Hyperinflation comes about when the government spends more money than it can hope to ever get and then starts printing money in order to try to repay its debts. To grossly simplify: if there is $100 in the whole world, and bread costs one cent, the five cents you have saved up will allow you to get five loaves of bread. When the government prints more money, there is suddenly $200 in the world. If the bread maker doesn't change his price to 2 cents, he will lose value on the bread! However, your nickel doesn't change, so can only buy 2 1/2 loaves of bread now! The next day, the government prints another hundred dollars, so the bread has to be repriced to 3 cents, and your nickel will only buy 1 2/3 loaves! As the government prints more and more money, prices skyrocket and money becomes worth less and less. This has happened in numerous countries at various times -- Germany after WWI, Yugoslavia in the 1990's, Zimbabwe now. Reckless spending building debt that every cent we, our kids, and grandkids will ever earn, combined with increasing the money supply will destroy our money as certainly as it did elsewhere.
Meanwhile, you can have fun with this 500 Billion Dinar banknote. It was worth a dollar or so in its time.
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Hyperinflation comes about when the government spends more money than it can hope to ever get and then starts printing money in order to try to repay its debts. To grossly simplify: if there is $100 in the whole world, and bread costs one cent, the five cents you have saved up will allow you to get five loaves of bread. When the government prints more money, there is suddenly $200 in the world. If the bread maker doesn't change his price to 2 cents, he will lose value on the bread! However, your nickel doesn't change, so can only buy 2 1/2 loaves of bread now! The next day, the government prints another hundred dollars, so the bread has to be repriced to 3 cents, and your nickel will only buy 1 2/3 loaves! As the government prints more and more money, prices skyrocket and money becomes worth less and less. This has happened in numerous countries at various times -- Germany after WWI, Yugoslavia in the 1990's, Zimbabwe now. Reckless spending building debt that every cent we, our kids, and grandkids will ever earn, combined with increasing the money supply will destroy our money as certainly as it did elsewhere.
Meanwhile, you can have fun with this 500 Billion Dinar banknote. It was worth a dollar or so in its time.
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