Hyperinflation

While there is no universally accepted list of conditions that define hyperinflation, it can be generally summarized as a period where inflation is out of control. This is when prices of goods and services increase quickly because the value of the currency is decreasing at a significant rate.

The simplest definition or condition that would define a period of hyperinflation is when there exists an inflation rate of over 50% per month. If you desire a more complicated definition than you can use the International Accounting Standard 29 which describes four conditions in an economy which must exist for hyperinflation. First, the general population prefers to keep its wealth in non-monetary assets or in a relatively stable foreign currency. Amounts of local currency held are immediately invested to maintain purchasing power. Second, the general population regards monetary amounts not in terms of the local currency but in terms of a relatively stable foreign currency. Prices may be quoted in that currency. Third, sales and purchases on credit take place at prices that compensate for the expected loss of purchasing power during the credit period, even if the period is short and finally fourth where interest rates, wages and prices are linked to a price index; and the cumulative inflation rate over three years approaches, or exceeds, 100%.

Some (not all) examples of extreme hyperinflation:

1. Germany 1920's Inflation was at 3.25 million percent per month (price doubles every 49 hours)
2. Russia 1921-1924 Inflation was at 213 percent per month
3. Austria 1921-1922 Inflation was at 134 percent per month
4. Poland 1922-1924 Inflation was at 275 percent per month
5. Occupied Greece 1941-1944 Inflation was at 8.55 billion percent per month (price doubles every 28 hours)
6. Hungary 1945 (at the end of world war II) Inflation was at 41.9 quadrillion percent per month (price doubles every 15 hours)