Hyperinflation.

In plain English

One widely used accounting threshold treats inflation above 50 percent per month as hyperinflation, a pace that compounds to enormous annual figures. It is almost always the result of a government financing large deficits by creating money, often alongside war, a collapse in tax collection, or a loss of access to credit. Once people expect it, velocity spikes because holding cash becomes a guaranteed loss, which accelerates the process. Ending it usually requires a credible break: a new currency, an independent central bank, or fiscal changes that remove the need to print. Savings held in the local currency are typically destroyed.

01Why it matters

Hyperinflation wipes out cash savings and fixed pensions within months, and it is the clearest example of why the credibility of a currency issuer matters to ordinary households.

02The math, step by step

At 50 percent monthly inflation, something costing 100 units costs 150 after one month, 225 after two, and about 1,139 after six months, which is 100 times 1.5 to the sixth power. A full year of that turns 100 into roughly 13,000.

Illustrative example. The amounts here are hypothetical, chosen to show how the math works, not real quoted rates or figures.

03What this is NOT

04Receipts

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