Hyperinflation destroys confidence in the local currency so severely that it no longer serves as a store of value, unit of account, or medium of exchange. People rush to spend money the moment they receive it, prices change by the hour, and basic economic transactions become chaotic. In this environment, trust in money disappears, and everyday life turns into a constant struggle to preserve purchasing power.
What Happens to Countries?
Currency Black Markets
A parallel market forms often far weaker than the government’s published value.
Rising Political Tension and Protest Movements
Hyperinflation becomes a catalyst for broad political agitation.
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Destruction of Savings and Pensions
Hyperinflation leads pensions, wages, and fixed incomes to become worthless which can lead to poverty.
Loss of Government Credibility
The government loses economic legitimacy. Hyperinflation is a “politically destabilizing force.”