Hyperinflation Next Financial Crisis

Hyperinflation is a term which creates havoc among the minds of economist and governments across the world and if you ask person who know little about economics, they will tell you that hyperinflation is the worst thing to happen any country or economy. Hyperinflation is like spoilt child the more you try to control him or her the more they get out of your hands.

Before discussing about hyperinflation one should know what is hyperinflation, well hyperinflation is a condition under which the prices rise really fast and government and the central banks are unable to control those prices. Under hyperinflation the prices can rise 5 to 10 percent even on daily basis and that is the reason why governments just cannot afford to have inflation for too long because high in inflation for extend period can result in hyperinflation.

Under it the value of money falls so fast that all your fixed deposits or cash in your hand will be nothing because in hyperinflation the good which is available now at $ 1 will become $10 or even $100. For example in Zimbabwe which is facing hyperinflation the government had to print $100 million currency note and even then they were unable to control the hyperinflation. On a lighter side during hyperinflation you do not need to have money but bullets because no matter how much money you have it won’t be enough.

The way commodity and food prices are rising across the world I won’t be surprised if in future many developing and developed countries would be facing this monster called hyperinflation and if proper steps are not taken than it will be one of the biggest crisis for the world, even bigger than 2008 financial crisis.

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