Hyperinflation: A Theory On The Ignorance Concerning Money And Interest

Abstract

In cases of hyperinflation the exchange rate varies at a rate close to the rate of inflation and the savings present in the financial system lose their capacity to be invested. One could say that there is a demand for the stongest foreign currency for transactional and speculative purposes that is equal to the traditional demand for money. At the same time, savings lose their purchasing power due to the speed and fluctuations in the rate of increase of prices.