 100,000 Cordobas (1,000 : 1 ratio).

The 20 Cordoba banknote (blue) issued in 1985 with a portrait of Comandante German Pomares Ordonez was overstamped 500,000 Cordobas (25,000 : 1 ratio).

The 500 Cordoba banknote issued on April 30, 1985 with a portrait of Rubel Dario was overstamped 100,000 Cordobas (200:1 ratio).

The 1,000 Cordoba banknote issued in 1985 with a portrait of General A.C. Sandino was overstamped 200,000 Cordobas (200:1 ratio).

 

Shown below is a 20,000 Cardobas banknote with a portrait of Cleto Ordonez from 1989 (P-160).  

The two largest denomination banknotes issued during this period of hyper-inflation were the 5 Million (P-165) with a portrait of Cleto Ordonez and the 10 Million Cordobas (P-166) banknote with a portrait of General Jose Dolores Estrada in 1990.