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inflation

Hyperinflation is a condition when a country experience very high inflation rate or “out of control”. The minimum inflation rate per month in order to quality as hyperinflation is 50% or equivalent to 12,875% per year. During hyperinflation, prices increase rapidly and out of control as the currency loses its value.

Hyperinflation occurs when there is a rapid increase in the amount of money supply which is not corresponding to the growth in the output of goods and services. This results in imbalance between the supply and demand for the money. Hyperinflation is generally associated with paper money because this can easily be used to increase the money supply.

Hyperinflation effectively wipes out the purchasing power of private and public savings. It will distorts the economy & causes the monetary base, whether specie or hard currency, to flee the country. In the end it makes the afflicted area anathema to investment.

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