what was hyperinflation?
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Hyperinflation is refered as a highly accelerating inflation. It diminshes the real value of the currency, as the prices of all goods increase. This causes people to reduce their holdings in that currency which forces them to usually switch to more stable foreign currencies.
Economists believe that hyperinflations is a situation caused by large persistent government deficits financed primarily by money creation instead of borrowing or by increasing taxation. This results in some stress to the government budget.. A decrease in real tax revenue coupled with a strong need to maintain government spending, along with inability or unwillingness to borrow, can lead a country into hyperinflation.
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