Hyperinflation

Hyperinflation is an extremely rapid increase in prices, eroding the real value of currency. This often occurs when a government excessively prints money, leading to a loss of confidence in the currency's value. As prices soar, people need more money to buy basic goods, creating a vicious cycle. Historical examples include Germany in the 1920s and Zimbabwe in the 2000s, where everyday items became unaffordable. Hyperinflation can destabilize economies, causing savings to diminish and prompting people to rely on barter or foreign currencies. It illustrates the crucial balance needed in monetary policy to ensure economic stability.