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Hi Anybody can explain me "what is Hyperinflation"?

Accounting Financial Law Finance
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Question added by Syed Yasir Ali Siraj Ul Haq , Senior General Accountant , Arakan General Trading Company LLC
Date Posted: 2013/12/18
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Rehan Qureshi
by Rehan Qureshi , Financial Consultant , Self Employeed

Definition of 'Hyperinflation' Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is a situation where the price increases are so out of control that the concept of inflation is meaningless. When associated with depressions, hyperinflation often occurs when there is a large increase in the money supply not supported by gross domestic product (GDP) growth, resulting in an imbalance in the supply and demand for the money. Left unchecked this causes prices to increase, as the currency loses its value. When associated with wars, hyperinflation often occurs when there is a loss of confidence in a currency's ability to maintain its value in the aftermath. Because of this, sellers demand a risk premium to accept the currency, and they do this by raising their prices.

 

One of the most famous examples of hyperinflation occurred in Germany between January1922 and November1923. By some estimates, the average price level increased by a factor of20 billion, doubling every28 hours.

Subhranshu Ganguly
by Subhranshu Ganguly , Quality Analyst. , WIPRO

Hyperinflation is a word1st coined during the2nd World war when Germany financed its war by printing currency notes. There was more than double digit inflation and no economic growth. It is a very dangerous situation for common people. Savings vanish and mere existance is struggle. It happened for some time after the break up of the Soviet union and the communist block. People who earn fixed wages and people earning pension have to literally beg for a living as the value of the currency depreciate very fast.

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