Hyperinflation destroys confidence in the local currency so severely that it ceases to function as a store of value, unit of account, or medium of exchange.
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.
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.”