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Hyperinflations are a monetary event, not an economic event, but usually are precipitated by a severe economic downturn.  Hyperinflations require the central powers to print money to pay for expenses (rather than tax from the citizenry).  Printing money expands the money supply as opposed to taxation which redistributes existing currency.  Hyperinflations, unfortunately, are historically more common than one might think and even go back to the Roman times as emperors reduced the silver content of coins to pay soldiers' salaries. 

Conditions for a hyperinflation typically are:

Modern money printing can be accomplished though a number of methods by a countries central bank including: keeping interest rates below the natural market interest rate; direct purchase of corporate assets (quantitative easing); and monetization of the debt where the central bank purchase the government's own treasury bills.  Monetization of the debt can also be performed indirectly if the central bank lends money to banks who then purchase government bonds.  The Federal Reserve is the central bank for the United States.

Examples of Hyperinflation are :

Germany 1923

Zimbabwe 2000's


Zimbabwe dollar - it includes an expiration date.

Can We Have a Hyperinflation in the United States?

We've already had one!  The first currency of the United States was called The Continental and it very quickly lost most of it's value through overprinting.

Many of the conditions exists for a hyperinflation this time around (>= $2 trillion deficits, extensive debts, rumors that the federal reserve purchased up to 80% of the treasuries bills in 2009), but it's not a preordained outcome.  Although short term, there are very powerful deflationary forces in the system, if the government refuses to write down any debt and continues to run large deficits, there's a pretty good chance we'll have a high inflation sometime in the near future for the United States.

Here is a good video overview of the US fiscal situation:! (National Inflation Association)

Preparations for a Hyperinflation

Additional sources

  1. "Fiat Paper Money - The History And Evolution of Our Currency" - ttp://
  2. "When Money Dies", Adam Ferguson
  3. "The Nightmare German Inflation" -